The Caribbean region, including The Bahamas, is slowly recovering from the global economic crisis with incremental annual growth projections, according to the International Monetary Fund (IMF).
During a presentation on Tuesday that provided an economic assessment of the Western Hemisphere, IMF Monetary and Capital Markets Department economist Miguel Segoviano said the Caribbean is recovering from the global economic crisis at a lower rate in comparison to other regions.
“We expect that the Caribbean as a whole will grow by slightly below two percent in this year and perhaps two and a half percent in 2012, which is certainly not bad because its higher than last year and the recovery is still going on although it is slow,” Segoviano said.
“To compare, South America in 2010 [grew] at a rate of six and a half percent growth for the region. For 2011 it will grow by five and a half percent and in the next year by four and a half percent. Essentially… the effects of the global crisis in South America were very short-lived.”
IMF representative Dr Gene Leon, who was also a panelist on Tuesday, said that the decline in growth in this region has led to many Caribbean countries having to increase borrowing, but there is need to reduce debt and increase growth levels.
He added that the Caribbean region is challenged with a number of vulnerabilities within its financial sectors.
“We have broken them down into macroeconomic fundamentals and we have seen low growth, we’ve seen very weak fiscal positions and likewise, poor savings balances,” he said. “Poor savings in that sense we can think of as your current account.”
Chairman of the Bahamas Chamber of Commerce Winston Rolle said that, although growth in The Bahamas has been moderate, there have been some positives and in moving forward the right policies will lead to further growth and a stabilization of the current debt.
“This recovery process is going to be a very slow one, and a lot of the policy decisions that need to be made, we feel have to be made by putting policies in place that are going to drive growth, not only in the public sector, but also in the private sector,” he said.
“By driving that growth in the private sector, this has the ripple effect in that in lessens the government’s burden as it relates to employment. It also generates more businesses that will be paying taxes and contributing to the revenue stream, as well as reducing the government’s dead burden.”
However, some financial experts say that the current socioeconomic policies are not enough to sustain the economy of The Bahamas in the long-term.
Dr Olivia Saunders, who lectures at The College of The Bahamas, shares such a view. She contended on Tuesday that the ongoing crime and violence could very well offset the recovery potential of the Caribbean.
“We are continuing… a paradigm that is really not helpful for our future,” she said. “If we continue with the way we are going, our attractiveness for investment is going to be lowered perhaps to an extent where we are not going to have a recovery.”
Source-Nassau Guardian Staff
