KINGSTON, Jamaica – Caribbean economies have fallen behind and are less competitive than other small developing economies around the world.
That observation was made by Inter-American Development Bank (IDB) Regional Manager Gerard Johnson yesterday at the opening ceremony of the Second Caribbean Competitiveness Forum at the Jamaica Pegasus Hotel.
“We used to be out in front in terms of productivity, living standards and growth and that is no longer the case. The fact is that our productivity has gone stagnant, exports flat, public debt has gone up trying to make up for that and our living standards have fallen,” Johnson said. He supported his assessment with the competitiveness index of the World Economic Forum and the World Bank Doing Business report, which suggests that countries in the region are falling behind in terms of its competitiveness policy and regulatory reform.
Johnson said that while fiscal compression is important, that alone will not tackle the problem of high debt and low growth that is plaguing the region. However, he said, “joint action can make some things possible”.
According to Johnson “We have untapped liquidity in the region. In some countries, there are huge amounts of liquidity in commercial banks; in other countries, we have real sectors that have good projects but can’t get financing.”
The two-day forum is being hosted by the Caribbean Centre for Competitiveness of The University of the West Indies in collaboration with the Caribbean Export Development Agency and the Private Sector Organization of Jamaica (PSOJ). The theme of the event is “A New Innings : Competitiveness through Global Value Chains, Clustering and Innovation.”
PSOJ CEO Dennis Chung said under the current economic program with the International Monetary Fund (IMF), Jamaica is for the first time on the right path towards economic rehabilitation.
“What we are doing this time is addressing the structural impediments that have caused a problem with competitiveness and productivity in Jamaica,” Chung said.
He noted that the country has been tackling both fiscal issues and structural impediments by legislation.
Recent developments such as the implementation of the Security Interests in Personal Property Registry and the business super form has highlighted efforts to improve the nation’s business climate. What’s more is that the country is on the verge of changing outdated insolvency laws.
“Within the private sector, it has been welcomed; we are seeing confidence returning and more investments are now taking place as a result. I am pretty confident that if we can continue on this path and continue to address things like crime, that we will see some return of vibrancy to the economy,” Chung said, adding that there is a need also for comprehensive tax reform and competitively priced energy.
Industry Minister Anthony Hylton noted that competitiveness is one of the fundamental pillars of the nation’s economic reform efforts. He said that the push toward a logistics-centered economy will be a key part of these efforts, making reference to the proposed multi-billion dollar logistics hub that he said will allow Jamaica to be “deeply entrenched in the global value chain.”