No success without pain

Former Prime Minister Owen Arthur speaking fondly of his close friend, the late Tyrone Power.
Former Prime Minister of Barbados, Owen Arthur

But such a dividend can be relatively small and generate only limited tangible financial and economic benefits, when measured against what is required to build more competitive enterprises and sectors.

The new programme in Grenada and elsewhere is the Caribbean makes provision for the introduction of many new “good governance and transparency” provisions.

They cannot be condemned for seeking such.

But it should be remembered that growth, the generation of employment and the reduction and eradication of poverty, come basically from the same two sources: the expansion of existing enterprises and the creation of new ones.

It becomes essential therefore that the new governance arrangements should be focused more on measures that can facilitate the expansion and creation of enterprises by helping to reduce costs, enhance productivity and lead to higher rates of returns rather than simply invoking high sounding goals such as greater accountability and transparency.

It needs also to be borne in mind that the new generation of IMF programmes will require countries in the Caribbean to agree to implement things under an IMF programme
that really should form the subject of their relationship with other institutions.

Matters relating to the integrity and stability of the financial sector ought to be dealt through the membership of the countries in the Financial Stability Forum.

Equally, and importantly, matters relating to trade liberalization essentially fall within the ambit a country’s relationship with the WTO.

In that regard, it will as part of its participation is the works of the WTO, have to put requests for and respond to offers to liberalize its trade regime.

Unilateral liberalization of its trade regime under an IMF programme can compromise the strategy a country proposes to follow in its relationship with the WTO, and must therefore be carefully approached.

In the final analysis, it will have to be recogonized that despite the emphases placed on structural reform and growth inducement measures, at the core of the new IMF programmes is the objective of generating financial stability and solvency.

It is difficult to dispute that given the enormity of the cash flow and debt problems facing the countries of the Caribbean, dealing with matters relating to stability and solvency may, in fact, have to be resolutely addressed as a precondition for creating lasting conditions for sustained and sustainable growth and development.

But this should not blind policymakers to the possibilities and opportunities to generate significant growth and transformation outside the context of the new Flexible Credit Line.

For example, in the absence of fiscal space, a larger proportion of the growth and development effort must come from the deployment of economic drivers and enablers which do not require significant expenditure.

In this regard rapid progress with erecting strong IT platforms, carrying out the reforms to make the ease of doing business in the Caribbean meet international best standards, and putting in place arrangements to embed entrepreneurship and innovation as more important factors in the new economy the region must create, must be important components of the response to the challenges to be met.

When you cannot afford to stand where you are, you simply have to move.

And when the movement requires that you have to jump across a wide chasm, it is very important to remember that you cannot cross a chasm by a series of small leaps.

Owen Arthur
Owen Arthur

That is the brutal reality that faces most of the countries of the region.

The new type IMF programmes will not in and of themselves solve all the problems of the Caribbean.

At best, they will function as catalysts which can trigger access to additional resources, and help to generate new policy responses from others that all together may help to make a situation which started as being unsustainable, come into the realm of being manageable.

Countries facing such a brutal reality must draw therefore upon more than what the IMF provides for.

Indeed, the totality of the adjustment that will be required to solve the problems will be the sum of those undertaken by the government in response to the national challenges, those undertaken by enterprises to improve and reform their balance sheets, and those undertaken by the people to ensure that they can enjoy successful livelihoods.

In the Caribbean, that latter matter is called resilience. It is the special character of a people who have survived and risen above slavery and indentureship, racism and the exploitation of colonalization.

The resilience of the people of the Caribbean rather than the content of programmes with the IMF in the Caribbean is what will likely be the determinant of whether the nations succeed or fail.

I thank you for the opportunity in this country, where resilience in the face of adversity has mattered so much,
for the opportunity to deliver myself of these remarks.

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