OECS at tipping point – Sir Dwight Venner
February 1, 2013
OECS at tipping point – Sir Dwight Venner

After four years of economic decline, the Organisation of Eastern Caribbean States (OECS) is at “a tipping point which will require our sustained and collective efforts to get our economies on the path to growth and development”.{{more}}

Sir K. Dwight Venner made the observation Tuesday as he delivered the 2012 Eastern Caribbean Currency Union (ECCU) Economic Review.

Last year, the sub-region’s GDP is estimated to have declined 0.1 per cent.

This compares to an average of 2.2 per cent annually from 2009 to 2011.

“This out-turn reflected lower output in key sectors such as construction, transport, storage and communications, and sluggish growth in the tourism industry,” Sir Dwight said.

“Value added by the construction sector contracted by 5.6 per cent, following an average decline of 13.3 per cent in the previous three years.”

He also reported that the tourism industry, the key driver of growth, saw a lower rate of increase, compared to 2011.

The governments of the eight-member union registered an overall deficit of $325.3 million, compared to $404.3 million in 2011.

Sir Dwight, in his presentation dubbed “Realism and Hope”, said the reality is that the currency union is constrained by both external and domestic factors, some of which are within its capacity to deal with and some of which are not.

He said because the OECS is geographically close to the United States, OECS citizens’ expectations are high, but the resources within the regional bloc are inadequate to provide a similar standard of living as in the US.

“In addition, because we have competitive multiparty political systems, tremendous pressures are put on those systems to deliver public goods and services which are beyond the current capabilities of our economic systems.”

Sir Dwight also noted the high level of migration to the United States and increasing fiscal deficits among ECCU economies.

“We, therefore, need to honestly, objectively, and realistically assess our current situation and the structure and functions of the political, social and economic systems within which we have to operate. If they are not functioning to deliver what we expect them to, we will need to deliberately make the necessary adjustments to ensure that the practical steps are taken to achieve the successful resolution of our problems. It is only in this way that we can generate the hope for a brighter future among our people.”

In discussing the current realities within the ECCU, Sir Dwight spoke of the external environment and the domestic landscape.

He spoke of “the Great Recession which began in the fall of 2007” and its impact on the United States and Europe.

“The Caribbean, of which the ECCU is an integral part, has lost its competitiveness in many areas, has had its trade preferences for major agricultural export commodities removed or substantially reduced, has seen its share of the global tourism market decline and has not undertaken the fundamental adjustments that other countries have made.

“To put it bluntly, we are being left behind in a very competitive world in which countries, both advanced and developing, are having to make significant adjustments to remain competitive.”

Sir Dwight said that in charting the way forward for the ECCU to better cope with the challenges which it now faces, it is critical that a clear vision for the ECCU be agreed on.

“This vision must emerge from among our citizens and communities and must state how we would like to see our countries in the future. One puts forward the following as fairly reasonable ideas about the societies that we would like to create for ourselves and future generations,” he said as he detailed his vision for the ECCU for the next 15 years.