By: Staff Writer
January 7, 2025
A joint report by the e Inter-American Development Bank (IDB) and the Development Centre of the Organisation for Economic Co-operation and Development (OECD) said that potential GDP per capita growth is estimated at just 1.4 percent, though slightly above Latin America at 1.1 percent.
The report, Caribbean Development Dynamics, 2025, takes a new look at the development issues in the region and instead of focusing on the size of the challenges, it instead offers up new opportunities for growth.
The report said that despite Caribbean economies being “vulnerable,” to climate change issues, “The region’s rich biodiversity and natural endowments – hosting almost 10 percent of the world’s coral reefs, and around 45 percent and 25 percent of the fish and coral species, respectively – provide the basis for developing new activities in renewable energy, sustainable tourism and transport, the blue and circular economy, and nature-based solutions.”
The report also said that there is a need for strengthening social inclusion and social protection mechanisms because “social gaps,” remain constant as “almost one in four people are poor in the Caribbean on average, and 37 percent live in moderate or severe food insecurity (33 percent in Latin America). On average, almost one worker in two has an informal job (47.2 percent, against 57 percent in Latin America) and more than a third (34.1 percent) of the population lives in households where all workers are informal.”
The report also said: “Potential growth in the Caribbean is relatively low and has been declining. Potential GDP per capita growth is estimated at around 1.4 percent, slightly above the Latin American average (1.1 percent) and below that of advanced economies (1.8 percent). This is associated with limited levels of labour productivity in the Caribbean, representing 46 percent of the OECD level in 2023. Public debt remains high, although with substantial heterogeneity across countries and with several among them embarked on important consolidation efforts. In 2022, the average central government debt was 78.8 percent of GDP, well above the average for Latin America (52.9 percent).”
It added: “Citizen satisfaction with democracy and public services has declined. In 2023, 65 percent of people, on average, expressed low satisfaction with the democratic system, an increase of 22.6 percentage points (p.p.) in the last decade.
“In 2023, only 40 percent of Caribbeans were satisfied with health services, declining by 15.4 p.p. in the last decade. Satisfaction with education is higher (65.2 percent, on average in 2023) although it fell by 9.5 p.p. Citizen security is paramount, as several Caribbean countries rank among those with the highest per capita average murder rates globally.
“The average cost of crime is estimated at 3.7 percent of the region’s GDP. Better data are key for informed policy design, implementation and monitoring. In 2021, only half of the Caribbean countries with data available were implementing a statistical plan. Strengthening national statistical offices and open government practices with intra-regional collaboration and digital transformation will be key in promoting citizen engagement and better public services, and, ultimately, strengthening the social contract.”
The report further called for policymakers to “mobilise more financial resources to finance development,” and “deepen regional integration and expand international partnerships.”