CDB Governor Points Way to Regional Revival

President of the Caribbean Development Bank (CDB) Dr. Hyginus “Gene” Leon has proposed a West Indian-centred model of development to revive Caribbean economies post COVID-19.

While lamenting the persistent challenges that issues like climate change and natural disasters pose to countries, he said what was needed was a resilience model that tapped into the intellectual and human capital of the people of the region, with particular focus on innovation, entrepreneurship, and technology.

Key to achieving that vision would be the completion of the CARICOM Single Market and Economy where one of the significant components, trade integration, “remains a hybrid and incomplete state”, according to Dr. Leon.

He outlined the measures and his vision during his delivery of the inaugural Distinguished Owen Arthur Memorial Lecture entitled, “Re-designing Economic Growth Strategies” on 8 September 2021.

The signature event, held in honour of the country’s longest serving prime minister, regionalist and respected economist, was co-hosted by the Shridath

Ramphal Centre for International Trade Law, Policy

and Services (SRC) and the CDB.

With 35 years of experience in economics, financial policy development and executive management, Dr. Leon said the sustainable development approach should meet the current needs of states without hindering the ability of future generations to meet theirs.

“It is vital that policies implemented for short-term recovery effort be consonant with the policies required for a transformative long-term vision to avoid the conflict of a short-term policy fix becoming a challenge for a long-term necessity.”

The CDB President reported that the economies of borrowing member countries were struggling. The majority contracted in 2020 while there was an increase in the average debt-to-GDP ratio.

Against this backdrop, he projected “significant scarring” from the current pandemic and noted the lengthy time taken for regional states to bounce back after global economic crises, such as what occurred in 2008.

Despite this, the economist was optimistic about the prospects for recovery and expressed confidence that the new economic paradigm envisioned by the late Arthur could be achieved.

Given the importance of innovation, he posited that institutions needed to look beyond the traditional science and technology-based concept to embrace experiential learning.

“I see a post-COVID Caribbean region that is driven by knowledge and innovation, which leverages diagnostics obtained from knowledge accumulation and transforms knowledge diagnostics into strategies for economic diversification of products and markets – what I have labelled the KIDS process. We can label this the industrialisation of knowledge, creating viable economic opportunities across all segments of the knowledge-creating value chain. These innovations will be most effective if anchored on building resilience and directed to realise the notion that regional integration can be both a conduit and a driver.

“Knowledge combined with innovation increases our chances to react to changes, positive and negative, and to discover new opportunities. This becomes the basis on which we can contemplate the new paradigm which Arthur envisioned. It is the basis through which we can create products, markets, and industries that can drive nimbleness and agility, promote opportunities for economic diversification, and leverage our lack of comparative disadvantage in knowledge creation; in essence, promoting the industrialisation of knowledge.”

Dr. Leon said intellectual assets, supported by technology, have the potential to create a competitive and comparative advantage. To facilitate this, he suggested that policies be put in place at the national level to sustain innovative product and process development. Additionally, he explained, “Tapping into external change agencies is indeed the most meaningful way for small economies to spur technological change. Channels such as foreign direct investment, trade, and strategic partnerships can facilitate the transfer of knowledge and access to the latest innovations. This exchange is critical as the competitiveness of regional economic agents hinges on their ability to meaningfully integrate into value chains regionally and globally.”

On the issue of intellectual property rights, he said this area has the potential to drive growth once it is given the necessary support and protection.

The event was also addressed by Minister in the Ministry of Foreign Affairs and Foreign Trade, Senator Dr. Jerome Walcott; UWI Vice-Chancellor, Professor Sir Hilary Beckles; Pro-Vice Chancellor and Principal of Cave Hill Campus, Professor Clive Landis; and SRC Director, Dr. Jan Yves Remy.

All speakers paid homage to the contributions of Professor Arthur who passed away in 2020 at the age of 70. Appreciative remarks were delivered by his widow, Julie Arthur. l