Trinidad and Tobago warns developing countries may not be able to with stand a second economic crisisListen /
There is a real risk that the present global fragility could impact on small peripheral economies and other developing countries that were able to withstand the initial impact of the crisis due to strong domestic economic buffers. So says Trinidad and Tobago's Prime Minister Kamla Persaud Bissessar. She told a High-Level Thematic debate on the State of the World Economy at UN Headquarters Friday that it is likely, however, that these countries may not be able to withstand a second shock of similar magnitude having not as yet attained pre-crisis economic strength.
She stressed that the global outlook is not very promising with the IMF projecting that global economic growth will decrease from about 4 percent in 2011 to about 3½ percent in 2012. Ms. Persaud Bissessar said this unflattering picture makes it imperative that we embrace new approaches to development to replace those which have created underdevelopment and persistent poverty in many countries.
Kamla Persaud Bissessar: Home grown solutions must assume major importance if we are to achieve long-term successes. In the Caribbean, we are shifting the old paradigm of development dependent on external sources to a new one of Caribbean Convergence; endogenous growth must be the real driver of Caribbean development. We are beginning to witness, however modest, some success as a result of this new approach to development. The Caribbean is projected to grow by approximately 3 percent in 2012, after expanding by an average of 1.7 percent during the first half of 2011. In the case of Trinidad and Tobago, my Government remains steadfast in its mission to address lingering financial vulnerabilities and to refocus our efforts on promoting growth and diversification. These policies have had some positive effects and the IMF has noted that economic recovery in 2012 came after an extended slowdown lasting three years.
NAR: According to the Trinidad and Tobago prime minister, the inclusion of the international financial institutions in the UN conference was commendable as it presented an opportunity to engage in open and frank discourse and to impress upon them the need for small States such as Trinidad and Tobago, to have a greater voice in their operations.
Kamla Persaud Bissessar: The economic recession impacting on many European capitals and the current crisis within the Eurozone reverberates around the world. In the Greek capital, large sections of the population are calling for a shift in the economic model of strict austerity as the means to economic growth. Economic models have to treat with the social and political climate of the day. It is clear that there is a need for more discussion on the different paths to economic growth and it should not be treated as a mantra. We need to think outside the box. We in the developing countries are asked to slavishly follow the economic policies dictated in the north without due regard for our particular economic and social circumstances. It is now time that we are all allowed greater participation at the table with our views, ideas and special experiences. We have to forge a new economic paradigm that adequately caters for our interests also. It cannot be business as usual.
NAR: Prime Minister Persaud Bissessar said developing countries face particular risks as many depend on commodities and primary sectors. She said the long term solution to debt management is the achievement of economic growth in these economies and the full employment of all available productive factors of production.
Kamla Persaud Bissessar: The economy of Trinidad and Tobago has been able to withstand some of the pervasive effects of the global financial crisis and economic downturn because of strong economic buffers and appropriate government action to support macro-economic activity including: Our International reserves at the end of 2011 were US$9.8bn, up from US$8.7bn in 2009, this was the equivalent of thirteen (13) months of import cover; The Government of Trinidad and Tobago has been seeking to boost local investment and economic activity and also attract foreign direct investment by ensuring a sound macroeconomic framework and a business friendly environment. Trinidad and Tobago is open for business. Investment through Transparency and Predictability of Commodity Prices Innovation & Enterprise: Our National Innovation Policy places increased focus on small and micro entrepreneurial activity given its potential to increase economic growth, employment opportunities and social development. We have established an Innovation Fund to allow talented individuals with pioneering business ideas the opportunity to develop their concepts into marketable products.
NAR: Prime- minister said Trinidad and Tobago also established an Economic Development Board and the Council for Competitiveness and Innovation mandated to improve global competitiveness and to support an investment strategy for diversification of the economy.
This is Don Bobb reporting.