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Regional development bank calls for business-friendly policies across the Caribbean

Xinhua, May 19, 2016 Adjust font size:

President of the Caribbean Development Bank (CDB) Warren Smith on Wednesday urged policy-makers in the region to adopt a range of business-friendly policies to boost the private sector in the region.

Speaking at the opening of the 46th annual meeting of the CDB in Jamaica's coastal city of Montego Bay, Smith made the call against the backdrop of the region's sluggish economy due to the financial crisis.

"Our overall growth performance has consistently lagged behind the rest of the world's. Our region has grown by only 1.2 percent per year since 2009 compared with the global average of 3.7 percent," he told the opening ceremony.

He said the vulnerability of the Small Island Developing States (SIDs) in the global recession should not necessarily account for the worse-than-average economic performance, as non-Caribbean SIDs did much better.

"Between 2006 and 2015, the Caribbean growth rate averaged 1.5 percent compared with 3.4 percent of other SIDs. Small size then, does not appear to provide a robust explanation for the Caribbean's relatively low growth performance," he said.

Smith attributes other SIDs' successful transformation to a dynamic private sector driving economic growth.

"This, however, did not mean a withdrawal of the state from economic involvement. Rather, the state assumes the role of an enabler, making the policy environment more attractive for foreign and domestic investment which complements the growth agenda," he said.

While focusing on the importance of macro-economic policies and reforms to create a more business-friendly environment, Smith said some challenges should be tackled to spur sustainable growth, including poverty and inequality.

"Caught in a high-debt, low-growth trap, our economies have been unable to create enough higher value employment opportunities that are a pre-requisite for noticeable improvement in our poverty indices," he said.

"Given the prevailing high level of inequality, the more aggressive growth rates will also need to be accompanied by distributional policies that spread wealth more equitably; and reinforced an enlightened and efficient social policy which targets the most vulnerable in society," he added.

Representatives from 28 of its member economies attended the annual meeting of the CDB, a financial institution which assists the Caribbean nations in financing social and economic programs. Endi