Thu | Feb 20, 2020

CDB highlights blue economy contribution to Jamaica - Projects 4.1% growth for the Caribbean

Published:Wednesday | February 12, 2020 | 12:12 AM
Director of Economics at Caribbean Development Bank Dr Justin Ram (left) and President Dr Warren Smith.
Director of Economics at Caribbean Development Bank Dr Justin Ram (left) and President Dr Warren Smith.

The Caribbean Development Bank, CDB, has estimated that the blue economy was responsible for about seven per cent of gross domestic product, GDP, or just over US$1 billion in Jamaica in 2017, according to director of economics at the institution, Dr Justin Ram.

He said the bank has continued the advocacy for the sustainable development of the blue economy by publishing a working paper on its measurement, and that the results support increased investment in those activities.

Ram made the pronouncement during the CDB’s annual news conference in Barbados on Tuesday.

The World Bank has described the blue economy as the “sustainable use of ocean resources for economic growth, improved livelihoods and jobs while preserving the health of the ocean ecosystem”. The European Commission defines it as “all economic activities related to oceans, seas and coasts”.

Regarding the wider region, CDB president Dr Warren Smith said the bank is projecting regional GDP growth of 4.1 per cent for this year, consistent with expectations of accelerated global economic activity, and the oil find in Guyana.

“With estimated daily production of about 100,000 barrels of oil, Guyana should dominate regional growth performance. Other growth drivers in the region should be the construction, tourism and agriculture sectors,” he said.

However, Smith said economic growth will remain lopsided and below the sustainable rates needed for long-term resilience; and that borrowing member countries such as Barbados, Grenada, Jamaica and St Kitts-Nevis must stay on course with their socio-economic reform programmes.

“Others should join the bandwagon and commence, with alacrity, implementation of their own adjustment programmes,” he said.

In his review of the performance of Caribbean economies in 2019, the CDB president said that unsurprisingly, the fastest growing were Anguilla at 10.9 per cent and Dominica at 5.7 per cent.

Tourism performance improved in nearly every borrowing member countries, with visitor arrivals growing by double digits in St Kitts-Nevis and the Cayman Islands. Arrivals also rose sharply to pre-hurricane levels in Anguilla, he said.

Despite gains in tourism, the Barbados economy contracted slightly following delays in the commencement of major private sector projects.

Nonetheless, that country made notable progress in implementing its economic recovery and transformation plan, Smith noted, leading to a primary surplus of six per cent in 2019 compared with 3.5 per cent of GDP in 2018. The debt ratio dropped to under 120 per cent of GDP from around 127 per cent in 2018, and Barbados’ credit rating improved following the successful restructuring of the government’s external commercial debt.

Smith said the debt ratio fell in 10 borrowing member countries, with the declines being steepest in Barbados, Grenada, Jamaica and St Kitts-Nevis, all of which are at various stages of home-grown fiscal reform programmes.

Prior to Hurricane Dorian, The Bahamas’ fiscal deficit was narrowing. Debt rose slightly to 66.3 per cent of GDP to meet the initial post-hurricane financing requirements, but remained manageable, he said.

Director of Projects at the CDB, Daniel Best, said that through the United Kingdom Caribbean Infrastructure Partnership Fund, UKCIF, the development bank was providing a £16.7 million grant to the Jamaican government for the Southern Plains Agricultural Development Project to help Jamaican farmers increase productivity and gain greater market access.

UKCIF provides grant funding for infrastructure projects in eight Caribbean countries eligible for overseas development assistance, and one UK overseas territory. CDB is the implementing partner for the fund.

On the energy front, Best said that last year CDB invested nearly US$100 million to finance installation of more than 200,000 LED street lights across Antigua & Barbuda, Jamaica, The Bahamas, St Vincent & the Grenadines, Suriname and St Kitts-Nevis.

That translates to 86,000 tonnes of CO2 emissions savings, more than 85,000 kilowatts of energy savings and in excess of US$26 million in savings annually, the bank said.