Improving competitiveness in BMCs

Generating sustained inclusive growth for poverty reduction requires that the Caribbean Development Bank’s borrowing member countries (BMCs) achieve some level of diversification by enhancing competitiveness.

 

So says Deputy Director of the Economics Department at CDB, Ian Durant, who recently highlighted that the areas of competitiveness where BMCs need to improve include macroeconomic stability, as well as the regulatory and institutional framework for doing business.

 

Addressing the 46th Annual Meeting of the Board of Governors of the CDB on “Achieving Sustainable Growth in the Caribbean: The Role of Competitiveness”, he explained that macroeconomic stability has the potential to discourage investors if they anticipate that corrective measures could change the return profile of investments.

 

“There is a need for some focus on the institutional improvements that are necessary to restore and maintain macroeconomic stability. Some of these reforms are incorporated in the Public Expenditure Framework. Such improvements include budgetary system improvements, revenue system enhancement, debt management 

improvement and advocacy on debt issues.”

 

As it relates to property registration, Durant pointed out that this can be a lengthy and involved process in the Region. He said added to this land dispute resolution, the quality, transparency and reliability of land administration needs to be improved, also noting that steps would include the use of electronic platforms for land registry.

 

He also observed that although general access to financial services is good in the Region, the access to finance of small and medium-sized businesses is affected by a number of deficiencies – relating to the legislative and regulatory framework for using moveable assets as collateral; credit bureau establishment; and improvements in the venture capital eco-system.

 

The Deputy Director further acknowledged that there is a pressing need for the improvement of the legislative framework for resolving insolvency in the Region.

 

According to him, good insolvency legislation performs many roles.

 

“Insolvency legislation promotes entrepreneurship and risk-taking by allowing a ‘fresh start’ in the case of failure and establishing clear guidelines for re-organisation procedures. Some BMCs, including Grenada, Jamaica, St. Kitts and Nevis, St. Vincent and the Grenadines and Trinidad and Tobago, have modernised their insolvency legislation. However, there is a need for such legislative improvements to be rolled out across the Region, and to address bottlenecks that prevent the implementation of this reform.” (TL)