View
4
Download
0
Category
Preview:
Citation preview
Dr. Justin Ram
Director of Economics
Caribbean Development Bank
DRIVING DIVERSIFICATION THROUGH
COMPETITIVENESS AND EQUAL OPPORTUNITY
Why does this matter for inclusive development?
ECONOMIC OUTLOOK FORUM
HYATT REGENCY| 30 JANUARY 2020
SELECTED REGIONAL
INDICATORS
A REMINDER: THE CARIBBEAN’S
DEVELOPMENT CHALLENGES
OUTLINE
03
0102 COMPETITIVENESS AND EQUAL OPPORTUNITY
NEXUS
THE COMPETITIVENESS CHALLENGE and
OPPORTUNITIES04A GLANCE AT THE REGION
THE CASE OF TRINIDAD AND TOBAGO
Note: Based on available data from the World Bank. The Lowest Income Earner is always Haiti. The Highest Income Earner is The Bahamas until 2008, then Trinidad and Tobago thereafter
*PPP, current international 4
GDP Per Capita*, 1996 – 2018 Highest Regional Earner$32,228
Lowest Regional Earner$1,819
Caribbean small states$16,270
World$17,914
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000P
PP,
Cu
rre
nt
Int’
l $
Ground Zero01
01Many regional development challenges are persistent
Development Challenges
Implementation Gap
Regional Approach Gap
Cross-cutting
Challenges
COMPETITIVESNESS AND
EQUAL OPPORTUNITY NEXUS02
The Competitiveness and Equal Opportunity Nexus
Turning equal opportunity into tangible rewards and inclusive well-being02
For sustained inclusive development in the Caribbean:
02
1. There needs to be strong state backing for the public goods that
create equal opportunities like education, health and transport
2. We must foster dynamic export driven, competitive and resilient
economies
SELECTED REGIONAL
INDICATORS03
-0.1%
1.1%
1.0%
0.0%
4.5%
3.0%
4.2%
10.9%
BAR
SLU
JAM
TT
GUY
GRN
ANT
ANG
Source: CDB, Central Banks, NSOs
03In 2019, the regional economy expanded by just over 1%.
Development Challenges
2018 GDP Growth (%), Selected BMCs
BMC Average = 1.2%
MACROECONOMIC
Source: Central Banks
03In 2018, sovereign debt levels fell in most countries
Development Challenges
Government Debt as a share of GDPLatest available statistics for 2018
The median debt level fell slightly
MACROECONOMIC
2019 Estimates coming soon !!
Overall Unemployment Rate (%)2018 estimate unless otherwise noted
1 in every 4young people are unemployed
Source: IMF, Statistical Offices, local reporting, CDB*Barbados: Official statistic as at September 2018, therefore does
not consider significant public sector layoffs in the fourth quarter
03A few countries are struggling with extremely high unemployment rates
Development Challenges
HUMAN DEVELOPMENT
Rising crime levels and heighted citizen insecurity
threaten the social fabric of Caribbean society03
HUMAN DEVELOPMENT
Intentional Homicide Rate, per 100k population2017 unless otherwise stated
Source: Official statistics and national reportingSource: IDB 2017Note: Caribbean cities included in the study are New Providence, The Bahamas;
Greater Bridgetown Area, Barbados; Kingston Metro Area, Jamaica; Paramaibo,
Suriname; and Port of Spain Metro, Trinidad and Tobago.
Forecasted Population Change (%)2015 – 2100
Source: UN Department. of Economic and Social Affairs
03Some Caribbean country populations are predicted to decline during this century
Development Challenges
HUMAN DEVELOPMENT
32.5 2.4 2.3 2.1
2 2 1.91.8 1.7 1.6
1.4
0
0.5
1
1.5
2
2.5
3
3.5
Total Fertility Rates (%)2010 – 2015
2100: UN Projected World Population > 11.2 billion
Global population
evolution is helping
to change world
trade patterns
1950
>175 million(7%)
2017
361 million(5%)
2017
4.5 billion(60%)
NORTHERN AMERICA
2100
499 million(4%)
1950
>500 million(20%)
2017
742 million(10%)
EUROPE2100
653 million(6%)
ASIA2100
4.8 billion(43%)
2017
1.3 billion(17%)
AFRICA
2100
4.5 billion(40%)
2017: World Population = 7.6 billion1950: World Population = 2.5 billion
Source: Financial Times; UN Dept. of
Economic and Social Affairs
2017
646 million(9%)
2100
712 million(6%)
LAC
2017
41 million(0.5%)
2100
72 million(0.6%)
Oceania
14
03Population trends provide Opportunities
HUMAN DEVELOPMENT
THE COMPETITIVENESS
CHALLENGE and OPPORTUNITIES04A GLANCE AT THE REGION
THE CASE OF TRINIDAD AND TOBAGO
Declining energy sector activity brings fore the
need for diversification.
Source: Review of the Economy 2019 16
0.00
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
2014 2015 2016 2017 2018
TT$
Mill
ion
s
Crude oil exploration and extraction Natural gas exploration and extraction
Manufacture of Petrochemicals Petroleum support services
Refining (incl. LNG) Petroleum distribution
Asphalt
0.00
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
80,000.00
90,000.00
100,000.00
2012r 2013r 2014r 2015r 2016r 2017r 2018r
93,533.80 94,895.00 96,335.20 98,402.6095,621.90
91,729.30 92,029.90
Non-Energy Energy
PRODUCTIVITY AND COMPETITIVENESS
04
ENERGY SECTOR GDP BY INDUSTRY GDP BY SECTOR
There needs to be more consistent growth in non-energy
industries.
Source: Review of the Economy 2019 17
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
2013 2014 2015 2016 2017 2018
Pe
rce
nt
PRODUCTIVITY AND COMPETITIVENESS
04Growth of Selected Non-Energy Sectors
Monochrome growth in labour opportunities: services
18
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
*
20
12
20
13
20
14
20
15
20
16
PRODUCTIVITY AND COMPETITIVENESS
04Sectoral Distribution of Employment
Lower domestic inflation aided competitiveness in recent years.
19
PRODUCTIVITY AND COMPETITIVENESS
04Nominal and Real Exchange Rate
5.9
6
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
Real Effective Exchange Rate (Left Axis) Nominal Exchange Rate (Right Axis)
Ap
pre
ciat
ion
Dep
reciation
High propensity to import increases the consumption of ForEx.
20
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
0
2
4
6
8
10
12
14
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
US$
Mill
ion
Mo
nth
sNet Official Reserves (US$Mn) (Right Axis) Import Cover (months) (Left Axis)
PRODUCTIVITY AND COMPETITIVENESS
04Net Official Reserves and Import Cover
1. Why is this the case?
2. What can be done?
PRODUCTIVITY AND COMPETITIVENESS
04
PRODUCTIVITY AND COMPETITIVENESS
04A Regional Glance at Competitiveness
Ease of Doing
Business rankings
have deteriorated
across the Region
2020
2020
7193
111105113119135128
130
134139146
162179
12
Source: World Bank
PRODUCTIVITY AND COMPETITIVENESS
04WB Doing Business Report 2020
126
106 99 147
139 104 111 113
106 121
Top 30%
Middle 40%
Bottom 30%
Regional Averages
126/190
Source: World Bank
Trinidad and TobagoPRODUCTIVITY AND COMPETITIVENESS
04WB Doing Business
Report 2020
79
126 43 158
67 57 160 134
174 83Top 30%
Middle 40%
Bottom 30%
105/190
Source: World Bank
Let’s take a closer look at Trinidad and Tobago
0
20
40
60
80
100
120
140
160
180
Ease of Doing Business Rank
Starting a Business
Dealing with ConstructionPermits
Getting Electricity
Registering Property
Getting CreditProtecting Investors
Paying Taxes
Trading Across Borders
Enforcing Contracts
Resolving Insolvency
DBR 2012
Source: World Bank
PRODUCTIVITY AND COMPETITIVENESS
04
2008
67Out of 178 countries
38
pla
ces
105
TT WB Doing Business Reform Agenda
DBR 2008 - DBR 2020 REFORMS
PRODUCTIVITY AND COMPETITIVENESS
04
Positive Reforms
Negative Reforms
Governmentor agency decides to raise
resources on the market to
build a resilient asset
Financiersmay include households or insurance companies
investing premiums in assets that build resilience
and safeguard their own assets
Assetis an airport or for on-lending
to households e.g., for solar
panels or micro-grids
Coupon is agreed to upfront on
bridge loan, but revised for Pre-
Resilience bond after project is
completed based on resilience
credit rating provided by an
independent agency
Moratorium Clauseon payments is activated if
asset stops functioning after
shock. Payments to financiers
resume after a period of time
Evaluationcompleted by an independent
agency that gives the asset a
resilience rating
Opportunities - Innovative Finance - Pre-Resilience Building
Bond
Private
Sector
State-Owned
Enterprise
04
Lowering costs and
democratizing
finance
04 Challenges to Opportunities
CSN and
Digital Payment
System
Real-time Financial
and Trade data
Tax Data
The Caribbean as a
Digital Test Bed
Is it time for a regional digital settlement network?
How would a digital payments system work?
What are the benefits?
How it would work and its benefits04VAT payment and transaction data
automatically paid to the tax
authority
Merchant immediately receives
payment in their digital account
Data records about the transaction
are automatically submitted to the
merchant’s bank, customers’ banks,
Central Bank, and other regulators
Customers make
payments digitally
Free Movement of
Capital
Reduced Transaction
CostsFaster and Convenient
Transfers
Digital Finance
Network EffectsImproved Financial
Inclusion
Benefits
However, comparable costs are low, what is driving
this? Is there an opportunity to build on this?
30https://izzso.com/what-does-a-kfcs-zinger-cost-you-in-the-caribbean/
PRODUCTIVITY AND COMPETITIVENESS
04
The Competitiveness and Equal Opportunity Nexus
Turning equal opportunity into tangible rewards and inclusive well-being04
Reminder: For sustained inclusive development in the
Caribbean:
04
1. There needs to be strong state backing for the public goods that
create equal opportunities like education, health and transport
2. We must foster dynamic export driven, competitive and resilient
economies
How to avoid Culture eating competitiveness for
breakfast
Source: PEMANDU
8 Steps to Delivery
“We should not let the
urgent stop us from
thinking about the
important. The linked
challenges of climate and
development will shape
humanity’s future”.
Martin Wolf, FT Columnist
Cabinet Prioritization
Planning Labs
Open Day
Roadmap
KPI Targets
Implementation
External Audit
Annual Report
1
2
3
4
5
6
7
8
Collaborating to
determine the
Strategic Direction
for development; being
open to redesigning
institutions and
infrastructure
Gathering
stakeholders in
government, business,
and the community to
develop a detailed
National
Development Plan
Hosting open forums
to share the
Development Plan
with the public and
solicit feedback
Publishing a
Roadmap for
Delivery with specific
objectives and action
plans
Setting KPIs for
monitoring progress
and encouraging
accountability
Meticulous execution
of the Development
Plan ensuring that
targets are met within
stipulated time and at
uncompromising
quality standards
Seeking out external
validation of projects
and achieved targets
Communicate the
achievements and
challenges with
implementing the
rebuilding program to
both HOG and the
public
We can leverage the
Delivery Unit model to
design and
strengthen our
institutions and
regulations to
encourage
competitiveness and
guarantee equal
opportunity for all
04
True Inclusive and Sustained Growth =
f(Equal Opportunity, Competitiveness,
Challenges−1...)
Final Thought
Recommended