Economic Challenges of Caribbean
The economic challenges facing the Caribbean
The Caribbean is far from immune from the global economic crisis.
Although many Governments initially thought themselves safe from its effects it has become apparent that every nation will see:
• Falling remittances from nationals overseas; • A significant decline in tourism/visitor arrivals (forecast by some governments to be down by between 30 and 40 per cent for the year); • volatile exchange rates and in particular the a fall in income and reserves as a result of the decline in the value of sterling; • a fall off in overseas investment; • increasing levels of unemployment in key sectors including construction and tourism; • falling tax revenues; • difficulties in raising money on international markets to cover the day to day operations of Government; and • budgetary pressure related to the cost of delivering policies intended to mitigate the worst effects of the recession and/or stimulate future economic growth.
As a consequence, Jamaica, the Bahamas, Trinidad, St Lucia, Belize and other Caribbean governments have introduced special budgetary measures. In the case of Jamaica, Government has also approached international financial institutions for support.
Addressing these pressing problems is made more difficult by:
• The continuing longer term challenges being experienced in almost every single sector of the Caribbean economy ; • slow progress towards the creation if a viable Caribbean Single Market and Economy ; • a decline in international interest in the region by its traditional partners in development; and • an alarming growth across the region in crime, violence and narcotics trafficking
Sectoral challenges
The future of the sugar, rice and banana industries remain uncertain as the preferential prices and access offered by Europe is traded away by the European Commission allowing lower cost Latin and other competitors enter the European market.
Also under threat
The Caribbean is far from immune from the global economic crisis.
Although many Governments initially thought themselves safe from its effects it has become apparent that every nation will see:
• Falling remittances from nationals overseas; • A significant decline in tourism/visitor arrivals (forecast by some governments to be down by between 30 and 40 per cent for the year); • volatile exchange rates and in particular the a fall in income and reserves as a result of the decline in the value of sterling; • a fall off in overseas investment; • increasing levels of unemployment in key sectors including construction and tourism; • falling tax revenues; • difficulties in raising money on international markets to cover the day to day operations of Government; and • budgetary pressure related to the cost of delivering policies intended to mitigate the worst effects of the recession and/or stimulate future economic growth.
As a consequence, Jamaica, the Bahamas, Trinidad, St Lucia, Belize and other Caribbean governments have introduced special budgetary measures. In the case of Jamaica, Government has also approached international financial institutions for support.
Addressing these pressing problems is made more difficult by:
• The continuing longer term challenges being experienced in almost every single sector of the Caribbean economy ; • slow progress towards the creation if a viable Caribbean Single Market and Economy ; • a decline in international interest in the region by its traditional partners in development; and • an alarming growth across the region in crime, violence and narcotics trafficking
Sectoral challenges
The future of the sugar, rice and banana industries remain uncertain as the preferential prices and access offered by Europe is traded away by the European Commission allowing lower cost Latin and other competitors enter the European market.
Also under threat