Growth in the Caribbean region has been on a downward trajectory for two decades. The region is showing dangerous signs of sinking under the weight of excessive introspection — the real debate concerns how to enable change. The Caribbean is not globally competitive, but dependent. The cost of living is high, ratcheted up by inefficient ports, monopolistic transport markets, high fees and taxes. The appearance of “openness” in trade and finance hides protectionism. The economic framework in the Caribbean is shaped by the political structure, making it difficult for governments to alter the economic structure — where state employment tends to be high, few political parties will risk the wrath of public sector workers. Real change has not been undertaken because the current situation in the Caribbean suits the people with influence.
Avinash D. Persaud, emeritus professor at Gresham College, London, a senior fellow at London Business School and a visiting fellow at the Centre for Financial Analysis and Policy, Judge Institute, Cambridge University, argues that in contemplating lasting change, the region needs to consider strategies that encourage transformation and are “disruptive” of existing structures — that is, those that create sources of unpredictable innovation and new opportunities. Technology, the organization of government services, finance and competition are the critical mechanism of disruptive change. This Caribbean Paper concludes that although there are numerous reasons to be pessimistic about the future of the Caribbean, there are also many reasons to be optimistic having the benefit of size, which is that small states can make changes that will have impact in a relatively short space of time.