University Professor Don Marshall is warning that the way out of the current economic and developmental “predicaments” facing Barbados and other Caribbean states is to pursue an industrial policy that is aimed at diversifying their economies.
In addition, the Director of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) is calling on regional leaders to shun the Bretton Woods institutions which often require countries to meet “onerous” targets, and look to economic powerhouse China for their capital needs.
“We are in a situation where the fiscal is struggling with the developmental for centrestage. So the International Monetary Fund insists on a restoration of fiscal targets beginning in 2022 and attainment of these targets in the next two to three years. The budgetary conduct of Government is on trial,” declared Marshall.
“I argue, it is difficult to see how countries at all levels of development can respond constructively to contemporary challenges – from job creation and poverty reduction to participating in the technological revolution and global value chains, from promoting efficient and clean energy to mitigating climate change and greening the economy – without using some kind of targeted industrial policy,” he insisted.
Marshall was delivering the Professorial Lecture of the UWI, Cave Hill Campus, School of Undergraduate Studies and Research last Thursday evening under the title Caribbean Post-Pandemic Transitions and the Enigma of Merchant Capital.
Pointing out that the region was at the point where serious discussions were needed about transitions after the COVID-19 pandemic, Marshall called for industrialisation and diversification of the region’s economy while stressing the need for “value-added niches” across a range of sectors as well as development strategies that take into account the 17 United Nations Sustainable Development Goals (SDGs).
Making reference to the IMF’s requirement for countries to meet debt to GDP and fiscal targets and exercise discipline to sustain those targets, Marshall referred to this as “economics based on satisfying financial elites”.
“There is no need to make society squeal to have them perform at such an onerous rate; to put them under pressure to perform toward such onerous targets. There is no need for that,” Marshall said.
During his discourse, he raised several questions, including whether countries in the region would be able to “freely” choose a course of economic planning for sustained growth and recovery? He also called on academics and civil society groups to engage in meaningful discussions about plotting a new development roadmap for the region.
Insisting on the need for a more diversified economy and increased funding windows to encourage entrepreneurship to thrive, he also urged non-governmental organisations and individuals to challenge existing structures.
“If we don’t challenge structure then we are likely to see the culture of merchant capital remaining dominant,” he noted.
Marshall added that leadership at the level of the state should be “future oriented” and not driven by “the expediency of the political clock”.
“The first thing we have got to do is try to rebuild and revamp the tourism model. We have to move it away from the scaffolding around hospitality services towards giving rise to cultural experiences and entertainment. At this point we need to do more to create an environment for writers, for the film industry, for the theatre industry, for allied post production facilities to facilitate other Caribbean countries who may want to have post production work done,” he recommended.
He also suggested that more could be done to create employment within, and expand, the food and beverage sector, adding that niche markets such as the largely untapped West African market should be new areas for trade diversification.
“So our trade policy at all times must be mixed with a development policy that is aimed at diversifying our trade reliance, putting out new products – all driven by this value-added impetus. We value-add to tourism, we value-add to food and beverage and we value-add to tourism by paying attention to the arts,” he explained.
The UWI academic also proposed that over the medium to long-term regional states focus more on building out a biotechnology sector that encompasses areas such as biomass, agriculture and aquaculture.
“Wherever agriculture appears in a ministry, maybe the word biotechnology should be next to it. But the truth of the matter is that there is a need for far more imagination than what obtains today,” said Marshall.
He reiterated his call for the region to look more to China for its development funding needs, pointing out that while the East Asian country was of the view that it would not interfere in the affairs of countries, the Bretton Woods institutions were insistent on certain targets being met.
“We are not naive here. One of the downsides of Chinese lending is that quite often for the projects that they lend they want to see their service providers, their workers, gain a lion’s share in the provision of employment opportunities and deployment of their services to that host country. It comes down to bargain,” said Marshall, while indicating that the agreements between other countries and China have been varied. (MM)
