Many nations in the Caribbean and Latin America have a new momentum in 2019. Nations that have invested and worked hard to make their economies strong at home and attractive to those abroad are reaping the rewards. Each nation’s story is unique, but within them can be found shared lessons for all.
With Saint Lucia’s annual budget having recently been delivered, it is a fitting time to consider the Caribbean and wider Latin America’s economic comparisons and contrasts.
Success Stories and Why They’re Succeeding
Recent years have seen Saint Lucia achieve some impressive economic feats, with record levels of tourists, a number of big infrastructure projects — like the Hewanorra International Airport upgrade and the Pearl of the Caribbean — commissioned, real progress being made on the development of Vieux Fort cruise terminal, and complementary achievements alongside them.
The stats also show the strength of Saint Lucia’s performance in recent years when assessed regionally. In 2016 Saint Lucia saw a real GDP growth of 3.89%, in 2017 3.67%, and while 2018 was a more modest 0.99%, projections show that 2019 should deliver a return to form with a 3.32% rate of growth. This compares to the region-wide average which has been around 2.5% a year.
While Saint Lucia’s record is commendable, other nations have also been driving forward strongly. Panama has experienced not only some good years, but good decades economically, growing at an annual rate of 7.2% between 2001 and 2013, and maintaining an average of over 5% between 2014 and 2017, and now growing at over 4% after a drop-off in the intervening period. Like Saint Lucia, work remains to be done in better channelling this growth into stronger outcomes in education and employment opportunities, but unquestionably strong inroads have been made in the reduction of poverty in the nation.
The Dominican Republic aspires to be a high income country by 2030. Since president Danilo Medina was elected to office in 2012, the nation has been bold in devising a National Development Strategy (Vision 2030), defying those who say modern politics is about the soundbite and daily news cycle rather than defining a big vision and chasing it. The Dominican Republic has achieved enviable growth, averaging 5.1% between 2008 and 2018, and an outstanding run between 2014 and 2018 that saw it average 6.6%.
Nations Looking to Turn the Page
Recent years have seen prosperity and success for some nations, while others have faced great trials. Barbuda, Dominica and St. Martin are examples of the devastation that natural disasters can cause. Any regional assessment must always factor in that a strong economy today can quickly become embattled tomorrow because tides can change suddenly and savagely. Beyond the environment, there are other hurdles to obstruct the Caribbean’s family economic growth as a whole.
Cuba’s economic performance has also been a key regional dynamic, given the generational changes seen in the transfer of power from the Castro brothers to new president Miguel Díaz-Canel, and the normalisation of relations with the United States, albeit temporarily, and now very much in a ‘stop-start mode’ under the Trump Administration. Many have watched, hoping to see a new momentum that brings greater opportunities for the Cuban people.
As a nation of approximately 11.49 million, Cuba remains the largest regional nation by population, yet has stagnated at that level since 2013. This in contrast to Haiti and the Dominican Republic — with populations of 10.43 million and 10.28 million respectively in 2013 — who are projected to reach 11.39 million and 11.12 million by 2020. In short, while Cuba’s president has sought to kickstart the economy with a new constitution and mega tourism push, ultimately the Communist Party of Cuba’s biggest hurdle to greater economic growth in the nation would appear to be the Communist Party itself.
Things Looking Up Down South
The Caribbean is at once its own region and yet also often counted alongside South America given the shared history and the cultural and political links. For the economic giants of Latin America — Brazil and Mexico — there is little in the way of direct comparison and contrast given that these nations’ economies are among not only the biggest in the region, but the world.
The recent stories of South American nations like Chile and Uruguay can offer key considerations for Caribbean nations as they look to plan for the future of their economies. In Chile, the free market policies of President Sebastián Piñera have seen the country regularly enjoy annual GDP growth north of 2%, with 2018 delivering particularly strong quarters of 4.7%, 5.3%, 2.6% and 3.6%.
Uruguay enjoyed a 15-year run of economic growth up to 2017 and, after a brief dip, has now lifted once more. This achievement is all the more impressive considering that the nation of 3.5 million was required to navigate the economic meltdowns seen in its neighbours of Brazil and Argentina. For Caribbean nations, Uruguay offers a case study in how to avoid catching a flu when a regional giant comes down with a cold.
This all goes to show that while some nations may flirt anew with isolationism and protectionism, for others who identify a path in the global market, there are rich rewards to be had, and defences against the greater risks that can come with it.
The Challenges Over the Horizon
The old adage ‘no one is an island’ is applicable to the Caribbean in the global economy. External challenges remain, such as the ultimate outcome of Brexit, that test the region’s growth and economic outlook but, even so, recent years have seen strong advances in regional partnerships.
Just as the EU has presided over immense growth of regional wealth in Europe, so too can the Caribbean not only look forward to the profits of financial growth among the islands, but also join in the same charge ahead that the giants of Latin America, like Brazil and Mexico, will engage in as the years ahead deliver continued growth.
The Core Takeaway for the Caribbean
Even amidst some testing and turbulent chapters, the Caribbean is seeing new growth, new opportunities emerge, and a clearer and stronger sense of identity as it drives into the future. Where there is universal positivity to be had, is that recent years have also seen a strong shift into greater regional integration around the Caribbean.
Beyond the particular achievements of government and economists, the credit for this progress rightfully goes to entrepreneurs, innovators, small businesses and their employees who’ve delivered the region to this point. Now the test ahead is to sustain it and advance it even further.
