Targeting economic growth of the Caribbean through Aid for Trade interventions
The idea that economic austerity alone will not resolve systemic challenges or maximize new trade opportunities in areas such as green growth, niche tourism, creative economy or global diasporas is becoming more common, according to Keith Nurse, Executive Director of the UWI Consulting Company, University of the West Indies. Enabling developing countries to participate in global value chains (GVCs), particularly through Aid for Trade (AfT) mechanisms, is the key to stimulating global economic growth.
During his presentation on ‘Enhancing trade-related technical assistance to the Caribbean’ on 14 February, Mr. Nurse discussed priority sectors that have strong export and economic development potential, as well as constructive approaches and entry points for trade support agencies within the Caribbean context.
Representatives of eight permanent missions from Caribbean countries attended the Friday Noon series presentation, hosted by the International Trade Centre (ITC).
The first topic of discussion was the decline of the Caribbean share of world trade, which had started before the 2008–2009 global economic crisis. One of the main reasons for the Caribbean’s decline in global competitiveness over the past three decades was the region’s reliance on the lower level of export diversification, mainly agricultural and resource-based commodities and low value-added manufacturing goods and services.
The presentation examined how from 2009–2012, the Caribbean experienced a shift in exporting sectors, with a high dependence on traditional low-value added products, and even more dependency on primary and resource-based exports, along with a decline in manufacturing.
Dr. Nurse questioned whether AfT programmes, as currently configured, were the right instruments to address the weak participation of developing countries in global trade and global value chains, and whether too much of the AfT funding was going to training activities and new processes, rather than to investment and innovation. He argued that more funding is needed for enterprise development and specialized training.
Participants at the presentation heard that current challenges were based on a lack of integration of AfT projects with national and regional development agendas; weak donor coordination; the absence of benchmarking and consideration of the implications on the private sector. Another challenge was the lack of sustainable mechanisms to track outcomes and learn from the impact of AfT interventions.
Mr. Nurse concluded by recommending that a regional agency be appointed in the Caribbean to be in charge of monitoring and evaluating AfT interventions; that value-addition be deepened in key sectors such as tourism and manufacturing, and that the level of foreign exchange exposure be reduced.
Following the presentation, members of the ITC Office for Latin America and the Caribbean met with mission representatives for continued discussions about ITC’s strategic approach to the Caribbean.
For more information, watch Mr. Nurse’s presentation.
Access the PDF version of the book Challenges and Opportunities: Case Studies Presented by WTO Chair Holders, to which Mr. Nurse contributed a chapter on ‘Aid for Trade and export diversification: the case of Barbados’. The book brings together contributions from the 14 World Trade Organization (WTO) chair-holders of the first phase of the WTO Chair Programme (2010–2014). Launched on 11 February 2014, the book is divided into four sections, focusing on export diversification, the role of non-tariff measures, the rule of law in connecting to global markets, and the role of the Aid for Trade initiative in building trade capacity and overcoming supply-side constraints.
Mr. Nurse also produced a documentary film called Forward Home: The Power of the Caribbean Diaspora (2011). It was shot in nine countries, revealing the economic power of the people of the Caribbean Diaspora living in global cities and the significance of their contribution to their homeland, as travellers and entrepreneurs.