Saint Lucia and other countries in the Caribbean are projected to record modest economic growth between 1-2 percent for 2013, despite the lingering effects of the global financial crisis.
President of the Caribbean Development Bank (CDB) Dr. Warren Smith presented a cautiously optimistic outlook for the region on Friday, February 8, 2013 at the bank`s headquarters in Bridgetown Barbados, advising regional governments to build economic resilience by intensifying economic diversification efforts.
Dr. Smith says while growth in the region will continue to be influenced by the rebound of the global economy, improving productive sector competitiveness and debt sustainability will also shape the near-term outlook of the region.
He said: “The Caribbean economies need to adjust, they need to adjust their fiscal and debt but they also need to get economic growth because the debt to GDP ratio that is frequently used as an indicator of level of indebtedness is simply a ratio. It’s debt as the numerator and GDP as the denominator, any capacity to grow the denominator will bring that ratio down and will have very positive impact on the prospects of those countries and I think the studies clearly demonstrate there is a very strong nexus between reduction in poverty and economic growth, not that economic growth by itself is sufficient but it is a necessary condition.”
In describing the Caribbean as a zone of heavily indebted countries, the head of the Caribbean Development Bank says if solutions are not developed, debt will continue to drag on economic growth.
“The concentration of many of our Caribbean countries in the advanced economies of North America and Europe represent continuing risks for us, As the old saying goes, you can’t put all your eggs in one basket and that they quantum our countries find themselves in and if they do not find the mechanisms to be able to spread that risk and begin to trade more with the countries and economies that are growing and we talking here about the old mantra of south south corporation but there is work to be done domestically also”.
The CDB president says there is urgent need for Caribbean Governments to improve efficiency and ensure every dollar spent on investment yields positive returns. He says the bank is committed to supporting its Borrowing Member Countries ensure economic prosperity.