ST. JOHN’S, Antigua – Antigua and Barbuda Prime Minister Gaston Browne says his vision is for a CARICOM that is guided by a blueprint for the services sector development and trade.
Prime Minister Gaston Browne (Right) and Antigua and Barbuda Ambassador to CARICOM, Dr. Clarence Henry at the services conference on Friday (CMC Photo)“The aim is to have a Community where each citizen understands and is fully engaged in the operationalization of this blueprint,” Browne said as he reported on the progress which CARICOM has made since the regional integration movement commenced five decades ago in1973.
Speaking on the topic “Advancing the Services Agenda within CARICOM,” Browne, who has ’lead responsibility for advancing Services in the quasi-Cabinet, said that based on data, it is his “settled view that the services sector has been and remains the largest sector in the regional economy, during the first 50 years of regional integration.
“The sector has also been a critical earner of foreign exchange, contributing a persistent surplus on the services account which has partially offset an equally persistent deficit in trade in goods. “.
But Browne said that the sector, therefore, should continue to leverage opportunities for achieving CARICOM’s objectives of full employment of labor and other factors of production, and enjoying future sustainable economic growth and development by boosting the international competitiveness of both its goods and services-production, and trade.
“Notwithstanding what I have reported, our Community is still to harness the full potential of the regional services sector and, as we enter the next 50 years, our task is to set that ambition for the next generation of leaders.
“We continue to face major structural constraints in the Community which slow the pace of implementation and ultimately the achievement of the intended benefits of regional integration,” he said.
Prime Minister Browne said notably, CARICOM countries are a group of small countries scattered over 250,000 square miles of ocean and that this geographical fact alone suggests that commuting and communicating pose a natural challenge.
“We are located in a primary hurricane belt. The devastation from a hurricane of a few hours can take a member state’s development back a decade,” he said, recalling the passage of recent hurricanes that have affected Antigua and Barbuda, Dominica and the Bahamas between 2017 and 2022.
“Several member states face high debt and anemic growth, and there are language differences, two fundamentally different legal systems – the Common Law and the Civil Law complicated by social and cultural differences.”
But he said that regional Integration has, however, acknowledged the real nature of these challenges and over time, “we have sought to transform the outlook and prospects for our region.
“We must also take account of the external environment in which our regional services sector operates. The CARICOM remains extremely vulnerable to external shocks, especially financial shocks. There are several examples, including the 2007/2008 global financial crisis which threw the economies of the region off their growth trajectories,” Browne said, making reference also to the policies, decisions, and the impact of another group of major trading partners on the region’s taxation policies.
Browne said as CARICOM gets ready to enter a new step at the start of the next 50 years, “we must take responsibility and acknowledge that there is far more to be done to realize the objectives of the Community under Article 6(a) and 6(b) of the Revised Treaty.
“The CARICOM leaders will continue to strive to improve the standards of living, the conditions of work, to achieve full employment, and to harness the potential of our expertise, of labor and other factors of production.”
Browne said that the services sector is a literal “gold mine” that needs to be fully tapped by all countries in the region, saying “it holds the best opportunities for the Community’s future sustainable development as history has revealed”.
Browne said that the services sector is the largest and fastest growing within CARICOM, accounting for more than 75 percent of gross domestic product (GDP) in the Eastern Caribbean Currency Union (ECCU) and more than 55 percent in the more developed member states.
He said a quick illustration of the contribution of services to the regional economies since CARICOM was established demonstrates the fundamental importance to the economic growth of the region.
Prime Minister Browne said between 1974 and 1979, the services-GDP grew by at least 96 percent rising from US$2.5 billion to US$4.6 billion respectively, in current prices. He said the two leading sub-sectors were the aggregate wholesale and retail trade, hotels and restaurants, and government services.
Between 1980 and 1995, services-GDP grew by at least 73 percent rising from US$6.2 billion to US$10.7 billion respectively, with the two leading sub-sectors being the aggregate wholesale and retail trade, hotels and restaurants, and transport and communications.
Prime Minister Browne said that between 1996 and 1999, the service3sw sector grew by at least 40 percent rising from US$11.1 billion to US$15.5 billion respectively, while between 2006 and 2021, the sector grew by 13 percent in real terms rising from US$54 billion to US$61.2 billion respectively.
But he noted that in 2019 alone, the most recent normal year, the services sector contributed US$65.2 billion or 74.4 percent of total output within CARICOM.
“It also generated a surplus of US$4.3 billion on the services account of the Balance of Payments, which to some measure helped to offset a deficit in trade in goods for the same period. Labour force data up to 2015 indicated that the services sector accounted for 75 percent of total employment.”
Browne, quoting figures from the Barbados-based Caribbean Development Bank, said medium and small medium enterprises (MSMEs) represent between 70-85 percent of Caribbean businesses and contribute between 60-70 percent of GDP.
“Critically, they account for an estimated 50 percent of total employment,” he told the conference.
Browne said that all CARICOM member states have a well-developed, highly internationally connected distributive sector, accounting for US$16.3 billion or 25 percent of total services output.
“It is estimated that employment in this sub-sector was also approximately 25 percent of total employment. The sub-sector contracted by approximately nine percent in 2020 but rebounded marginally in 2021, on account of COVID-19,” he said.
Browne said the other services sectors such as real estate, financial intermediation, tourism and hospitality, education and health services as well as the creative industries, have also contributed significantly to the services sector.
