By Dr Justin Ram, From Nation News Barbados

Where we need to be is on a higher consistent growth trajectory that is inclusive and which unfolds in a safe, crime-free environment for all citizens. This must also be done in a way that is environmentally sustainable, provides buffers to the possible effects of climate change, and which prepares our young people for the demands of the new labour market, including skills that will be complementary to automation and artificial intelligence.
How we get there requires an action plan with an all-hands-on-deck approach.
Our region needs an action plan which better enables it to participate in global supply chains and increase labour demand, and targeted social development assistance.
But policymakers must be prepared to set the right environment to tackle the obstacles to growth, which could increase productivity and enhance competiveness. In this endeavour, it would be necessary to reform governance structures and institutions to support the new paradigm.
Governments would have to be willing to stabilise their economies through fiscal and debt consolidation and to develop strong targeted social development programmes.
We need social development policies, such as quality education and good housing, and institutions that can target where support is needed. Our social development agencies must also have the capacity to continuously evaluate and improve their performance to help achieve the desired outcomes.
Secondly, in order to break the unhappy cycle of high debt and low growth, economic stability is a precondition. Fiscal discipline is crucial to restoring and supporting economic stability and this would require some consideration for fiscal reforms in both expenditure and revenue. In addition to the implementation of reform policies, borrowing member countries would also need to implement targeted technical assistance programmes for micro, small and medium size enterprises in sectors that have potential to contribute significantly to economic development and employment.
The academic literature is replete with evidence that a high debt burden compromises a country’s economic stability, its economic growth agenda and government’s ability to support social programmes.
With that in mind, proper institutions and frameworks to manage debt, identify risks and craft mitigating measures is important. And given the vulnerabilities to natural disasters and how this has contributed to debt accumulation, it is important for countries to use revenue windfalls to set up contingency funds or sovereign wealth funds to reduce the debt burden and ensure greater economic and social resilience.
Focus should be on growth-enhancing structural reforms that help businesses to grow; reduce barriers to trade and strengthen the financial sector. Such reforms should also allow for increased use of public private partnerships or PPPs through divestment, to help unlock value from underutilised assets. They should facilitate and promote green energy production; provide incentives for raising capital, for example, on the junior stock exchange markets; and foster access to global supply chains. Efforts should also be made to engage the region’s vast diaspora in the growth agenda.
A significant platform for consistent positive growth outcomes is good governance. It is therefore an imperative for the region to move forward with a good governance agenda. Systems of government should be transparent, foster inclusion, security and growth.
Moreover, government operations and resources should be managed in such a way to ensure good value for money. So the vision and action plan must be one of shared prosperity – prosperity that is sustainable with renewed institutions and greater reliance on the private sector for economic growth.

Dr Justin Ram is director of economics at the Caribbean Development Bank.
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