Bj sept 2013 (1) by Linda Hutchinson-Jafar

contents 4 From the Editor

September 2013

Richard Branson on how to take an inspiration vacation

5 Growth in LAC will reach 3.0% in 2013

UNCTAD chief urges investment for sustainable

8 Growing Pains: World

development

Economic Outlook Update 37

Food Price Watch, July 2013

The Lighter Side

10 Time to move to a more sustainable growth model 15 Strength of Barbadian institutions and the resolve of Barbadians will see us through the crisis 20 Young males in LAC lag behind rest of the population in longevity 24 The European sovereign debt crisis - past, present and future 30 Ambassador Roberto Azevêdo takes helm at WTO

Editor: Linda Hutchinson-Jafar Consulting Editor: Donna Ramsammy

Statement of Ambassador Roberto Azevêdo of Brazil on becoming the the sixth Director-General of the World Trade Organisation (WTO)

Design and layout: Karibgraphics Ltd. Business Journal is published by: Caribbean PR Agency #268 Harold Fraser Circular, Valsayn, Trinidad and Tobago, W.I. T/F: (868) 645-0368 hutchlin@gmail.com www.bizjournalonline.com © 2013. No part of this publication may be reproduced without the written permission of the Publisher.

In addition, growth in China and other emerging markets is slowing down, thus

From the Editor’s Desk

reducing demand for commodities. While most Caribbean countries are net commodity importers, this may have a bearing on extractive and commodity based economies, such as Trinidad and Tobago. The global financial crisis five years ago also exposed the fragility of the growth model in some Caribbean countries, according to Tuluy,

As we head towards the final quarter of 2013,

with countries such as Jamaica and the OECS

the news on the Caribbean’s economic front

islands experiencing contractions of -3.1%

continue to be challenging from Jamaica in

and -5.3% respectively in 2009.

the North to Trinidad and Tobago in the most

countries of the region were able to get by with

southern region although the latter country is

a moderate slowdown compared to their pre-

faring much better than most.

crisis growth levels.

The majority of the economies in the

Surely,

the

Caribbean

Only a few

cannot

continue

Caribbean, dependent mainly on the tourism

limping along as it has been over the last four

sector are still facing pressures of halting the

years but will have to take the tough macro–

slide and putting their countries on a sustainable

economic measures, bite the bullet without

path.

putting too much pressure on their populations

A recent high level forum put the Caribbean

and on the social sector.

under scrutiny to determine a path that could

But easily said than done!

lead

Well, maybe Tuluy may have some pointers

the

mainly

small

countries

towards

sustainability.

for the Caribbean in his statement to the Forum

World Bank Vice President for Latin America

which we have reproduced for you.

and the Caribbean, Hasan Tuluy told the

We’d also like to hear from you on what road

meeting held in the Bahamas that the region’s

you think the Caribbean should take to emerge

macroeconomic

from the economic morass that has engulfed

stability

significantly

challenged from the outside.

them. Write to me at hutchlin@gmail.com

Sluggish growth in Europe and to a lesser extent in the US has resulted in declining demand for goods and services, tourism in particular – and figures from the Caribbean Tourism Organisation reflect this.

SEPTEMBER 2013 | Business Journal

Linda Hutchinson-Jafar

Editor

Growth in Latin America and the Caribbean will reach 3.0% in 2013 As a whole, Latin American and Caribbean

constraints in the Caribbean, Central America

countries will grow by 3.0% in 2013, which is

and Mexico, and South American vulnerability

similar to last year’s growth rate, according to

due to its dependence on natural resources.

an ECLAC report.

Furthermore,

economic

growth

remains

In the Economic Survey of Latin America

largely dependent on consumption, which in

and the Caribbean 2013, ECLAC states that

2013 has expanded less than in the previous

the lower growth rate than the most recent

year. Meanwhile, the contribution of investment

estimate (3.5% in April) was partly due to

to GDP will be modest, and net exports will make

slow growth in Brazil and Mexico. In addition,

a negative contribution owing to the larger

several countries that were growing quickly -

increase in imports than exports. Exports were

such as Chile, Panama and Peru - experienced

down in the first half of 2013, and are probably

a slowdown in economic activity in recent

facing the end of the boom period in commodity

months.

prices.

The report adds that the region has some

According to Alicia Bárcena, Executive Secretary

weaknesses that could affect it in the short

of ECLAC, “the current situation highlights

and long term, given the current negative

problems of growth sustainability in most of the

external

weaknesses

region’s economies, hence the need to broaden

include the high dependency on exports to

and diversify sources of growth. We also need

Europe and China, a growing current account

a social covenant to increase investment and

deficit (reaching 2.0% of GDP in 2013, which

productivity, as well as changing production

is the highest level since 2001), major fiscal

patterns to grow with equality.”

environment.

Such

Alicia Bárcena, Executive Secretary of ECLAC, during the launch of Economic Survey of Latin America and the Caribbean 2013. Photo: Carlos Vera/ ECLAC

SEPTEMBER 2013 | Business Journal

The region’s moderate economic performance

minerals, metals, oil and some foodstuffs. This

is linked to estimated world economic growth of

trend is associated with the euro zone recession

2.3% (which is a similar rate to 2012). Owing to

and the slowdown of growth in China.

the ongoing recession in the euro zone during

In 2013, export values are expected to rise

2013, developing countries are expected to

by around 4.0%, which is higher than the 1.5%

remain the drivers of world economic growth

growth recorded in 2012 but much lower than

(although

United

the rates above 20% observed in 2011 and

States and Japan are expected to boost these

2010. Imports are expected to grow by 6.0% in

economies and promote greater worldwide

2013 (compared with a rise of 4.3% in 2012).

economic growth in the coming year).

As a result of the region’s moderate economic

According to ECLAC estimates, Paraguay leads

growth, labour demand is not expected to rise

growth in 2013, with a 12.5% rise in GDP,

significantly in 2013.

followed by Panama (7.5%), Peru (5.9%),

from 6.9% to 6.7% in the first quarter of 2013,

Bolivia (5.5%), Nicaragua (5.0%) and Chile

while 12-month cumulative regional inflation to

(4.6%).

May 2013 stood at 6.0% (compared with 5.5%

policies

adopted

the

Argentina is expected to grow by

3.5%, Brazil by 2.5% and Mexico by 2.8%. Central America should grow by 4.0%, while South America is expected to grow by 3.1%.

Unemployment dipped

in December 2012 and 5.8% in the 12 months to May 2012). In

the

Economic

Survey

2013,

ECLAC

The Caribbean is expected to maintain the slow

analyses economic growth in recent decades

upward trend in growth observed in previous

and presents proposals to boost investment

years (to reach 2.0%).

and productivity, with a view to achieving more

In the first six months of 2013, prices for many

stable and sustainable growth in the future.

of the region’s exports dropped, particularly

Juan Alberto Fuentes, Director of the Economic Development Division of ECLAC, during the launch of Economic Survey of Latin America and the Caribbean 2013. Photo: Carlos Vera/ ECLAC

SEPTEMBER 2013 | Business Journal

While this period has seen profound economic

policies for investment, so as to aid productive

transformations in Latin America and the

diversification in sectors that export or compete

Caribbean, levels of inequality and poverty

with imports (tradable-goods sectors).

remain high in many countries. Despite the

The

report

highlights

the

need

for

positive terms of trade, capital accumulation

robust institutions and social covenants to

has been insufficient and there have been

encourage investment, including short-term

limited gains in labour productivity.

macroeconomic policies with a stabilizing and

According to the document, macroeconomic policies

monetary

macroeconomic policies linked with industrial,

and foreign exchange policies) could make

social, labour and environmental policies - all

a vital contribution to increased growth with

with a view to promoting sustainable structural

equality in the future. This explains the need

change and greater productivity.

(and

particularly

strategically

support

fiscal,

countercyclical effect, as well as long-term

macroeconomic

Launch of Economic Survey of Latin America and the Caribbean 2013. Photo: Carlos Vera/ECLAC

SEPTEMBER 2013 | Business Journal

GROWING PAINS World Economic Outlook Update Global growth is projected to remain subdued at slightly above 3 percent in 2013, the same as in 2012. This is less than forecast in the April 2013 World Economic Outlook (WEO), driven to a large extent by appreciably weaker domestic demand and slower growth in several key emerging market economies, as well as a more protracted recession in the euro area. Downside risks to global growth prospects still dominate: while old risks remain, new risks have emerged, including the possibility of a longer growth slowdown in emerging market economies, especially given risks of lower potential growth, slowing credit, and possibly tighter financial conditions if the anticipated unwinding of monetary policy stimulus in the United States leads to sustained capital flow reversals.

interest rate and financial market volatility have

Stronger global growth will require additional

risen. Peripheral euro area sovereign spreads

policy action. Specifically, major advanced

have widened again after a period of sustained

economies

supportive

declines. Emerging market economies have

macroeconomic policy mix, combined with

generally been hit hardest, as recent increases

credible plans for reaching medium-term debt

in advanced economy interest rates and asset

sustainability and reforms to restore balance

price volatility, combined with weaker domestic

sheets and credit channels. Many emerging

activity have led to some capital outflows, equity

market and developing economies face a trade-

price declines, rising local yields, and currency

off between macroeconomic policies to support

depreciation.

should

maintain

weak activity and those to contain capital outflows.

Macro-prudential

and

Global growth increased only slightly from

structural

an annualized rate of 2Â˝ percent in the second

reforms can help make this trade-off less

half of 2012 to 2Âž percent in the first quarter

stark.

of 2013 (Figure 1): CSV, instead of accelerating

Financial market volatility increased globally

further as expected at the time of the April 2013

in May and June after a period of calm since last

WEO. The underperformance was due to three

summer. In advanced economies, longer-term

factors.

SEPTEMBER 2013 | Business Journal

First, continuing growth disappointments in

the effects on growth and the impact of tight

major emerging market economies, reflecting,

fiscal and financial conditions.

to varying degrees, infrastructure bottlenecks

Third, the U.S. economy expanded at a weaker

and other capacity constraints, slower external

pace, as stronger fiscal contraction weighed on

demand

prices,

improving private demand. By contrast, growth

financial stability concerns, and, in some cases,

was stronger than expected in Japan, driven by

weaker policy support.

consumption and net exportsâ&#x20AC;&#x201D;the latter helped

growth,

lower

commodity

Second, a deeper recession in the euro area, as low demand, depressed confidence, and

by the 20 percent depreciation of the yen (in real effective terms) since late 2012.

weak balance sheets interacted to exacerbate

Photo News Historic gas agreement signed

Energy Ministers Ramnarine (left) and Ramirez shake hands upon signing the historic agreement to develop the giant Loran Manatee Cross-border Gas Field.

Trinidad and Tobagoâ&#x20AC;&#x2122;s Energy Minister Kevin

This field has approximately 10 trillion cubic

Ramnarine and his Venezuelan counterpart

feet of natural gas. The signing was described

Rafael Ramirez in mid-August signed an

as historic and as a first for the Americas.

agreement that establishes the functional

It comes 10 years after an MOU was signed

and governance structure to oversee the

by both countries to develop cross border

development of the giant Loran Manatee gas

reserves. Work will now commence on a

field that straddles the Trinidad and Tobago /

development plan for the optimal production

Venezuela maritime border.

of the reserves.

SEPTEMBER 2013 | Business Journal

Time to Move to a More Sustainable Growth Model By Hasan Tuluy World Bank Vice President for Latin America Between last year’s IMF Forum in Trinidad and Tobago, and the recent regional meeting of the Caribbean Growth Forum, here in the Bahamas, we reached a significant level of convergence on the most pressing tasks for sustainable growth and shared prosperity in the Caribbean. It is clear from yesterday’s discussions that there is a general consensus on the diagnosis and the challenges facing the Caribbean countries.

“I submit to you that the time to act is now. We should be mindful not to focus only on short term actions in response to immediate crisis at the expense of the long term shifts that are needed to change fundamentals. We have to do both!” Hasan Tuluy World Bank Vice President for Latin America and the Caribbean

Now that we know the what, the next step

dynamics, the Caribbean region’s GDP per

is to move to the how. How can we avoid a

capita increased six fold in the thirty years

reversal of past gains in poverty reduction and

since 1980s. This resulted in significant gains

shared prosperity - the ultimate objectives of

in poverty reduction. We know, for instance

a sustained and inclusive growth agenda? The

that in Jamaica, poverty rates dropped almost

key questions facing us today are: what are the

20 percent over two decades, resulting in a

concrete actions that would be both credible

growth of the middle class and improvement in

and forceful and that can be clearly targeted

the citizens’ quality of life and prospects for the

to achieve monitorable objectives? Can we

future.

commit to an agenda of actions for sustained growth while ensuring a strong safety net to

Challenging Circumstances

protect the vulnerable during the transition?

This progress didn’t come easy. It was achieved

What would we want to be able to say we have

while the region was experiencing important

achieved a year from now?

changes, some quite testing. The Honorable

Many visitors say time slows down when you

Prime Minister of St. Lucia mentioned how

are in the Caribbean. But if time for visitors

the WTO ruling ending trade preferences

seems slower, for citizens of the Caribbean it

for agriculture devastated the livelihoods of

has been moving right along. In the past four

hundreds of farmers. This forced the region to

decades, many people in the Caribbean have

look for alternative growth models, and initiated

benefitted from the region’s economic progress,

the transition of many Caribbean countries

improving their health, education, and standard

toward more service-oriented economies.

of living. While averages tend to mask important 10

SEPTEMBER 2013 | Business Journal

fundamentals, it will put pressure on exchange rates and international reserves especially for those countries with large current account deficits such as those in the Caribbean. Already, on a mere statement by the Fed Chairman, yields of sovereign bonds rose by 130 basis points in Belize and 40 basis points in the Dominican Republic. When QE ends, these adjustments are unlikely to be temporary. Rather, they will reflect a change in the long-term trend. The prospect of increasing cost of financing and The high income levels brought with them a

declining tail winds, will make a challenging

decline in official foreign assistance. Caribbean

situation even more so. Investors are also likely

countries took these changes in their stride and

to become more selective and focus on country

moved on to find newer sources of livelihood

fundamentals, rewarding those economies that

and prosperity.

are successful in implementing credible and

Todayâ&#x20AC;&#x2122;s world brings its own challenges as we have consistently heard in the previous sessions:

sustainable internal reforms. The

regionâ&#x20AC;&#x2122;s

macroeconomic

stability

significantly challenged from the outside. We

As Alejandro Werner and others described

heard from Professor Gregorio that openness

yesterday, the tail winds that boosted economic

is positive, and has brought benefits to the

growth in LAC are receding and perhaps turning

Caribbean

into head winds. Growth has been sluggish in

increased trade and access to financial markets.

Europe and, to a lesser extent, in the US. This

But it has also linked the Caribbean economies

has resulted in declining demand for goods

to those of the Western world, and more recently

and services, tourism in particular. In addition,

to China, making them more vulnerable to

growth in China and other emerging markets

global financial and economic turmoil.

is slowing down, thus reducing demand for

The

global

way

financial

foreign

crisis

investment,

exposed

the

commodities. While most Caribbean countries

fragility of the growth model in some Caribbean

are net commodity importers, this may have

countries. When the global financial crisis hit

a bearing on extractive and commodity based

five years ago, Caribbean nations lived through

economies, such as Trinidad and Tobago.

a major economic contraction. For instance,

Sooner or later, when the US Fed begins to

Jamaica and the OECS islands experienced

tapper QE, we need to get ready for the inevitable

contractions of -3.1% and -5.3% respectively

adjustment and rebalancing of the portfolios

in 2009.

away from developing countries toward the

were able to get by with a moderate slowdown

US. If we do not get ready today with strong

compared to their pre-crisis growth levels.

Only a few countries of the region

SEPTEMBER 2013 | Business Journal 11

Addressing the Regionâ&#x20AC;&#x2122;s Internal Risks and Structural Constraints I submit to you that the time to act is now. We need to be mindful not to focus only on short term actions in response to immediate crisis at the expense of the long term shifts that are needed to change fundamentals. We have to do both! Caribbean leaders have been clear of the internal challenges that stand in their way â&#x20AC;&#x201C; high costs of inputs and productive factors, weak fiscal positions, declining foreign Declining

negative

growth,

increasing

investment, limited access to financial markets,

unemployment and inadequate safety nets

insufficient access and quality of social safety

reversed some of the hard won social gains

nets, and youth marginalization due to lack of

as poverty levels increased.

opportunities.

[For example,

Jamaica poverty level went from 10 percent

These challenges have translated into a

in 2006 to 18 percent in 2010]. Lack of fiscal

major

debt

space meant that governments were not able to

countries as highlighted yesterday. There is little

cushion these declines with stimulus programs;

disagreement that the debt problem cannot be

and where they did, they did so at the cost of

addressed by a single policy.

further worsening primary balances and debt.

Working with governments and development

Today, on average, 40% of the population lives

partners,

in poverty in Caribbean countries (other than

Debt Framework, a balanced approach to

Haiti where the poverty headcount is 79%).

addressing the high debt burden in a fair way.

I share the concern of the Honorable Prime

The contributions of many actors, domestic and

Minister of the Bahamas: the young people of

foreign and private sector, public institutions,

the Caribbean bear a disproportionate burden

and civil society are needed to succeed.

problem

for

identified

many

Caribbean

Comprehensive

of these shortcomings. In Jamaica, for instance, 30% of young adults are unemployed. Additionally, Caribbean countries are highly exposed to natural and economic shocks. Hurricanes, volcanic eruptions, earthquakes, and

This framework focuses on four key areas: 1. Building a more sustainable growth model 2. Improving fiscal balances and public sector management,

tropical storms have caused major disruptions

3. Building resilience to natural disasters, and

and destroyed infrastructure in many countries.

4. Pursuing

These disasters, coupled with governmentsâ&#x20AC;&#x2122;

debt

restructuring

and

strengthening debt management.

limited resources to respond to shocks have disproportionately affected the poor and most

Going back to my opening question: what are

vulnerable.

the concrete credible actions that countries

SEPTEMBER 2013 | Business Journal

can take to find a lasting solution to the twin

of tomorrow? Clearly a strong primary and

problems of low growth and high debt?

secondary education system is key, though

Let me offer some areas for consideration:

work is needed to improve the quality and link

First, in the area of building a sustainable

education outcomes to employability.

growth model, as has been amply discussed, the

Second, much has been made of the fiscal

role of the private sector is critical, given their

consolidation challenge in the Caribbean. I share

impact on job creation and in turn increasing

your concerns about the pace and composition

access to opportunities for all. The CGF has

of fiscal consolidation; if not well designed could

outlined a detailed set of country specific

adversely affect growth prospects and hurt the

and regional reforms, improving logistics and

poor and vulnerable. A strong prioritization

connectivity, streamlining customs, tax reform,

framework

updating skills and improving access to finance.

expenditures, with respect to their contribution

Countries may want to get to work on this

to growth and their long term benefits as well as

right away dealing with the difficult challenges

their risks, would go a long way to ensure fiscal

which will take some time to bear fruit while

consolidation is done in a fair and sustainable

addressing some of the easier ones to secure

way.

quick wins. Clearly the issues of energy sector reform and

that

carefully

evaluates

public

This and my next point will be addressed in detail during today’s sessions.

infrastructure development will take time. But

Third, the area of disaster risk mitigation

progress can be made on developing the legal

continues to challenge us as the enormous

and institutional frameworks for public private

costs of disasters keep reversing gains made

partnerships, automating customs processes,

on debt sustainability.

and improving air connectivity and a single

The World Bank has partnered with countries

airspace – areas where solutions are readily

the

Eastern

Caribbean

strengthen

available and have been discussed often.

infrastructure through a series of projects.

Sustainable growth models will want to

(The World Bank currently has US$120 million

create new opportunities for inclusive growth by

planned for such investments in Grenada and

promoting entrepreneurship, enhancing access

St Vincent & the Grenadines St. Lucia and

to finance, and removing barriers that prevent

Dominica, half in soft loans and grants from the

SMEs to participate in their local economies. One

Climate Investment Fund).

area where this can be done is in the tourism

We have seen early successes in St Lucia for

sector, which is a main growth driver of many

instance, where such infrastructure investments

Caribbean economies.

allowed the country to withstand the passage

I often hear that today’s children need to be

of Hurricane Tomas in 2010.

prepared for jobs that do not even exist. We

Let me conclude by reiterating the World

need to create new opportunities for productive

Bank Group’s commitment to work with you

jobs. What can the Caribbean countries do

and our partners to find solutions to these

today to prepare their youth for the jobs

challenges.

SEPTEMBER 2013 | Business Journal 13

Prime Minister Kenny Anthony mentioned the

The challenges facing us are daunting and time

Caribbean Catastrophic Risk Insurance Facility

is of the essence.

(C-CRIF) spearheaded by the World Bank, and

gains of the past, secure the future for today’s

how it has changed the landscape for insurance

youth and give a chance to shared prosperity

solutions to deal with the impact of natural

in the Caribbean, we need a coordinated effort

disasters. Recently, we also changed our

to create a virtuous cycle of lower debt and

procurement practices to adjust to the realities

faster economic growth and shift the region’s

of small states. As the call for a well-articulated

economic outlook to a more sustainable path.

If we are to preserve the

growth agenda became louder, the World Bank

When we gather again next year in the

Group collaborated with the IDB and CDB, and

third Forum will we be able to report on

with the support of CIDA, the EU, DfID and

concrete achievements in the four pillars of

other donors, created the Caribbean Growth

the comprehensive debt framework? And more

Forum. After a year of intense dialogue, the

importantly, will the people of the region say

CGF has resulted in specific and homegrown

“finally we have turned the corner and are on a

action oriented agendas for a number of

path for shared prosperity?” I surely hope so.

Caribbean countries. We will be happy to bring

Distinguished Regional leaders, colleagues

our financial and analytical solutions to help you implement these agendas going forward.

and friends: Let’s act on a comprehensive sustainable regional growth paradigm... one that puts

Going Past the Diagnostic

people and shared prosperity at the center.

I began the speech with the question of whether Caribbean countries can sustain hard won

Hasan Tuluy spoke at the 2013 High Level

progress and avoid a reversal of past gains in

Caribbean Forum held at Nassau, Bahamas

today’s challenging global environment.

in mid-September

SEPTEMBER 2013 | Business Journal

The strength of Barbadian institutions and the resolve of Barbadians will see us through the crisis Op-ed article by Dr DeLisle Worrell, Governor of the Central Bank of Barbados Barbadians have every reason to be confident that we can cure

the

foreign

exchange

imbalance which has emerged in

the

last

three

months,

and revive the growth of our economy. First, we have the highest standard of living in the Caribbean, and we have earned

transforming

the economy and investing in infrastructure and human resources, over many decades. Figure 1 compares the Human Development Index (HDI) for

the value of peopleâ&#x20AC;&#x2122;s savings, and providing more predictable

Barbados with the rest of the

returns for investors. Fourthly, we have reserves which are more

Caribbean. The HDI is the

than sufficient to ride out the storm, as may be seen in Figure

best indicator of the quality

of life available for countries worldwide. Second, Barbados has strong institutions for decision making: our social partnership is the envy of countries worldwide; our

economic

systems

are

the

information equal

many industrial countries; our media are knowledgeable; and we have a strong mechanism for putting policy into effect. Thirdly, we have preserved the value of our dollar, protecting

SEPTEMBER 2013 | Business Journal 15

With

these

may

resources

confidently

the

challenges,

address which

are

twofold. The first is to balance foreign exchange inflows and outflows. Following the June 27th Economic Consultation, Government is in discussion with the social partners on measures that will be introduced to reduce the fiscal deficit. The required adjustment is considerable, about 4.5% of GDP, but not sufficient to cause major

social

disruption,

may be seen in Figure 3. The adjustment will protect the value of our currency, which is vital to Barbadosâ&#x20AC;&#x2122; economic prosperity. Figure 4 shows how the Caribbean have

countries

devalued

which

have

fared,

compared with those that have maintained

unchanged

value of their currency in terms of the US dollar. Economic

growth

the

second challenge. The social partners continue to pursue actions to revive the economy.

access to finance by small and

It is all about self-confidence.

Investment amounting to $2.3

medium enterprises. Labour

The

billion is in prospect for the

is charged with an urgent

what we must do to grow

foreign exchange sectors, and

need to improve productivity

the economy, and each and

Government

contemplates

and

every Barbadian must remind

infrastructure

every area of activity, so that

ourselves that we have the

and other projects. Initiatives

Barbados becomes a byword

power to contribute to our

are

for excellence in service.

future prosperity.

billion

underway

improve

SEPTEMBER 2013 | Business Journal

quality

service

social

partners

know

The

private

investment

is being stitched together in

to excellence. I am confident

projects that will grow the

meetings between Government

that we will each resolve to put

economy

the

and the other social partners.

our best efforts into playing

government infrastructure has

What remains is the piece that

our part in the revival of our

been identified, the financing

is up to each and every one of

economy, and to sustainable

is being put together, and

us, that is, to increase worker

economic

the fiscal correction package

productivity and commitment

future.

are

known,

growth

the

US no longer top market for Trinidad’s LNG For the first time in 12 years, the United States

Latin America, Europe and Asia.

is no longer the top export market for LNG

“In this regard, for the first time since

from Trinidad and Tobago which has turned

Trinidad and Tobago began exporting LNG,

to the spot market after battling low Henry Hub prices and growing production of Shale gas. Trinidad

and

the United States has been replaced as this country’s leading LNG export destination, falling to

Tobago’s

fourth place,” according to

major markets for LNG are

Spain,

Chile

the document.

and

In the seven month

Argentina. During period

period the

LNG

United

and

Tobago

Trinidad

2012

exported 435.2 trillion

October exports States

review,

fiscal

to April 2013, the share of

under

fell

to to

the 13.6

percent from 19.4 percent in the corresponding 2011/2012 period, according to the government’s Review of the Economy 2013 released Tuesday. “The growing abundance of domestic gas supplies in the US and consequent

British (BTU)

Thermal of

LNG

Units to

countries, representing a 6.9 percent increase from the 407.2 trillion BTU exported a year earlier. During the review period, LNG exports to Chile, Argentina and Spain accounted for 18.1 percent, 15.6 percent, and 14.5 percent respectively of total LNG exports.

unattractive Henry Hub prices over the past

This marked an improvement from their

few years, have given momentum to Trinidad

respective shares of 13.8 percent, 15.5

and Tobago’s use of the international spot

percent and 12.7 percent in the corresponding

market to earn higher natural gas prices in

2011/2012 period.

SEPTEMBER 2013 | Business Journal 17

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Photo News Jamaican Prime Minister visits China

Jamaica’s Prime Minister, Portia Simpson Miller (second, left) in discussion with Chairman of the National People’s Congress, Zhang Deijang during a meeting at the Great Hall of the People in Beijing, China on August 22, 2013.

Jamaican Prime Minister, Portia Simpson Miller led a delegation on an official visit to the People’s Republic of China during August 20th – 25th August, 2013. She held separate meetings with the President of the People’s Republic of China, President Xi Jinping, the Premier, Premier Li Keqiang and the Chairman of the National Congress, Chairman Zhang Dejiang. “At all of these meetings, relations were most cordial, with a full appreciation on both sides of the strong ties between the two countries, through migration, international cooperation, history, trade and investment. Jamaica’s unwavering commitment to the “One China Policy” was a common feature during these meetings,” Ms. Simpson Miller told the Jamaican Parliament.

SEPTEMBER 2013 | Business Journal 19

Young Males in Latin America & the Caribbean lag behind rest of population in longevity With the exception of young men, most people in Latin America and the Caribbean are living much longer today than 40 years ago. The mortality rate has dropped by at least 80 percent for children 4 years old or younger and by more than 50 percent for women between the ages of 20 and 44. For men between the ages of 15 and 19, however, the mortality rate has increased by 1 percent, largely due to deaths from road injuries and rising violence. These are some of the findings released by the World Bank Group and the Institute for Health Metrics and Evaluation (IHME) in a new report, The Global Burden of Disease: Generating Evidence, Guiding Policy. Latin America and Caribbean Regional Edition. The report also highlights the fact that the Latin America and Caribbean region (LAC) faces increasing threats from chronic disease, violence, and road traffic injuries. In the region, health loss from heart disease

Click on image to access full report

grew by 36 percent between 1990 and 2010, while interpersonal violence, depression and

maternal, nutritional, and newborn diseases

low back pain grew by 35, 40 and 57 percent,

are becoming less important in LAC as non-

respectively.

communicable

The report is based on the Global Burden

diseases

kill

people

prematurely and cause increasing disability.

of Diseases, Injuries, and Risk Factors Study

â&#x20AC;&#x153;The rapid shifts in disease burden place poor

2010 (GBD 2010), a collaborative effort of

people in low- and middle-income countries at

researchers from 50 countries around the world

high risk of not having access to appropriate

led by IHME at the University of Washington

services and incurring payments for health

in the United States and supported by the Bill

care that push them deeper into poverty,â&#x20AC;? said

& Melinda Gates Foundation. The report finds

Timothy Evans, Director of Health, Nutrition,

that, similar to global trends, communicable,

and Population at the World Bank Group.

SEPTEMBER 2013 | Business Journal

“The data in these new reports are critical

“While the region has made great progress

inputs to the efforts of policymakers in countries

fighting

towards universal health coverage that aim to

children’s lives, many of these same children,

improve the health of their people, communities,

particularly males, die violent deaths when they

and economies.”

reach adulthood,” said Rafael Lozano, Director

The report details preventable risk factors

infectious

and disability in the region. These include dietary risks, which include not eating enough fruit, whole grains, nuts and seeds, and eating too much salt. Improving Latin

Americans’

diets

could substantially reduce ischemic

heart

disease,

stroke, and diabetes, as well as colon and rectal cancers. “Health

care

providers

in Latin America and the

and

saving

of Latin American and Caribbean Initiatives at

that account for a substantial amount of premature death

diseases

IHME and a lead author on

“While the region has made great progress fighting infectious diseases and saving children’s lives, many of these same children, particularly males, die violent deaths when they reach adulthood.”

Caribbean are seeing very

the study. “Lack of economic opportunities

coupled

with

easy access to guns has helped make violence the number one cause of health loss in countries such as Venezuela, Honduras, and El Salvador.” Among

countries

the

region, the leading causes of disease burden were as diverse as HIV/AIDS in Belize and

Jamaica,

diabetes

Dominica and Mexico, and ischemic

heart

disease,

coronary artery disease, in Cuba, Costa Rica, and the

different problems today than they did 20 years

Dominican Republic. When comparing rates

ago,” said Dr. Christopher Murray, IHME Director

of diseases and injuries across countries and

and one of the lead authors on the study.

taking into account differences in population

“Data on potentially avoidable causes of health

growth and ages, Costa Rica, Cuba, and Chile

loss, or risk factors, can help policymakers

performed best while Guatemala, Guyana, and

and donors prioritize prevention strategies to

Haiti performed the worst.

achieve maximum health gains.”

SEPTEMBER 2013 | Business Journal 21

Photo News OAS Reiterates Commitment to Development of Haiti

From left to right: Albert R. Ramdin, OAS Assistant Secretary General and Laurent Lamothe, Prime Minister of Haiti. Credit: OAS

The Organization of American States (OAS)

During the meeting with Assistant Secretary

reiterated its commitment to the development

General Ramdin, President Martelly elaborated

of Haiti with the recent visit of OAS Assistant

on the request.

Secretary General Albert Ramdin to the country. Assistant Secretary General Ramdin arrived

The

OAS

official

Organization’s

reiterated

continued

support

the of

democracy in Haiti.

for meetings with President Michel Martelly,

Among the areas of upcoming collaboration

Prime Minister Laurent Lamothe, President

between the OAS and the Government of Haiti

of the Electoral College (CTCEP) Emmanuel

is the facilitation of a major conference for the

Ménard, the Presidential Advisory Council

Government of Haiti to present its Investment

for Economic Growth and Investment, inter-

Master Plan to key international investors

American agencies in Haiti, MINUSTAH Head

and

and Special Representative of the United

community. The Government’s presentation

Nations in Haiti Sandra Honore, and others,

is expected to focus on investment options in

during a 30-hour visit to the OAS member

tourism, textile manufacturing, infrastructure,

state.

and other areas.

The Government of Haiti had written to the OAS requesting a mission to assess the electoral process in the country.

SEPTEMBER 2013 | Business Journal

stakeholders

from

the

international

n n n n n n

The European sovereign debt crisis - past, present and future Speech by Dr. Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank, to participants of the GMAP of Fletcher School, Berlin, 26 August 2013.

On 25 March 2010, Jean-Claude Juncker, the Presient of the Eurogroup, made a statement on

Greece.

following

This

words:

statement “As

part

included of

the

package

involving substantial International Monetary Fund financing and a majority of European financing, euro-area member states are ready to contribute to coordinated bilateral loans.”

Dr. Andreas Dombret

That sounds somewhat long-winded. Put simply, it means that the euro-area heads of

Looking back: the causes of the sovereign

state and government were ready to support

debt crisis

Greece financially. That statement could be seen as the official start of the sovereign debt

There are a very large number of angles from

crisis in the euro area, the “starting shot” so to

which it is possible to look at such a complex

speak.

phenomenon as the sovereign debt crisis. And

It wasn’t of course the real start. The crisis

depending on the angle, it is possible to tell

was not something that happened suddenly,

somewhat a different story. The core elements

but rather the end of a long road. And the road

of those stories are always the same, however.

leading out of the crisis is just as long. It is just

We can find them at both the national and the

as long, but much more arduous, particularly

European levels.

for those countries which are directly affected by the crisis.

Let us first take a look at the national level; in other words, the countries themselves. Following

And everyone agrees on where the road

the introduction of the euro, a large amount

should lead: a stable monetary union. What is

of capital flowed into the countries which are

controversial, however, is what road we have to

now at the centre of the crisis such as Greece,

take in order to arrive at that destination.

Ireland, Portugal, Spain and Cyprus. First of

In order to recognise the direction in which

all, that is economically plausible: capital flows

we have to go, we should first look at where

from highly developed countries into countries

we have come from. Let us therefore look back

that are catching up economically.

at the road that led us into the crisis, at its causes. 24

SEPTEMBER 2013 | Business Journal

In our case, however, the inflowing capital did not finance a sound catching-up process.

is a matter for the national policymakers – each country decides itself on its own government revenues and expenditures. Given such an imbalance of responsibilities, the individual countries have incentives to borrow. You see, the costs of borrowing are spread across all the member states of the monetary union – for example, by means of a higher interest rate level for all of them. This incentive to borrow, this “deficit bias”, was also recognised by the founders of the monetary union. In order to reduce it, they did two things. Instead, it financed house price bubbles in some

First, they created explicit rules on borrowing

countries – such as Ireland and Spain. Elsewhere,

in the form of the Stability and Growth Pact.

it funded excessive government consumption

is Pact was intended to keep a tight check on

– for example, in Greece. The inflowing capital

national fiscal policies.

did not fund sound growth: instead, it masked

Second, the founders of monetary union

an existing lack of competitiveness and, in fact,

incorporated the “no bail-out” principle into the

made it even worse. And it was precisely these

Maastricht Treaty: no euro-area country was

structural problems that were the breeding

to be liable for the debts of another member

ground for the crisis.

state. Thus, individual responsibility was to be

BIS central bankers’ speeches

the guiding principle for fiscal policy in the monetary union. Each country was itself to bear

What was the situation at the European

the consequences of its own fiscal policy.

level? Here, it was mainly shortcomings in the

These rules were intended to keep borrowing

framework of monetary union that laid the

by the euro-area countries within reasonable

ground for the crisis.

limits. But rules were not the only means of

In order to understand these shortcomings,

achieving this. The financial market actors, too,

it is important to know the particular features

were to ensure that that the euro-area countries

of monetary union. The European monetary

did not incur excessive debt.

union is special because it combines a single monetary policy with national fiscal policies.

The idea behind this is simple: if a country were to become excessively indebted, it would

The monetary policy for the 17 countries

only be able to borrow on the financial markets

of the euro area is decided by the Governing

in future at very high rates of interest. This

Council of the ECB in Frankfurt. However, the

means that the country in question would have

fiscal policies of the 17 members of the euro area

to reduce its debt to a sustainable level. SEPTEMBER 2013 | Business Journal 25

Yet, neither of these two safeguards worked.

Neither the rescue packages nor monetary policy

Neither the discipline of the financial markets

can remedy the basic underlying problems that

nor the rules were able to prevent individual

I have just mentioned.

countries running up excessive debt. Investors on the financial markets tolerated

Looking forward: ways out of the sovereign debt crisis

the problems of individual countries for far too long. At the same time, policymakers stretched and sometimes ignored the rules of the Stability

In order to achieve that, three things are

and Growth Pact.

necessary. First, government finances have to

And then, in 2008, came the global financial

be put back in order; second, competitiveness

crisis. Many countries had to rescue their

has to be improved; third, the framework of

banking systems and support economic activity.

monetary union has to be strengthened. Let us

And that dramatically drove up their levels of

look at these three necessities in more detail.

sovereign debt. And, suddenly, the investors on the financial

Budget consolidation and structural

markets seemed to become aware of the problems

reforms

which some countries were experiencing. Now they saw the high level of sovereign debt, the

Many euro-area countries have very high

lack of competitiveness and the risk of contagion

levels of sovereign debt. In Greece at the end

effects between the individual countries. In

of 2012, it was roughly one and a half times

short: they lost confidence in the crisis-hit

annual economic output. And in other member

countries. But this also meant that capital flows

states, too, sovereign debt is well above annual

dried up â&#x20AC;&#x201C; the capital flows that had previously

economic

covered up the problems.

reducing government debt appears to be an

And that brings us to the statement by the

output.

Against

that

backdrop,

urgent necessity.

Eurogroup that I quoted when I began my

The associated course of fiscal consolidation

speech. In order to safeguard financial stability

has come in for some criticism, however. It is

in the monetary union as a whole, rescue

argued that, especially in a crisis, too many

packages were set up first for Greece, then

austerity measures place an unnecessary drag

for Ireland, Portugal, for the Spanish banking

on the economy. However, a distinction has to

system and, finally, for Cyprus.

be made at this point: in the long term, sound

At the same time, central banks took various

government finances are good for the economy

non-standard measures in order to stabilise the

â&#x20AC;&#x201C; no-one disputes that. In the same way, noone

situation â&#x20AC;&#x201C; I shall return to this point later. In an

disputes that austerity measures can dampen

exceptional crisis, taking exceptional measures

economic activity in the short term.

is undoubtedly the right thing to do. However, looking to the future, neither course can provide a permanent solution to the crisis.

SEPTEMBER 2013 | Business Journal

But we should look beyond the present moment and, above all, not confuse cause and effect.

What triggered the crisis was the very fact that

A better architecture for the

governments were no longer able to borrow

monetary union

on the markets because they had already accumulated excessive levels of debt.

However, if we want a stable monetary union, it

Saving is essential in order to regain the

will not be enough to eliminate the problems at

confidence of the markets. That is the only way

the national level alone. We also have to improve

to eliminate the financing problems.

the architecture of the monetary union.

By the way, according to a survey by the Pew Research Center, in many countries a majority of the general public is in favour of fiscal consolidation – 81% in France, 67% in Spain, 59% in Italy, and 67% in Germany.

I cited the central weakness at the start of my speech: the imbalance between a monetary policy conducted at the European level and fiscal policies conducted at the national level. Basically, there are two ways to realign this

On one point, the critics are right, however:

imbalance: either the European level gains

saving is not enough on its own, it is only part

certain control rights over national budgets –

of the necessary structural reforms.

which would mean a deeper political integration.

And that brings us to the second thing that is

Or we leave control of fiscal policy at the national

needed. Not only do the countries have to put

level. But then the national level also has to

their government finances in order, they have

assume liability for its policies – that would

to reform their national economies so that they

mean strengthening the Maastricht framework.

become competitive again.

The first course would amount to what is

There is no ready-made solution for this;

known as a fiscal union. But that would depend

each country needs different reforms. There is

on the countries of the euro area transferring

one common denominator, however. The labour

national sovereignty to the European level –

markets have to be made more flexible. Flexible

for example, by giving the European level the

labour markets help enterprises to adapt

right to intervene in the case of unsound public

quickly to changing conditions. This is not only

finances.

important in crises; it also promotes the overall pace of economic growth. All these reforms are painful and arduous. But

Giving up sovereignty in this way would be a radical change and require wide-ranging legislative

changes

nationally

and

the

they are indispensable and we are seeing initial

European level. More than anything, such

signs of success. Ireland has already improved

changes would need the support not only of

its competitiveness. Spain, too, has undertaken

policymakers but also of the general public.

significant structural reforms and made good

And, on this point, we should be realistic. It is

progress in reducing its current account deficit.

not possible to identify any willingness to do

It will now be important for the governments to

that at present – not in Germany or in any other

maintain that course.

country of the euro area.

SEPTEMBER 2013 | Business Journal 27

This just leaves the second course of action:

Joint supervision would allow banks everywhere

that is, an improved Maastricht framework,

to be supervised according to the same high

a “Maastricht 2.0”. Among other things, that

standards. It would also make it possible to

means strengthening the rules on borrowing

take better account of cross-border effects.

– the Stability and Growth Pact not only needs

But all of that cannot entirely rule out the

teeth, it also has to be able to bite. The rules

possibility of bank failure. And that is a good

have since been tightened – now they have to

thing. After all, the risk of corporate failure is a

be applied and complied with.

core element of the market economy.

A “Maastricht 2.0” would also mean taking

Therefore, measures have to be taken to

the no bail-out principle more seriously again.

ensure that banks can fail without placing a

But that calls for the possibility of sovereign

strain on government finances. And this is where

default as the ultimate logical conclusion of

the second element of the banking union comes

individual

defaults

into play: a single resolution and restructuring

have to be possible without destabilising the

mechanism for banks. And that, too, is under

financial system of the euro area as a whole.

development at present.

responsibility.

Sovereign

Properly equipped, the banking union is thus The banking union as part of a better

a key component of a stable monetary union.

architecture

With the banking union, government finances will be better protected in the future against

And that is an important point, because the

crises in the banking sector.

close link between government finances and

But we have to break through the vicious

the financial system was a major element of

circle from another direction, too. We also have

the crisis.

to protect banks from government finances

Basically, this is very much a vicious circle: if

running into difficulties.

public finances run into difficulties, the banks are

One of the most important measures in this

put under strain– if the banks hold government

respect concerns banking regulation. Banks

bonds on their balance sheets, for example.

should back government bonds with capital that

Conversely, if banks run into difficulties, public

corresponds to their risk.

finances are put under strain. Take the example

For one thing, this would strengthen the

of Ireland: in order to save its banking sector,

market mechanism: banks would have an

Ireland ran up a budget deficit amounting to

incentive to demand appropriate risk premiums

30% of its economic output in 2010.

for government bonds. That, in turn, would be

There are various approaches to breaking

an important market signal for governments.

through this vicious circle. One of them is the

For another, it would also create a buffer

planned European banking union.

protecting banks against a government running

The banking union consists of two elements. One element is joint banking supervision for large banks, the Single Supervisory Mechanism.

SEPTEMBER 2013 | Business Journal

into financial difficulties and its bonds losing value.

The role of monetary policy

All that monetary policymakers have done so far has bought time for governments to solve

I believe one thing has become clear. The

the crisis. It is now up to governments to use

crisis cannot be easily resolved just like that

that time, because monetary policy measures

– there is no magic formula for solving all the

are not without risks and side effects. We should

problems at one stroke. Instead, we need

be aware of that.

reforms at many different levels. We are Conclusion

undoubtedly making progress, but we have not yet reached our destination. Travelling the rest of the way will certainly

I would therefore like to stress once more

not be easy. Nevertheless, policymakers must

how important it is for the reforms in Europe

not give in to the temptation of taking what they

to go ahead. Undertaking the necessary

think is a convenient shortcut. And that brings

political steps is the only way to achieve

me to the last point in my speech: monetary

our common goals of a stable monetary

policy.

union and a stable euro.

Monetary policy has already played a big part

And the economic advantages of a

in helping to contain the crisis. But it cannot

single currency will benefit all the member

resolve the crisis – everyone is in agreement

states – including Germany. Of course, it is

on that. And, with the measures taken so far,

extremely difficult to put an exact figure on

it has already ventured far into unknown and

the concrete benefit. However, the people

dangerous territory.

seem to understand to what extent they

It is no secret that the Bundesbank takes a

critical

view

the

ECB’s

benefit from the euro.

government

According to a recent poll by the forsa

bond purchase programmes in particular. If

Institute nearly 70% of the Germans favour

Eurosystem central banks buy government

the euro.

bonds issued by countries with poor credit

But we should not think about the euro

ratings, the risks of an unsound national fiscal

only in economic categories. As long ago as

policy will be spread across all the euro-area

1950, the French economist Jacques Rueff

states.

noted that Europe will be made though the

But only elected parliaments should decide on

currency or not at all.

such a redistribution of risks, not independent

The euro is not only an economic project.

central banks. And that is more than a problem

It is also a political project. It is an important

concerning the theory of democracy. It might

building block of a united Europe. Not least

indeed also be a temptation to call central bank

for that reason, it is something that is worth

independence into question. And that would be

fighting for.

disastrous in terms of central banks’ ability to safeguard price stability.

SEPTEMBER 2013 | Business Journal 29

Ambassador Roberto Azevêdo of Brazil took the helm of the WTO on 1 September 2013 as the sixth Director-General Statement by Roberto Azevêdo, Direcor-General to the WTO General Council We meet today at a crucial moment.

I’m

honoured

be speaking to you as your Director-General. As

far

critical moments go, we have to figure out new ways of saying it. We’ve been saying we are at a critical moment, at a difficult juncture, on the brink — we have all those

wto.org

expressions that we have been using for a long time — every meeting that I go to, I try to

The multilateral trading system

our path together. The strength

figure out a different way of

remains

defence

of the Organization is found

saying it, but at the end of

against protectionism and the

in you. It is you that hold the

the day, this is true. The world

strongest force for growth,

wheel of the ship.

economy is in a very difficult

recovery and development.

moment, it is in flux.

the

best

Yet, as I take on this role,

I have also met with the Secretariat to deliver a similar

Many economies, developed

it is clear that the system is in

message.

economies in particular are

trouble. Progress has stalled.

recognises

still struggling to recover from

I pledge that I will do all I can

of the human factor and the

the effects of the financial

to rebuild trust and faith in

power of teamwork. I assured

crisis. Other issues continue

this organisation and in the

them

to emerge, and they keep

multilateral trading system. I

closely with them, including

changing the way that we do

will spare no efforts to restore

on various pressing issues of

things, fundamentally shifting

our ability to deliver on that

management. My work with

the landscape of the world

vital mission of supporting

them will not lose sight of the

economy.

growth

development

main objective which is to

challenges of development are

around the world. But this is

ensure that the WTO remains

still huge. In these changing

not something I can do alone.

a centre of excellence, at the

times, I believe that the role

We have options for the path

forefront

organisations

we play here in the WTO is

ahead:

servicing

the

international

even more important.

direction, but we must choose

Meanwhile,

the

SEPTEMBER 2013 | Business Journal

and

can

suggest

the

that

community.

message

that

prominence

would

work

I will be an inclusive Director-

our progress on Doha. That is

multilateral trading system is

General, working closely with

the reality. And the perception

at stake. And if the system is

everyone — from the Geneva

in the world is that we have

not working, then, in the end,

representatives to ministers;

forgotten how to negotiate. The

everybody loses. Those who

from the secretariat to wider

perception is ineffectiveness.

lose most are the smallest and

stakeholders, from the smallest

The perception is paralysis.

most vulnerable economies.

to the largest delegations. I

Our failure to address this

We have a duty to deliver for

will also have transparency

paralysis

them.

as a fundamental yardstick

which goes well beyond the

The world will not wait for

in all areas of work, also in

negotiating arm, and it covers

the WTO indefinitely. It will

administrative matters.

every other part of our work.

move on. And it will move on

It is essential that we breathe

with choices that will not be

new

negotiations.

as inclusive or efficient as the

system, and to ensure that it

We must send a clear and

deals negotiated within these

is responsive to the needs of

unequivocal message to the

walls. This is the message I

the entire membership and of

world that the WTO can deliver

took to the G20 Leaders in St.

an evolving global economy.

multilateral trade deals.

Petersburg last week. Those

We to

fix

must and

work

together

strengthen

the

life

casts

into

shadow

And if we are going to be

That’s why success at the

successful, we must be honest

Bali Ministerial Conference is

backing to our efforts to reach

about the problems we face.

vital — this has to be our first

a deal in Bali. I will be reaching

priority. Success in Bali would

out to other groupings in the

struggling. We all know that

bring huge benefits, improving

period ahead and I will be

this is just one part of the

people’s lives, including for

asking for their support as

work that we do here. We all

the poorest amongst us, and

well.

know that. But the WTO, as

boosting trade at a critical

we know, has been defined by

moment

what we have been doing in

economy. I won’t rehearse

must continue to strengthen

the negotiating front. This is

the benefits here. But I will

the

how the world sees us. There

say this: while the benefits of

monitoring functions of the

is no escaping that. It doesn’t

success would be great, the

WTO

matter how much we say that

consequences of failure would

against

we do more than negotiate,

be even greater. It would

is one of the most important

that we have a number of

strengthen current negative

aspects

other things going on here,

perceptions, setting us back in

dispute settlement mechanism

which are extremely important

all areas of our work. Our ability

is under heavy demand.

to the world even though the

to respond to the demands

This is yet another sign of

world doesn’t know it.

of an ever-changing world is

the importance of the WTO

under threat. The future of the

system in uncertain times.

Our

negotiating

arm

People only see us as good as

for

the

global

Leaders

gave

their

strong

Of course the WTO has other

priorities

too.

implementation to

maintain

our

and

vigilance

protectionism. of

This

work.

The

SEPTEMBER 2013 | Business Journal 31

It is a key part of the system,

a viable path forward on Doha.

will be away from Geneva only

so we must make sure that it

We need to start this now.

when strictly necessary. My

works well and that it works for

everyone,

including

for

the poorest. Aid for Trade

So how are we going to go about this?

full priority will be to ensure that we achieve a successfully

First, I am going to be

and the Enhanced Integrated

transparent,

Framework

inclusive. This will be a key

strengthened and improved.

part of how we move forward.

Let me assure you this: I

As we work towards Bali, I will

success in Bali. Time is short.

understand the importance of

be doing everything I can to

Our work must start here

all of the organisation’s key

ensure that all Members are

and now. That’s why I will

functions and I will not lose

involved and that all voices

sight of any of them. But today

are heard. I recognise that

consultations with members

we must focus on the here and

Members

immediately, starting

now. We must look towards

affected

different

week. So be ready. This will

delivering on our first priority:

issues on the table. I will, of

be in a variety of formats and

Bali.

course, calibrate our efforts

configurations at Ambassador

Success in Bali will be a

and consultations accordingly.

level. We will focus on the

boost to everything we do,

But, whatever path we follow,

three

allowing us to make progress

I will want to hear from you.

facilitation, development and

across the board. A successful

My door will always be open to

some elements of agriculture.

9th Ministerial Conference will

you — and so will the doors of

My intention is to have a

give us back the confidence

my entire team.

rolling set of meetings, giving

must

also

open

are by

not the

and

negotiated outcome in our 9th

equally

Ministerial. Second, I want to set out clear

process

commencing

key

areas

deliver

intensive

this

trade

that we are on the right track.

As you know, I have already

the opportunity for everyone’s

But Bali is not the end of the

announced the appointment of

voice to be heard across all

road. Delivering on Doha has

my Deputy Directors-General.

these issues. There will also be

to be a part of any future

They are trade professionals.

regular TNC meetings, which I

agenda. We need to discuss

They are familiar to all of you.

will convene as necessary.

some

contentious

They will serve the membership

We need to bring the three

issues that have divided us

and will help advance our

Bali elements together now.

for so long. We must look with

shared aims. I am grateful that

They must move simultaneously

fresh eyes at possible options.

they have agreed to join us. As

I have ideas about how we

I told you in my presentation

process. We need to tackle

can do this — but before we

to this General Council last

the difficult issues to identify,

discuss the wider agenda we

January, I will be a hands-on

early in the process, where

must restore trust among us

DG. I will roll up my sleeves

the possible trade-offs may

and confidence that we can

and I will be by your side at the

lie. And we must constantly be

deliver agreements and build

table. Between now and Bali, I

reviewing progress.

the

SEPTEMBER 2013 | Business Journal

our

so-called

horizontal

Many of the big issues that

I say again: time is short.

We must be committed to

divide us are political. As time

There are just 84 days until

deliver a deal before we get on

is limited I also want to start

the

Conference.

the plane to Bali. It is vital that

getting capitals more involved

All aspects of this work must

we succeed. All of us need the

in order to overcome impasses,

start to deliver results quickly.

WTO. Ordinary people need

to narrow gaps and to move us

Flexibility will be key. I know

it too even though they don’t

closer towards an agreement.

that as trade negotiators we

know it.

Senior officials must be ready

are always tempted to the last

to come to Geneva at certain

drop of blood. That’s what we

judge

junctures over the next few

do. But that cannot be the case

the

weeks.

here — we must all be ready to

to people’s lives. I believe

live with some compromises.

that the multilateral trading

Since I took office I have already had the opportunity

Ministerial

We the

cannot bigger

lose picture.

Ultimately our

should

performance

difference

make

sight

system can be the preeminent

to speak to a number of

force supporting growth and

Leaders and Ministers both

should always remember the

development in the world —

in St Petersburg and on the

consequences of failure and

lifting people out of poverty,

phone. I will continue to reach

that it would set us back in all

improving

out to others as well. The

areas of our work, undermining

and helping to put the global

development component will

the WTO, and compounding the

economy back on track. We

be vital in this process, and I

sense that we can’t negotiate.

have a unique opportunity to

will be listening closely to the

Some capitals are already

restore the WTO to its proper

standards

developing and to the least

looking

towards

place at the heart of this

developed countries to make