Therese Turner-Jones, a deputy division chief with the IMF, which has rescued several Caribbean countries in recent years, said the region is in a “very difficult spot.’’
“It’s hard to see a lot of bright lights coming to some of these service economies,” said Turner-Jones, an economist with responsibilities for several Caribbean countries.
“Countries really need to do more on the fiscal side. In a sense, this region has been postponing, maybe, taking some difficult decisions.”
The region’s top commodities producers and exporters represent the few bright spots: Suriname, Guyana, Trinidad and Tobago and even Belize. Suriname and Guyana are benefitting from high prices for gold and minerals. Trinidad and Tobago, which has oil and natural gas, also is projected to post positive growth though Turner-Jones said the twin-island nation’s economy isn’t growing as well as one would expect given its wealth of natural resources.
“Even a country like Belize is doing fairly well on all sides. In commodities, they have some exports there and on the tourism side, they are doing fine,” Turner-Jones said. “It has some other issues in the financial sector but in terms of growth those four countries: Suriname, Belize, Trinidad and Guyana are doing much better than the others.”
Other countries that are projected to see robust economic activities are the Dominican Republic and Haiti, which share the island of Hispaniola.
Global economic institutions all have Haiti at the top of their growth ladder for the Caribbean region with ECLAC forecasting 6 percent and the World Bank, between 4 and 6 percent. But how growth finally shakes out, economists say, depends on the Haitian government making good on more than $600 million in public sector construction investments, no new disasters and a decent harvest. Two storms and a drought in 2012, and the government’s failure to execute investment projects severely hampered growth last year.
“We do see more positive results compared to last year,” said Elizabeth Ruppert Bulmer, acting lead economist at the World Bank for Haiti. “But there is worry in terms of whether there will be enough recovery to meet the annual projections.”
Meanwhile, improving performance by the private sector in the Dominican Republic is expected to boost growth, but the numbers could be lowered by long overdue efforts to control government spending, the World Bank said.
While the private sector may be doing well in the Dominican Republic, it is struggling elsewhere in the Caribbean, said George Tsibouris, an IMF division chief who oversees the Eastern Caribbean. Banks, he said, are seeing lower profitability mainly because private businesses are not doing so well.
“They have struggled somewhat in marketing themselves or positioning themselves relative to these economic challenges coming from external sources,” he said. “So there is an issue there in terms of how the private sector can best respond to this and sort of recover as quickly as possible.”
David E. Lewis, a Washington-D.C. consultant and longtime adviser to Caribbean governments, said regional leaders have for too long resisted making the tough decisions needed to make their nations competitive and attractive.
“You have had no new cash cow to come in to revolutionize your economy,” Lewis said. “The whole world went into something called the entertainment sector; only we in the Caribbean call it tourism still.
“We haven’t figured out in the region how do you adjust to small-market size reality,” he added.