Lingering issues, new challenges and global uncertainty – the coming year is set to bring both change and opportunity for the Eastern Caribbean. STAR Businessweek shares its predictions for what lies ahead.
(1) GREEN AND BLUE GROWTH
Eastern Caribbean states will play to their strengths in 2020 with a renewed emphasis on the economic power of their natural resources. Blessed with an expansive and rich marine environment, stakeholders are looking to tap into blue exports, with the OECS, United Nations and Caribbean Natural Resources Institute drawing up plans to harness the blue and green economies. The OECS strategy will run until 2024 and focus on exports of queen conch and algae-based products.
(2) THE RISE OF RENEWABLES
The mounting problems of climate concerns and soaring energy costs will continue into next year, driving even more impetus behind renewable energy sources. This is an area where the Eastern Caribbean states can thrive, with plenty of potential for solar and geothermal power. More renewable projects are set to come onstream in 2020, such as Dominica’s stalled geothermal generation bid which was revived with World Bank financing earlier in 2019, and these will further spur FDI and increase states’ resilience to natural disasters and other shocks.
(3) TOURISM TRENDS
Tourism continues to be the biggest money-maker for the Eastern Caribbean, but that doesn’t mean it is a static industry. Continually evolving, the break-out trends of 2020 will be ‘authentic tourism’, with an emphasis on community and social benefit, and ‘achievement tourism’ whereby travellers are looking to tick items off their bucket lists. For Caribbean visitors this could mean hiking the Pitons, gaining a diving certification, learning to sail or taking a Caribbean cookery course.
The cruise industry is also set to soar in 2020 and market leaders, Royal Caribbean and Carnival, will both be adding to their fleets and route networks. To accommodate expansion in this sector, Saint Lucia recently signed an MoU with the cruise companies to redevelop the Castries terminal and develop a new cruise port in the south of the island.
(4) GREATER CBI COMPETITION
Several Eastern States have thriving Citizenship by Investment (CBI) programmes that regularly take the top spots in the annual CBI report. St Kitts and Nevis, Dominica, Grenada and Saint Lucia will all face more global competition in the coming years as Greece launches its own CBI programme and other jurisdictions eye this lucrative market. Plans are underway to supplement the existing CARICOM Joint Regional Communications Centre with an OECS-only initiative on CBI that would establish uniform legislation and an oversight committee.
(5) SHIFTING GEOPOLITICS
Many long-awaited and impactful events will finally be realised in 2020, such as Britain’s eventual exit from the European Union and the already-divisive US elections scheduled for November. Also creating waves is the continuing rise of the Middle East, evidenced by Expo2020, which will bring almost 200 countries to Dubai in October and is the first world fair to be held in the Arab world. These factors will have far-reaching implications for Caribbean trade, diplomacy and FDI.
(6) REGIONAL UNITY
As world politics destabilise in 2020, regional unity will become even more important for Caribbean states, both in terms of CARICOM and the sub-region of the OECS. When Guadeloupe joined the OECS in early 2019, several areas of co-operation and integration were identified including transportation, sports, trade, agriculture and tourism. Progress in these areas in 2020 will help the Eastern Caribbean strengthen its economic resilience to external shocks.
(7) ECONOMIC SLUMP
The Caribbean’s economic recovery will continue to be sluggish in 2020, according to the International Monetary Fund which predicts real GDP growth of just 1.9 per cent in tourism-dependent states in 2020. This in line with the Fund’s gloomy global forecast which puts world GDP growth at a moderate 3.4 per cent in the coming year. To mitigate the slowdown, the Caribbean will need to practise better fiscal responsibility and renew its focus on economic diversification.
(8) NEW WAYS TO MANAGE DEBT
By 2020, nearly 75 per cent of small states with unsustainable debt will be Caribbean countries, according to the Organisation for Economic Co-operation and Development. The ongoing Caribbean debt crisis will force governments to look at new ways of balancing their budgets in 2020. In this vein, Saint Lucia will be the first in the region to trial the World Economic Forum’s Country Financing Roadmap, which aims to make development financing more holistic by creating the right enabling environment to attract high-quality investment and private capital.
(9) TRACKING THE NUMBERS
Ensuring the public purse is spent wisely means monitoring populations and their needs. In 2020 CARICOM will embark on a region-wide population and housing census. The 2020 Census will run until 2022 and use mapping, data collection, computer-assisted interviewing and other tools to determine any development gaps and how close states are to achieving their Sustainable Development Goals.
(10) HEALTH AFTER HURRICANES
Every year brings new devastation to the Caribbean as hurricanes intensify. While there was considerable focus on building economic and infrastructural resilience during the 2019 hurricane season, next year will see more work being done to address the impact on public health.
In late 2019 the World Bank approved a US$ 30.6mn regional health project to improve co-ordination for public health emergencies in the OECS. The initiative is intended to boost the capacity of health facilities in Dominica, Grenada, Saint Lucia and Saint Vincent and the Grenadines, ensure continuity of services in the wake of a natural disaster and improve disease surveillance systems.
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