Caribbean states are being encouraged to pay keen attention to several elements as they strive to strengthen their economic systems and help residents attain greater economic independence.
The issue came up for discussion on Thursday night during the Central Bank of Barbados 2021 Caribbean Economic Forum series, under the topic: Resilient Institutions and Why They Matter To Me.
In addition to sound fiscal policies, transparency and accountability, officials warned of the need for governments to pay special attention to striking a “balance” between revenue collection, expenditure and debt.
Moisés Schwartz, Manager of Institutions for Development Sector at the Inter-American Development Bank (IDB), is also of the view that careful attention should be paid to some groups including women and youth, as they seek to develop businesses.
“For example, you are an entrepreneur who wants to build a business and you go to the traditional banking system and it is very difficult because you are young and you are a woman as opposed to being a man, which is being a little bit easier in that regard. So the system is skewed in that regard,” he said.
However, Schwartz quickly pointed out that the banking system was rapidly and drastically changing, highlighting that digital systems were making things less complicated.
“So those are good and we are already seeing in Latin America the development of fintech and credit arrangements for younger people that does not necessarily fit the traditional model and for women who for sure do not fit the traditional model and are now getting access to credit.
“I simply mentioned the financial system, but this applies to every other aspect of economic society and I guess that institutions need to be more sensitive and aware of the necessities of these groupings,” he explained.
The IDB official said there was also a need to ensure certainty and predictability in economic policies, adding that citizens and entrepreneurs “don’t want to be surprised by economic shocks.”
“So develop prospects for employment, develop prospects to invest and engage in economic activity and all of these provide opportunities for employment,” he said.
In relation to achieving a delicate balance between debt, revenue and expenditure, Schwartz said: “on the revenue side you need systems without leakages, you need efficient ways to execute government spending and at the same time to maintain adequate levels of debt”.
“So having the three together in kind of a strategy that makes sense would put the economy on a better path.”
During the discussion officials agreed that despite best of efforts, the region was vulnerable to both internal and external shocks, which should also be taken into account when building economic systems.
Diether Beuermann, lead economist for the Caribbean Country Department at the IDB, said his vision for the region was for more policy decisions, that are taken in a bid to improve lives and livelihoods, be based on evidence especially in the areas of health, education and governance.
Meanwhile, former governor of the Bank of Jamaica Brian Wynter highlighted the need for sound fiscal policies that include transparency and accountability.
Wynter said his wish was for “greater engagement by ordinary people in the government and public policy of the region,” adding that governments had the responsibility to make this possible.
Also zeroing in on the financial system, he said while the region could boast of having well-developed and established financial systems, there was still the need to improve access to finance in order to help promote entrepreneurial activity.
“So I think the regulatory system needs to do a lot and governments have a lot to do to improve dramatically access to finance, and I think access to finance has to not only be there for everybody but take account of the issues raised to address the disadvantaged groups – women and young people – who actually have greater difficulty than others,” he said.
“To achieve that change requires a close look at the competitive environment in your financial sector,” he added.(MM)
.
