Founder and CEO of Axcel Finance Ltd
The country, and the wider Caribbean region, has been through difficult economic times, but some experts suggest that the recession is over and we are emerging on the other side. Does your own bank account balance reflect the same confidence?
You can open any newspaper, turn on the radio or drift across the Internet and you will consistently hear about the global recession and how it has affected the entire Caribbean. The global recession which thumped the US and Europe, initially started in 2008-2009, but because the Caribbean is generally more conservative in its lending practices and operates in a small marketplace, it was a further two years before our islands seriously felt the impact of these difficult financial times.
Although the US and some other parts of the world have been recovering reasonably well, smaller developing countries are taking longer to make progress because of their small market size and limited power to dictate terms on the world stage. Nevertheless, there are things that we can all do to make our financial standing so much better. By continually blaming the world recession, we are not doing ourselves any favours in finding a way through to financial recovery.
The IMF has recently been visiting a number of Latin American and Caribbean countries. Based on its findings, the IMF is suggesting that there will be a 3% growth during 2014, in the gross domestic product (GDP), which is seen as the overall financial measure of an economy and the leading economic indicator.With the exception of Barbados, all islands are projecting positive growth rates, albeit lower than the IMF projection.
Politicians will continue to make reference to the recession since they have to cope with reality and the problems that exist now, while thinking about how to move the countries forward. Along with businesses and the citizens of each country, we have to understand how we can stimulate the economy and create growth now.
By understanding the mistakes of the past, we can learn lessons that will show us ways to recover from the global recession at a greater pace. Some industries will need to diversify. Sectors such as tourism are likely to be affected for a few years, particularly where countries insist on increasing taxation on travel each year. Such practices will make several countries less attractive, which means that many tourists would view the cost of visiting the Caribbean as expensive. Unfortunately, with so many Caribbean countries heavily reliant on tourism, the economies will grow slower than expected, which is why new ideas are required to make sure that the entire economy doesn’t suffer.
Many governments have already begun to look at measures and devices like the current industries and retrain its citizens to be able to shift from traditional work methods to what is appropriate in the future. Many Caribbean islands are realising that sugar plantations may only break even at best, and are not the future on which to base their economies. Similarly, how can it be wise for bananas to be sent abroad from many Caribbean nations, while their food stores import cheaper from the US and elsewhere? Hence there must be scope to rationalise such practices in order to reduce the net negative foreign exchange impact.
People have been greatly affected by the increased costs for gas in their vehicles and electricity supplies from the utility company. Fortunately, many experts across the Caribbean have begun to move to a range of fuel options for vehicles and looking towards more green energy options such as solar power to reduce the cost of electricity. The skills and attributes of great minds are all here and available in the Caribbean. It is just a case of applying them to the right occupation at the best time.
Innovation is always required by businesses to move onwards and upwards to develop new products and services which are more efficient than those currently in place. In so doing items will be more affordable for citizens and businesses as production costs are reduced.
Perhaps the biggest lesson that has been learnt by employers and employees is a need to understand that business methods, after the recession, will never be the same. Companies are expecting a higher quality of work and a higher productivity in order to compete. Enterprises will constantly analyse the way businesses achieved results in the past compared to what the digital future has to offer.
Where businesses and governments are able to have their people join forces to progress, an improved workforce will be available and better equipped for the future. Such forward looking countries will focus on modern techniques rather than continually blaming the recession and the past and the way that things were always done. The more progressive countries across the Caribbean are looking at ways of becoming more environmentally friendly with their power supplies and reducing the need for importing fossil fuels. They are encouraging their citizens to grow more food and import less, so ultimately bills will be vastly reduced and will set the stage for improved standard of living in the relatively near future.
The Caribbean countries have an enormous amount of potential and are full of people who have great creativity with aspirations and dreams for a better tomorrow. It is time to put the petty political squabbling and unproductive ways into the past so that the targets and achievements of today’s Caribbean people will be felt by our children, and then their children.
By thinking positively, we can all, collectively, make this the start of the new economies after the recession. There will be some challenges ahead and occasionally mistakes will be made, but these must not be allowed to affect the long-term positivity if we all build towards a better tomorrow.