The Bank's Director of Economics, Dr. Justin Ram said regional governments must aim to become Dynamic, Export-oriented, Competitive, Inclusive, Diverse and Environmentally-resilient economies to move region forward.

1. Time to D.E.C.I.D.E.
February 24, 2016
Dr. Justin Ram
Director of Economics
Caribbean Economic Review and Outlook

2. Presentation Outline
• Part A: Global Economic Outlook
• Part B: Caribbean Economic Review and Outlook
• Part C: Vision and policy response

3. Global Economic Outlook
Part: A

4. Global growth > in 2016
Source: IMF WEO January 2016 Update

5. Uncertainty a toxic cocktail
Looking Down
• Geopolitical uncertainty
• Stock market turmoil
• Slowdown in emerging markets,
especially China
• Currency volatility
• Low oil prices costing producers
and financers
• Possible instability in Europe,
Brexit
• Increased risk of US recession?
• Zika virus
• El Nino
Looking up
• US unemployment rate the
lowest since 2009
• Increase in US wages
• Low oil prices benefitting
consumers
IMF recently revised down global
growth for 2015 and 2016

6. Source: IMF WH REO October 2015
Mixed fortunes closer to home

7. Caribbean Economic Review and
Outlook
Part: B

8. Continued growth < comparators
Sources: IMF, ECCB and CDB. Data for 2015 are preliminary CDB estimates

9. BMC growth in 2015
Sources: BMCs, CDB preliminary estimates

10. Tourism: Most regional destinations saw
continued recovery in stayover arrivals
Source: Caribbean Tourism Organisation *2015 figures as at month indicated
Growth (%) in Stay-Over Arrivals 2010-2015*

11. Commodity prices are falling: mixed
fortunes and risks for BMCs
Source: IMF, World Gold Council

12. The fiscal story
Sources: IMF, CDB estimates

13. Trade: foreign exchange reserves

14. Unemployment is still high
Source: BMC Statistical Offices

15. Low productivity does not bode
well for growth
Source: The Conference Board. 2015. The ConferenceBoard Total Economy Database™, May 2015, http://www.conference-board.org/data/economydatabase/

16. Still tough going for businesses
Source: World Bank Group

17. Here’s why we score poorly in
Doing Business rankings
Source: World Bank Group

18. Logistics: BMCs lagging behind
Source: World Bank Group

19. What’s the 2016 Outlook? CDB
forecasts regional growth of 0.3%
Source: CDB

20. Where are the risks in 2016?
• Global economic downturn
• Political uncertainty in Venezuela
• Continued warming of US/Cuba relations
• Potential threat of Zika virus
• Commodity exporters need to make difficult decisions
• US Presidential election
• Olympics in Rio de Janeiro
• Reduction in correspondent Banking relationships
• Weather-related events

21. Our Vision for the Caribbean:
Time to D.E.C.I.D.E. and Policy
Recommendations
Part: C

22. Our Vision
for our Caribbean economies
What do we want our Caribbean economies to be?
Dynamic, Export-oriented, Competitive, Inclusive, Diverse
and Environmentally-resilient economies (D.E.C.I.D.E.)
This requires:
 Private sector led growth
 Educated and flexible labour force
 Regionally integrated
 Government as facilitator and efficient regulator
 Energy security

23. Policy Actions: DECIDE
1. We need a strategy that will allow us to take advantage of
technological innovation, to identify and encourage higher
productive activity.
2. At the same time we need to improve the Investment Climate:
make it easier for private sector to thrive (doing business reforms).
3. Labor Market Reforms: increase flexibility, freedom of movement,
participation and productivity.
4. Human Capital Development: Investment in quality education for
all, with emphasis on science, technology, engineering and
mathametics (STEM).

24. Policy Actions: DECIDE
5. Fiscal Consolidation: Fiscal rules, increase efficiency of revenue
collection and expenditure, prioritise capital investment,
reform of subsidies.
6. Although we have low fuel prices we still need energy reform
that will improve our energy security, through use of RE in
energy mix and greater EE (oil and non-oil producers).
7. Policy environment that assists MSMEs such as access to credit.
8. Targeted and affordable social protection, this is applicable
social safety nets, transfers and subsidies.

25. Policy Actions: DECIDE
9. Maximise regional integration and take advantage of free trade
agreements such as EPA and seek new agreements.
10. Improve Regional Transport and Logistics: increase efficiency of
movement of people and goods across the region.
11. Mandate building and infrastructure codes to improve
resilience.
12. Measures required to minimise the spread of new diseases.
13. Improve the level of national savings to support investment and
fiscal buffers.

26. Questions?
Thank you for your attention