Overall, the Caribbean region has lagged in its recovery from the global recession that began six years ago. In some Eastern Caribbean nations, unemployment is still as high as 20% and debt as a percentage of GDP exceeds 100%. There has also been a change in the region’s economic environment, as many nations are transferring their focus from agriculture to services. For sustainable economic growth to occur, countries in the Caribbean need to diversify their economies and expand their export markets.
For Jamaica, national debt is a formidable problem. Currently, Jamaica’s total debt amounts to 140% of Gross Domestic Product and servicing the debt accounts for about 50% of the country’s annual expenditures. Recent recession and stagnant growth are direct results of this monumental debt, which has displaced capital needed for investment in Jamaica’s economy. However, Jamaica has begun instituting economic reforms that aim to reduce debt and spur economic growth. So far, the reforms have been successful, as economic growth is occurring and inflation and unemployment are decreasing.
In recent years, Trinidad and Tobago has been one of the few CARICOM countries to experience a trade surplus. This trade surplus has primarily been driven by the nation’s oil, gas, and petroleum exports. However, growth in Trinidad and Tobago’s petroleum industry has been negative as of late, making it paramount that the country develops its other major industries. And so far it has, with growth occurring in its manufacturing, agriculture, and services industries. Besides diversifying its economy, Trinidad and Tobago has also expanded the export market for its liquefied natural gas (LNG) products to China, Argentina, and Brazil. Historically, the United States has been the main importer of Trinidad and Tobago’s LNG products, but the U.S. has become more self-sufficient in this industry, making it necessary for Trinidad and Tobago to locate new buyers.
There is no doubt that trade can foster economic growth in the Caribbean region. Exploring new export markets can open the door for new economic opportunities and partnerships. In addition to creating diversified economies, expanding export markets is vital to the future economic success of the Caribbean nations.
Stay tuned to the globalEDGE blog this week to learn more about business in the Caribbean!