WASHINGTON DC, April 3, 2009 — Accelerated trade integration seems to be the answer to boost growth, reduce poverty and create jobs in the Caribbean, especially considering the economic crisis impacting the region, according to a World Bank report prepared jointly with the OAS and Caribbean governments.
Despite the strong economic growth during the past decade averaging 3.6 percent and remarkable progress on human development, the report states that Caribbean countries are not keeping pace with the economic development of similar countries in other regions.
“Caribbean integration into the global economy has been slow, despite preferential trade conditions with the United States and Europe, while its share of world trade has been declining and compares poorly with Asian integration levels 30 years ago,” said Yvonne Tsikata, World Bank Director for the Caribbean.
Tsikata calls for trade integration.
The economic crisis has further compounded the situation for the region, argues the study titled “Caribbean: Accelerating Trade Integration. Policy Options for Sustained Growth, Job Creation, and Poverty Reduction”.
Growth estimates for the Caribbean have fallen sharply compared to 2007, while there is a contraction of main income sources, among them exports, tourism and remittances.
The report praises the efforts of Caribbean countries to integrate with regional and global processes “which supplement each other and shape the trade environment for the next few years.” Additionally, it stresses renegotiating Caribbean relations with main trade partners, including the European Union and the United States.
The paper, however, points to the fact that global integration is being conducted under macroeconomic and financial unbalances that become apparent in large fiscal and payment balance deficits, which have “reduced the pace of trade reforms in the past and are currently a huge concern as they are compounded by the current economic crisis, the paper suggests that the Caribbean should reposition itself to tap into new market opportunities, especially in the area of services, where the region has consistently shown comparative advantages; 45 percent of its GDP is generated by the services industry.
“A new global and regional environment poses critical challenges to the Caribbean countries, but also huge opportunities to place themselves as a competitive and growing region, which translates into considerable social and economic progress,” said Emmanuel Pinto Moreira, World Bank senior economist and one of the report’s authors.