Meeting of Experts on Debt Burden in the Caribbean Region Proposed measures to stimulate economic growth: Regional Perspective OECS Secretariat Port of Spain Trinidad and Tobago 24 February 2014
Framework for Facilitating OECS Growth and Development The OECS Authority at its 58th meeting approved the OECS Growth and Development Strategy as the framework for the implementation of a short term action plan to deal with the immediate growth and development challenges and opportunities that are in keeping with the region s thrust towards sustainable development and enhanced resilience. The Strategy embodies specific policies, strategies and action plans spanning seventeen (17) sectors and thematic areas across all economic, social and environmental spheres, for the short, medium and long term
Macroeconomic Issues Slower Growth MEMBER STATE GROWTH RATE 1970-1999 2000-2010 Antigua & Barbuda 4.5 2.9 Dominica 4.2 2.6 Grenada 5.7 1.8 St. Kitts & Nevis 5.3 2.2 St. Lucia 5.2 1.4 St. Vincent & Grenadines 4.5 2.5 Barbados 1.5 1.1 Guyana 1.3 2.1 Source: Based on UNSD Data
Macroeconomic Issues Rapid declines in export competitiveness, exposed by preference erosion, have resulted in collapsed foreign exchange commodity earnings Deep-rooted productivity, production and competitiveness problems, relative to import costs, have translated into large external current account deficits Worsening of the fiscal accounts associated with high budget and trade deficits, financed by domestic and external borrowing
The Development Strategy Complements the ECCU 8-Point 8 Plan The 8-Point Plan s Macroeconomic Stability component seeks to address the fiscal and debt overhang to widen and further entrench stability gains derived from the currency union, enhance credibility of member governments, and encourage renewed FDI The Financial Sector Stability component addresses vulnerabilities in the financial sector exacerbated by the financial and economic crisis Through regional initiatives, each informed or complemented by distinct national actions, the OECS Growth and Development Strategy will generate the quickest, most beneficial and sustainable growth and transformational results, and optimize the positive impacts of deeper integration
Growth Drivers TOURISM Ease of Access/Travel Facilitation (existing and new source markets) customs and immigration; common tourist visa policy Joint approaches to attracting and supporting airlift Establishment of a common maritime space Development and joint promotion of the regional product, including yachting and land-based Development of Key Community-level Niche Products Growth and consolidation of intersectoral linkages Tourism Training Network technical and soft skills Roll out of Benchmarking and Competitiveness Assessments - Demand and Supply Indicators (arrivals, expenditure, natural and cultural resources, hospitality, human resources, marketing); - Tourism Support Indicators (investment climate, business environment, transport, policy, regulatory framework) Long Term Sustainable Tourism Plan
Growth Drivers AGRICULTURE Enhance Food and Nutrition Security Member State policies and strategies Strengthen Agriculture Health and Food Safety Systems Support agro-tourism services and export-oriented value chains (regional and international) Promote compliance with land use management policies Review, amend and harmonize fisheries policies Build Resilience esp. re Climate Change and strengthen Risk Management, including insurance coverage; pest and disease control; measures to curtail praedial larceny Commercialise to attract more youth into agriculture Implement Integrated Rural Development and Poverty Reduction Strategy
Growth Drivers MANUFACTURING Develop a comprehensive Policy, Strategy, and Action Plan, aligned to a regional export strategy Systematic approach to export readiness, branding, marketing and penetration of high potential target markets Secure support for working capital facilities to assist exportready firms undertake remedial works to meet OSH and HACCP requirements, and other productivity and quality enhancing interventions. Exploit economies of scale/production integration within the single space to achieve performance benchmarks, including cost reductions Address competitiveness issues in context of Revised Treaty of Chaguaramus Article 164 Review e.g. capacity building, financing, policy support measures
Growth Drivers CONSTRUCTION Mainstream use of and adherence to the OECS Building Code Reduce timeframe for issuance of construction permits Facilitate use of ICT tools with goal of moving towards e-tendering Establish web portal to help create/facilitate opportunities for OECS construction companies Engage Standards Bureaux to develop standards and technical regulations for construction products Review arrangements for regional supply of cement to ensure adequate and timely supply Develop effective programmes at OECS technical schools to address shortage of skilled tradesmen Design and implement enhanced construction stimulus packages Facilitate establishment of regional institutional arrangements to support the design and execution of regional public-private partnerships to boost infrastructure development
Growth Drivers CREATIVE INDUSTRIES Position service providers to take advantage of new trading opportunities - Economic Union, CSME, EPA (including forging Strategic Alliances with event organisers in these markets; internet marketing) Provide quality training and marketing assistance for music, film, handicraft, fashion industry Improve measurement of economic contribution and commercial activity involved in each creative subsector to better target public sector support and new markets Target the creative sector in the ongoing harmonisation and rationalisation of investment and tax regimes Bring copyright laws of Member States in line with European Union and US practice to protect the region s trading interests Enhance public awareness and advocacy to enforce laws against IP infringement to prevent rampant piracy
Growth Drivers Domestic Financial Services Further development and integration of the financial services sector, to enhance the free movement of capital, to facilitate the efficient mobilisation and allocation of foreign and domestic capital, and maintain financial stability in the ECCU, to foster economic growth Commercial Banking Sector Indigenous banks amalgamation of indigenous banks into fewer well capitalised entities with strong management and governance structures. Foreign banks enhanced contribution and role in development of the financial system and economies of the ECCU. Strengthen and promote Institutions to support and facilitate investment, growth and development Eastern Caribbean Securities Exchange (ECSE) Eastern Caribbean Enterprise Fund (ECEF) Development Banks Most of these initiatives are led by the ECCB
Growth Drivers Domestic Financial Services Specialised financial services and institutions to support the financing and growth of SMEs Leasing and Factoring Export Credit and Insurance Microfinance Institutions/NDFs Credit Unions consolidation and rationalisation of sector Insurance Companies consolidation and rationalisation Supporting Infrastructure Credit Rating Agency Credit Bureau Payment System Legal Framework Consolidated Supervision and Regulatory Framework Deposit Insurance System Most of these initiatives are led by the ECCB
Growth Drivers Other (Non-Tourism) Services Draft and establish a harmonised OECS Services Policy and Incentives Regime to encourage growth of export-oriented Services Industries; Enact into domestic law harmonised regulatory and legislative frameworks for priority sectors, in particular OECS Model Legislation for Professional, Trade and Business Associations; Pursue Pan-OECS Enterprise Creation in key areas: Specialised Tourism Services; ICT; Creative/Cultural Industries and Professional Services; Establish a coherent regionalized mechanism for data collection that would define and measure direction of trade in services statistics, to better inform trade negotiations; Expand the programmes of the OECS Competitive Business Unit (CBU) to better facilitate service export development;
Pushing The Growth Envelope ICT Trade Policy and Trade Facilitation Business and Investment Climate Transportation
Underpinning Growth Education Education Health Social Development and Protection Citizen Security Sustainable Environmental Management ENERGY Ocean Governance
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