Caribbean Trade Law and Development

Year: 2016

  • Ranking Caribbean Countries’ Competitiveness: WEF Global Competitiveness Index 2016-2017

    business-561388_960_720Alicia Nicholls

    A few days ago, the World Economic Forum (WEF) released its Global Competitiveness Report 2016-2017. Two things immediately struck me as I perused the list of 138 economies which made the GCI 2016. The first was that because of data shortages only 4 Caribbean countries (Barbados, Jamaica, Dominican Republic and Trinidad & Tobago in order of rank) were included in this year’s index. The second was that all four of these economies were in the bottom 50 per cent of the survey sample, with the highest ranked (Barbados) at only 72nd place.

    The WEF in its Global Competitiveness Report defines competitiveness as “the set of institutions, policies, and factors that determine the level of productivity of an economy which in turn sets the level of prosperity that the country can achieve”.The GCI’s 114 indicators are grouped into 12 pillars which are further grouped into 3 sub-indices.  Collectively they measure an economy’s performance on a variety of concepts which impact on productivity and prosperity. Some of these include basic requirements such as institutions, infrastructure and macroeconomic environment to more sophisticated indicators dealing with business sophistication and innovation.

    In the preface to this year’s report, the World Economic Forum team highlighted that “many of the competitiveness challenges we see today stem from the aftermath of the financial crisis”.  Productivity and GDP growth in advanced economies and increasingly emerging economies remain subdued. This equally applies to Caribbean countries whose small open economies enhanced their vulnerability to the effects of global financial and economic crisis of 2008, and face many competitiveness disadvantages inherent in their smallness. However, not all of the region’s competitiveness challenges are structural and many are within our power to address.

    Caribbean Countries’ WEF GCI Performance 2016-2017

    So how did the region fare on the GCI this time around?  Barbados, whose economic recovery remains fragile, topped the CARIFORUM rankings with a rank of 72. Due to data shortages, the island had not been included in the 2015-2016 index but has dropped several places since its rank of 55 out of 144 economies on the 2014-2015 index.

    Barbados commendably tops the Latin America and Caribbean region in infrastructure, labour market efficiency and technology. However, the island’s most problematic factors for doing business are as follows: poor work ethic in national labour force, inefficient government bureaucracy, tax rates, restrictive labour regulations and access to financing. Unlike the other three Caribbean economies included, corruption was not seen as a major problem in Barbados.

    Trinidad & Tobago, which is currently in recession, has also lost ground, ranking 94 out of 138 economies in 2016-2017, compared to 89 out 140 in 2015-2016. The top 5 problem areas for Trinidad & Tobago for doing business were poor work ethic in national labour force, corruption, inefficient government bureaucracy, crime and theft and foreign currency regulations. But there is a silver lining. The WEF GCI identifies three stages of development: Stage 1 (Factor-driven), Stage 2 (Efficiency-driven) and Stage 3 (Innovation-driven). Trinidad was the only Caribbean country listed as a stage 3 economy (innovation-driven). Barbados was ranked as transitioning between stages 2 and 3. Jamaica and the Dominican Republic were classified as stage 2.

    Some more good news is that Jamaica saw forward movement on the index, moving to 75 out of 138 in 2016-2017 from 86 out of 140 in 2015-2016, as well as the Dominican Republic which ranked 92 out of 138 countries in 2016-2017 compared to 98 out of 140 countries in 2015-2016. The Dominican Republic’s reforms were mentioned in the report.

    Importance of Country Competitiveness Indices

    The WEF GCI is the most comprehensive benchmark of national competitiveness of economies worldwide. This year’s index comprised 98% of the global economy. It is, therefore, quite disappointing that not only does no Caribbean country currently rank among the top 50, but that so few Caribbean countries are included in the 2016-2017 index compared to previous indices as a result of data shortages.

    These rankings are important for several reasons.The GCI is a useful tool for policy makers not only  for benchmarking the economy’s current performance  across over 100 competitiveness indicators against its historical performance, but also against other economies in the same bracket. As such, it provides good empirical evidence for setting policy priorities and interventions as national competitiveness strategies are crafted and refined.

    Secondly, and importantly for small economies which depend significantly on foreign direct investment inflows, the WEF GCI is one of several indices, along with the World Bank’s Doing Business Index, which discerning investors consult when considering potential investment locations. For this reason, it is not uncommon for investment promotion agencies to reference their country’s favourable performance on these indices when marketing to prospective investors.

    The Way Forward

    It is axiomatic for any economy that  competitiveness should not only be long-term but sustainable. What the current WEF GCI makes clear is that economies in the Caribbean region have a lot of room for improvement, particularly in these problem areas: inefficient government bureaucracy, work ethic in the national labor force and corruption. Improving our competitiveness, however, is not a government responsibility alone. It requires continued strategic and enhanced  public-private sector collaboration and partnership.

    Governments, the private sector and other stakeholders including trade unions and other civil society actors, therefore, need to closely examine the causes and solutions for these problematic areas. For example, what are the factors which contribute to the perception of “poor work ethic”? What country-level and firm-level productivity enhancing reforms are working and which need revising or implementing? What can we do improve the vexing issue of “inefficient government bureaucracy”? This year’s Global Competitiveness Report focused heavily on the Fourth Industrial Revolution. What role can ICTs play in improving our weak areas?

    We can also take lessons from those economies which consistently rank as the most competitive economies and those which saw tremendous improvement. The top five economies in this year’s GCI were in order of ranking: Switzerland, Singapore, United States, Netherlands and Germany. What best practices can we learn from these countries? How about those countries like India, which made the biggest leap of any country in this year’s index by climbing 16 places? Or Mauritius, a SIDS, ranks 45th , having climbed two places? Even our own Jamaica and the Dominican Republic which saw improved rankings may hold valuable lessons.

    Businesses also need to play their part. It is unacceptable that the region is so poorly represented on the GCI year after year. A few years ago, I was part of the survey team which administered the WEF  Executive Opinion Survey in Barbados, the main instrument used for gathering the data utilised in a whole suite of WEF reports, including the Global Competitiveness Report. While in each instance our team was able to meet our quota, one of the challenges we found was the unwillingness of some business executives either to participate in the survey, or to complete it properly and in a timely manner. This is after repeated attempts to impress upon them the importance of the data collected in the survey for judging Barbados’ competitiveness and to ensuring Barbados was ranked on this important index. If insufficient businesses answer the survey, the country will not be included in the index. To encourage greater private sector participation in the survey in each country, I suggest there be closer collaboration between the country partner institutes and the various private sector bodies in the countries.

    The full WEF GCI 2016-2017 Report may be accessed here.

     Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • Caribbean Weekly Trade & Development Digest – September 25-October 1, 2016

    Caribbean Weekly Trade & Development Digest – September 25-October 1, 2016

    These are some of the major trade and development headlines and analysis across the Caribbean region and the world for the week of September 25-October 1, 2016. 

    For past issues, please visit here.

    Regional

    Dominican officials meeting heralds stronger trade ties 

    Dominican Today: The foreign ministers of the Dominican Republic, Miguel Vargas and of Haiti, Pierrot Delienne, on Thursday announced a meeting of the Joint Bilateral Commission set for October 19, when topics pending since the last meeting in Port au Prince will be addressed. Read more

    Dominican Agro Sector: Time to renegotiate DR-CAFTA Trade Deal

    Dominican Today: Dominican Republic’s agro producers (Confenagro) on Thursday said the DR-CAFTA free trade deal must be reviewed and evaluated, as stipulated in executive order 260-16 issued Sept. 17. Read more

    Can Upscale Chocolate turn the tide on Haiti’s devastating deforestation

    Scroll.in: When a tiny Quebec chocolate maker won a gold prize at this year’s premier International Chocolate Awards for a bar made with Haitian cocoa beans, it rocked the specialty chocolate world. The cocoa beans had been on the market for less than a year, and a Haitian chocolate bar had never before received the award. Read more

    European Union to consider approval of accord with Cuba

    CaribbeanNewsNow: The European Union on Thursday proposed that its member states to consider approval of a political and cooperation accord with Cuba aimed at normalizing relations with the Caribbean nation.Read more

    The Sharing Economy and Caribbean Tourism – Op Ed by CTO Head Mr. Hugh Riley

    Caribjournal: The marketplace is evolving. Ten years ago no one imagined homeowners opening their doors and welcoming strangers to bunk at their tropical beach bungalows or private cozy homes for affordable rates. Forget about standing out in the street waving frantically to flag down a taxicab or worrying about having enough change to hop on a bus. Those days are over. Read more

    International

    WTO Panel to Discuss India’s Paper on TFA in Services on Oct 5

    The Indian Express: The first meeting of a WTO panel to discuss the new concept paper floated by India on a proposed trade facilitation agreement in services will be held on October 6 in Geneva. India is pitching for this agreement with a view to reduce transaction costs by doing away with unnecessary regulatory and administrative burden on trade in services.Read more

    WTO cuts 2016 world trade growth forecast to 1.7% 

    Reuters: The World Trade Organization cut its forecast for global trade growth this year by more than a third on Tuesday, reflecting a slowdown in China and falling levels of imports into the United States.Read more

    CITES to vote on legalising Rhino horn trade

    IOL: Parties wait with baited breath to find out if two-thirds of the 182 parties at CITESCOP17 will vote in favour of legalising rhino horn.The 17th meeting of the parties for Cites breaks tomorrow for two days, and early next week for some important votes to take place. Read more

    US-Africa Trade Relationship in Focus at AGOA Forum

    ICTSD: On 22-26 September, African and US ministers, trade officials, civil society, and business sector representatives gathered in Washington D.C. to discuss the implementation of the African Growth and Opportunity Act (AGOA) at the 15th AGOA Forum. Held once a year, the event gives all stakeholders the opportunity to exchange on potential avenues for enhancing US-Africa economic ties. Read more

    EU and US Trade Negotiators seek to get TTIP talks back on track

    TheGuardian: Trade negotiators will meet in New York next week to search for common ground on the controversial EU-US trade deal, which has been buffeted by strong opposition on both sides of the Atlantic. Read more

    Lack of Transparency in PACER-Plus paints bleak future for Pacific peoples

    RadioNewZealand: A Pacific academic says the lack of transparency around negotiations on the proposed regional trade deal PACER-Plus does not bode well for indigenous peoples. Read more
    BREXIT: PM to trigger Article 50 by end of March
    BBC:  Theresa May will formally begin the Brexit process by the end of March 2017, she has told the BBC.The PM’s announcement on triggering Article 50 of the Lisbon Treaty – which begins the formal negotiation process – means the UK looks set to leave the EU by the summer of 2019. Read more

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    For past issues, please visit here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • WTO Public Forum 2016 focuses on “Inclusive Trade”

    Alicia Nicholls

    How can we make trade and trade rules more inclusive for small and medium sized enterprises (SMEs) and women in business? This was the central theme with which government representatives, NGOs, civil society organizations, business leaders, academics, students and ordinary citizens from around the world grappled at the World Trade Organisation’s (WTO) Public Forum held September 27-29, 2016. The flagship outreach event in the WTO’s calendar, the 2016 Public Forum attracted a record 2,000 registrants according to WTO Director General, Roberto Azevedo in his opening remarks on the first day of the event.

    This year’s main theme “Inclusive Trade” is timely given the current global trade and economic climate marked by slowing global trade and economic growth, rising anti-trade sentiment in advanced economies and a strong populist backlash against the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP).

    On the first day of the event, the WTO Secretariat launched its flagship trade policy publication, the World Trade Report 2016. Themed “Levelling the Trading Field for SMEs“, the Report explores SMEs’ participation in global trade, obstacles to their participation and cooperative approaches to promoting SME participation in global trade. Among the Report’s findings are that “trade participation of SMEs in developing countries is low, with exports accounting for 7.6 per cent of manufacturing sales, compared to 14.1 per cent for larger firms”.

    In his opening remarks Director-General Azevedo noted that the backlash against trade and globalisation is not unique during periods of low growth, but cautioned that “history also shows the dramatic consequences that this kind of sentiment can have”. He explained that while trade was an important anti-poverty tool there needs to be acknowledgement that the benefits of trade “don’t reach as many people as they should and we should act … not by attacking trade, but by making it work better.”

    Throughout the three-day event, a number of sessions and workshops were held exploring various themes, including e-commerce and bridging the global digital divide, SME access to trade finance, the sustainable development goals (SDGs), regional trade agreements (RTAs), sustainable investment, inter alia.

    Audio recordings of the various sessions are available on the WTO’s website here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • Is the UN ‘essential’ for Small States? Singapore Minister makes the case

    Is the UN ‘essential’ for Small States? Singapore Minister makes the case

    Alicia Nicholls

    “In an uncertain world, small states have to work much harder just to stay afloat. Small boats on a rough sea will be tossed and turned much more than a tanker with heavy ballast. For our survival and prosperity, small states have to stay open and connected to the world. But our very openness makes us vulnerable to external shocks and threats.”  – Singapore Minister for Foreign Affairs, Dr. Vivian Balakrishnan at 71st UN General Assembly, 2016

    As a policy nerd, I enjoyed listening to, and reading the speeches given by the representatives of the 193 members at the 71st United Nations General Assembly. However, one speech stood out particularly to me. It was the poignant statement made by Minister for Foreign Affairs of the Republic of Singapore, His Excellency, Dr. Vivian Balakrishnan entitled “Small states in an Uncertain world” in which he argued why the United Nations was important for the survival and prosperity of small states.

    Questions about the 21st-century relevancy of the UN stem not only from the unsuitability of its organisational structure to current geopolitical realities, but also its peacekeeping failures and the fact that so many members, including prominent ones like the United States, are frequently behind on UN membership fees. Dr. Balakrishnan’s intervention on this issue is, therefore, timely.

    In less than fifteen minutes, Dr. Balakrishnan convincingly and succinctly  laid out the well-known challenges faced by small states in an increasingly uncertain global economy marked by sluggish growth, growing protectionism, terrorism and health epidemics. The learned Minister reiterated that in this harsh external environment,”small states have to stay open and connected to the world”, and that our “very openness makes us vulnerable to external shocks and threats”.

    He outlined three elements which he saw as crucial for the survival and prosperity of small states, namely, a rules-based multilateral system, international partnership and cooperation and sustainable development. On each of these points he reiterated why the UN was right for the job.

    In the decades since the UN’s formation in the mid-1940s, its membership has grown from only the “Great Powers” to include numerous former colonies which have become independent states. Small states now make up about two-thirds of the UN’s membership. Noting that small states are “usually at the receiving end of the decisions and actions of large powers”, Dr. Balakrishnan explained that the concept of “one country, one vote” gives small states a voice they would otherwise not have. After all, the vote of the small island developing state of Barbados has the same weight as a vote by the United States, the world’s most powerful country. In concluding, Dr. Balakrishnan proffered that [u]ltimately, small states need the United Nations to provide the framework for building partnerships, promoting development and pursuing peace and security within a rules-based system.”

    I quite enjoyed Dr. Balakrishnan’s speech. One cannot deny that there are flaws in the United Nations system which need to be more expeditiously addressed if it is to continue serving the needs of small states in years to come, including reform of the Security Council which still reflects the geopolitics of the 1940s. There is also concern over some of the actions of the UN’s peacekeepers, including the UN’s role in the cholera outbreak in Haiti which it has only admitted to recently.

    I agree with former UN Secretary General, Kofi Annan’s assertion in 2002 that “the United Nations exists not as a static memorial to the aspirations of an earlier age but as a work in progress – imperfect as all human endeavours must be capable of adaptation and improvement.”

    Despite its imperfections, the UN is an important forum for global cooperation on issues of international development. The 2030 Agenda for Sustainable Development is just one of these initiatives. The “one country, one vote” has given small states the opportunity to have their voices heard on global diplomacy and policy despite their size disadvantage.

    Several initiatives have been spearheaded by small states, including the UN Convention on the Law of the Sea and the International Criminal Court. Small states have also left an indelible mark on the UN’s work by raising the global spotlight on climate change and other development issues, including the sustainable development goals (SDGs). It is little wonder, therefore, why Caribbean countries in their national statements before the UN General Assembly pledged their continued support of the UN, while also supporting calls for reforms.

    The full National Statement by Singapore’s Minister for Foreign Affairs, Dr. Vivian Balakrishnan may be read here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.