Sustainable Infrastructure Investment Indispensable for Caribbean Competitiveness and Growth

Alicia Nicholls

Earlier this week, Barbadians experienced something that for many of us was a lifetime first – two consecutive days of island-wide electrical blackouts. While this phenomenon has made international news, it should be noted that such occurrences are very rare in Barbados, a country which has long boasted of a high level of human development which belies its small size.  It should also be remembered that similar events have happened in much more resource-endowed countries.

According to information released by the island’s lone electrical company, the Emera-owned Barbados Light & Power Company (BL&P), the blackout was caused by an unfortunate combination of aging equipment and bad fuel. The blackout also had several spinoff effects. It led to water outages in many parts of the island due to the reliance of the Barbados Water Authority’s pumps on electricity. Moreover, some customers also had issues with their mobile service perhaps due to the heavy reliance on data caused by the unavailability of wifi.

In the aftermath of ‘powergate’ in Barbados, there will be much discussion about the impact the two-day blackout has had on productivity, private sector profits and the Barbadian economy. What it reiterates, though, is that sustainable public and private infrastructure investment is indispensable for Caribbean competitiveness, trade and growth.

Sustainable Infrastructure

From the roads on which we drive, the ports and airports, the telecommunications network on which we depend for our daily communications, sanitation networks and the like, infrastructure comprises the physical building blocks of our countries. Infrastructure, for example, is what helps to connect suppliers with consumers, and exporters with foreign markets. It is needed for our daily work, play and comfort. Spillovers for the economy include increased productivity, economic inclusion, job creation and growth.

Increasingly, owing to the need to build climate resilience, the conversation is turning towards sustainable infrastructure. CRC Research defines sustainable infrastructure as “the designing, building, and operating of these structural elements in ways that do not diminish the social, economic and ecological processes required to maintain human equity, diversity, and the functionality of natural systems.”

The need for sustainable infrastructure is mentioned throughout the Sustainable Development Goals which comprise the United Nations’ Agenda 2030. For example, SDG 9 speaks to building resilient infrastructure. A report produced by The Economist magazine also highlighted the critical role of infrastructure in achieving sustainable development.

Sustainable Infrastructure key to building competitiveness

It is little wonder, therefore, why infrastructure is among the indicators of a country’s competitiveness, as seen with the World Economic Forum (WEF)’s Global Competitiveness Index. Countries, such as Singapore, New Zealand and Denmark, which rank high on that index, as well as on the World Bank’s Doing Business Index, almost always score high for their infrastructure. Jamaica, which currently leads the region in ease of doing business, has, among other things, made substantial investments in improving its infrastructure. The Transjamaica Roadway and the new Single Window for trade are two examples.

Capital expenditure projects, such as for the upgrading of port facilities, hospitals and road infrastructure, are often costly for cash-strapped governments. As such, many governments turn to multilateral development agencies for loans for infrastructure development. It is also why the China-initiated Belt and Road Initiative (BRI) has become so attractive to many governments, including some in the Caribbean, which have signed Memoranda of Understanding with China on this.

Private sector has role to play

However, it is not only Governments which have a role to play in ensuring sustainable infrastructure. Private sector entities are increasingly taking over functions once believed to be the domain of the State, including the provision of utilities. As such, these private entities also have a duty to ensure that they continuously invest in upgrading their infrastructure in order to meet international best practices for efficiency and environmental sustainability. To do otherwise would be detrimental to the customers which rely on them, as well as the economy and society as a whole.

Alicia Nicholls, B.Sc., M.Sc., LL.B. is an international trade and development consultant. Read more of her commentaries here and follow her on Twitter at Licylaw.