The need for the Caribbean Community (CARICOM) to move faster towards improving competitiveness and diversification of their production and exports, is one of a series of measures identified by CARICOM Secretary-General, Edwin Carrington to lessen the impact of the Asian and global financial crisis.
Speaking to participants at a meeting of the Caribbean Association of Indigenous Banks in Georgetown today (Wednesday 11 November), Mr Carrington said a plan is already in motion as the Bureau of the Conference of Heads of Government at its recent meeting in Grenada (October 21) called on the Council for Finance and Planning to meet, discuss and propose policy measures on the issues. These measures will be up for consideration by CARICOM Heads of Government at their upcoming Tenth Inter-Sessional Meeting in Suriname in March, 1999.
Mr. Carrington stressed the importance of a regional approach in responding to the crisis, and highlighted that CARICOM will ” need to accelerate the process of improving the competitiveness and diversification of their production and exports, strengthening their domestic financial systems, and increasing their reliance on domestic savings and the regional financial market as sources of investment capital for regional investment and development.”
The Secretary-General noted that there are numerous lessons to be learnt from the current financial crisis in the world including that of “over-reliance on the market, and market participants for determining the direction of economic policy.” He outlined other lessons relating to “the importance of taking steps to generate greater domestic savings to help finance domestic investment”, the strengthening of domestic financial systems to identify, and solve sector problems, and “the need for the international financial institutions to have the capacity to activate timely, large, and credible injections of official liquidity into the early stages of a crisis so as to head it off.”
The current global financial crisis which has so far directly affected South East Asia, Russia, and Latin America, has impacted negatively on world economic growth and on international financial markets. While the crisis is said to be largely a negative outcome of globilisation, it was noted by the Secretary-General that globalisation brings significant benefits, and major risks.
Mr. Carrington pointed out that some of the implications for CARICOM countries include falling demand for export commodities, increased price competition from Asian countries for manufactured goods, and a slowing down in the tourism sector due to reduced arrivals. Additionally, he said, developing countries seeking loans at this time from international agencies, will most likely face increased cost.
