GROWTH, COMPETITIVENESS & JOBS: IMPLICATIONS FOR THE CARIBBEAN

Caribbean Growth Forum 2015

Dr. Didacus JulesOECS

St. Lucia16th June 2015

The Caribbean region’s interventions of the past decades aimed at spurring growth have not led to the expected outcomes.

Supply-side responses, focused on improving the overall investment climate and on removing obstacles to growth, have not generated the expected growth rates and employment levels.

World Bank 2015

WHAT THEN?....

3 questions:

1. What have we been doing to achieve these things?2. What is required to achieve these things?3. What do we need to do differently if we are to achieve them?

1. What have we been doing to achieve these things?

1. What have we been doing to achieve these things?

Heavy reliance on foreign direct investment Pursuit on insular national agendas (trying to

create solutions in our own silos) Wage restraints, fiscal cuts Stimulus packages in areas such as

construction (but undermined by structural leakages in economy)

2. What is required to achieve these things?

2. What is required to achieve these things?

Long term vision without neglecting short term gains necessary build public confidence in its "do-ability"

Acceptance that there are no quick fixes or magic bullets - only a consistent slog along arduous roads sticking to the plan. The importance of process to progress. E.g ease of doing business: a diagnostic tool that we have treated as a terminal sentence.

A POLITICAL EQUATION

2. What is required to achieve these things?

Growth = exports? Or is it:

Organic expansion involving better articulation/integration of economic sectors?

Is regaining market share of our own internal markets part of the new growth paradigm?

Addressing underlying competitiveness issues that affect business?

GROWTH: not just MORE but BETTER

Haque “Betterness: Econ. For Humans”

2. What is required to achieve these things?

STRUCTURAL REFORM of economy an imperative:

Public sector efficiency Private sector capability – productive orientation The delicate balance between public interest

regulation/protection and market liberalization (decisive interventions to protect the poor & vulnerable)

New C21 opportunity not possible without modernization of sectors and processes

2. What is required to achieve these things?

Special attention must be paid to labor – low skilled labor costs too high for type of manufacturing/production on one hand; on the other region losing higher skilled workers esp tech workers. What are schools producing?

An alignment of the regional and the national – address the diseconomies of scale especially in the productive sectors

3. What do we need to do differently if we are to achieve them?

Changing the mindset – move away from social scientific compartmentalism

Need for an ecological perspective on development

The return of

POLITICAL

ECONOMY

a different public

discourse on development

issues

if the problems are inter-related then

the solutions must be integrated

Connect jobs to

opportunity and mobility

3. What do we need to do differently if we are to achieve them?

Social compact on the way forward – national consensus

GROWTH

COMPETITIVENESS

JOBS

Constant search for “models” for imitation Quantitative rather than qualitative increases Low skill, median pay employment Alignment of education with a low value job

market and not with high value possibilities Wage models not business models Not reshaping our institutional capacity –

you cannot build a new house on an old architecture and with outmoded processes

Attempts to develop industry constrained by economies of scale and size

3. What do we need to do differently if we are to achieve them?

Regenerativ

e

Capacity

GROWTH

COMPETITIVENESS

JOBS

sustainability

EQUITY

decent work

sustainability

what differentiates us?

Address in

equality and so

cial ju

stice

without d

amaging economic

prosperity

doing it better, cheaper, faster

Entrepreneurship = self determination

steady and consistent

Individual mobility & opportunity

Framework for Facilitating OECS Growth and Development

AgricultureHealthTourismEducationEmploymentCultureWell-being

ECONOMY-SOCIETY AS ECO-SYSTEM APPROACH

ENHANCED SECTORAL

LINKAGES

© macaulay.cuny.edu

3. What do we need to do differently if we are to achieve them?

AGRICULTURE + TOURISM + EDUCATION + ENVIRONMENTAL SUSTAINABILITY LINKAGES

US$480M FOOD IMPORT BILL

3. What do we need to do differently if we are to achieve them?

Opportunities are EVERYWHERE!

RETHINK

PPPFrom subvention mindset to self-reliance effort: the example of the OECS Coalition of Service IndustriesGovt subvention of EC$100K vs provision of outsourced services to Govt – EC$2M?

A single economic space

COUNTRYPOPULATION

2011/2012

GDP (Constant

2012 - Million US$)

PER CAPITA INCOME

(constant 2012 - US$)

World Bank Group - Ease

of Doing Business

Rank Anguilla 13,037 242.70 18,616.25 -Antigua & Barbuda 84,816 1,007.06 11,306.57 89

British Virgin Islands 28,280 593.85 32,155.00 -Dominica 71,293 450.16 6,279.80 97Grenada 106,667 683.40 6,478.72 126Montserrat 4,922 58.80 11,946.36 -St. Kitts & Nevis 46,204 599.49 11,187.92 121St. Lucia 166,526 1,085.80 6,003.19 100St. Vincent & the Grenadines 109,188 606.29 5,543.34 103OECS TOTALS 630,933 5,327.55 8,443.92 -Martinique 436,131 6,117.00 14,400.00 -Guadeloupe 452,776 3,513.00 7,900.00 -OECS Including French Territories

1,519,840 14,957.55 9,841.53  

         Jamaica   N/A N/A 58Trinidad & Tobago 1,337,439 18,969.16 14,183.20 79Barbados 283,221 4,064.09 14,349.55 106ALL CARICOM 17,326,261 51,237.40 2,957.21 -

3. What do we need to do differently if we are to achieve them?

create strategic value (sustainable and productive employment, intellectual capital development and

employee capability development) to ignite output growth

SAINT LUCIA STEP:

Home Caregivers

Jobs & elderly care

OECS Caribbean Seasonal Agric Workers

Program

2011-13: 1,800 workers; EC$60M

Francis 2015

3. What do we need to do differently if we are to achieve them?

Human resource (PEOPLE) development as central to any sustainable future

People the most abundant “resource” Growth for what? – for social progress, cohesion,

opportunity An education revolution – talent, creativity, STEAM+

(science, technology, engineering, arts and mathematics plus

Caribbean History/Identity, soft skills)

3. What do we need to do differently if we are to achieve them?

A targeted approach to national developmentUsing big data & GIS to identify geographic and sectoral interventions where they matter most

3. What do we need to do differently if we are to achieve them?

Investing in ourselves: leveraging the diaspora and internal national resources

Diaspora economic investmentDiaspora significant intellectual capitalSelf reliant capital formationRevitalizing the OECS Stock Exchange

3. What do we need to do differently if we are to achieve them?

Shaping a new more entrepreneurial and productive private sector Incentives needed to stimulateIncubate a new generation of entrepreneurs: youth – less risk averse and more adventurous.. New niche opportunities

Mechanisms for partnerships:Revitalizing the OECS stock exchangeJoint ventures driven by diplomatic business outreachAngel investment-crowd sourcing

3. What do we need to do differently if we are to achieve them?

Using the OGDS as a unifying framework for synergizing national development efforts in the context of the single economic space

Thank you