Caribbean economist calls for pro-growth strategies

NASSAU, Bahamas, Friday March 1, 2013 - A leading Caribbean economist says the newly elected administrations in Grenada and Barbados can steer their respective countries onto a path of economic sustainability, but it will require “genuine spiritual leadership devoid of ego in order to make difficult decisions with awareness, intelligence, wisdom and compassion.”

Zhivargo Laing, a former Bahamian cabinet minister, lauded the experience of Prime Ministers Dr. Keith Mitchell and Freundel Stuart of Grenada and Barbados respectively and noted they preside over their nations at a “challenging time in the economic and social history of the world, when there is a great need to pursue economic growth strategies that generate jobs and improve income prospects for their people.”

Laing noted that the Caribbean leaders “still face challenges as economic headwinds continue to buffet the global economy, notwithstanding its slow rebound from the recent financial and economic crisis.”

“However, there are possibilities from pursuing pro-growth policies,” suggested Laing who served as Minister of State in the Ministry of Finance in the past Hubert Ingraham administration.

He noted the need to “encourage domestic investment through international capital access and promote inward foreign direct investment.” He also urged a similar push domestically to support the needs of small and medium size enterprises, “more so in non-financial ways (such as management, technology, market access and cost savings) and improving efficiencies in the public sector.”

Drawing on his own ministerial experiences, Laing recalled “one of the great lessons of the last crisis is that years of prudent fiscal management can produce financial headroom (low debt-servicing) which is an enormous asset to have in a crisis.”

This “headroom” was valuable, Laing asserted, because it provided “the ability to engage in the kind of fiscal activity that supports an economy, protects the financial system and provides relief to those socially displaced during a crisis.”

The former Bahamian finance minister said new administrations are quickly thrust into a balancing act, “facing the difficult task of balancing the realities of government finances with significantly limited room for maneuvering with the demands of greater investments in public education, public health, infrastructure, crime reduction and public sector reform.”

Governments can no longer implement their mandates all by themselves and with their allocated resources, he asserted: “They will have to be creative in exploring the benefits of prudent public private partnerships – as well as achieving efficiency gains in government administration.” 

Laing, an author, management consultant and leadership trainer, said the Eastern Caribbean leaders also come to office when new global standards threaten some of the traditional economic sectors of Caribbean economies.

One such change, the new and evolving standards in international financial services, threatens the lucrative offshore financial sectors.

Urging careful attention to international trade negotiations, Laing pointed to policies which have made historic market access to certain products less effective and imposed new reciprocal demands that prove challenging to small and vulnerable industries.

He was confident the new administrations will “approach dealing with these issues with a clear sense of purpose but appreciating the competing interest of the global powers.”

In all of this, Laing believes, new and current administrations will have to recognize the enormous stress being suffered by so many families in their countries and which have taken many of them to “the brink of near hopelessness.”

Highlighting the human element of government priorities, he said “for many of these families, economic and social relief will not be forthcoming in any short period of time, so their frustrations may yet linger. It will be incumbent on leaders therefore to communicate with their populations genuinely and forthrightly.”

In such difficult economic times the former cabinet minister said “the demands of the present moment require honest public policy dialogue with citizens, making clear what is necessary, doable and prudent. Politics as usual will be a mistake.”

“Even in the best of times with all hands on deck, we are challenged to steer the ship of state to safe harbor; in the worst of times it is impossible to do so if all hands are not on deck. Prime Minister Mitchell of Grenada’s pledge to promote unity amongst his people is both timely and timeless. It is a necessary pledge throughout the region. Execution now is necessary,” he concluded. Click here to receive free news bulletins via email from Caribbean360. (View sample)