THE inter-connectedness between Caribbean economies is, yet again, playing-out in real time and real terms like never before today, with Guyana’s new wealth spinning off into increased growth estimates for the rest of the Caribbean Community (CARICOM).

The World Bank said, in January, that smaller CARICOM member states would have been posting lower growth rates for 2022, if not for the large contribution of Guyana, thanks to its massive oil-and-gas earnings.

In its ‘Global Economic Prospects for 2022’, the bank pointed to the inter-connectedness between CARICOM economies, as the overall improved figures for the entire region reflect the massive 49.7 per cent growth projected for Guyana – the only CARICOM nation to post double-digit figures in 2022.
Coming closest to Guyana is Saint Lucia, with a 9.6 per cent upgraded growth estimate.

By the bank’s revised estimates, growth in CARICOM’s small islands will reach an average of 7.3 per cent for 2022 and 5.9 per cent in 2023.
But that doesn’t necessarily mean good news for the region, as without Guyana’s figures the projections would have been substantially weaker — at 4.6 per cent in 2022 and 4.2 per cent in 2023, respectively.

Finance Ministry officials in the smaller member states with weaker economies are very much aware of the inflating implications of adding Guyana’s input, which are not reflected in their earnings and doesn’t help them pay bills.

In all cases in the Organisation of Eastern Caribbean States (OECS), health facilities have been overwhelmed by COVID-19; and in most, export earnings and import landings have been extremely negatively affected by the effects of continuing related Supply Chain problems that snowballed globally in 2021.

There’s also the overwhelming reliance of most CARICOM island-nations on the tourism and travel industry, which is also seriously hampered by COVID, despite cruise and air lines calling in greater numbers at some Caribbean ports, as traditional destinations elsewhere in the wider region apply more restrictive entry protocols.

In Saint Lucia’s case, for example, with tourism accounting for over 65 per cent of GDP and over 60 per cent of employment in 2019, the COVID effect on tourism earnings so declined the island ended up borrowing more in 2020 and 2021 to pay debts and Public Service salaries, resulting in a 26 per cent decline in growth in 2021.

Like with the other three Windward Islands (Dominica, Grenada and St. Vincent and the Grenadines), Saint Lucia’s banana industry – heavily-relied-on for the past 50 years – has been crippled over the last two decades by competition from American-owned multinational banana corporations in Central America and was just showing signs of a possible re-start when the pandemic hit.

Against this background, as they prepare for the new six-month-old Philip J. Pierre administration’s first National Budget, Saint Lucian Finance Ministry and other government personnel welcome the World Bank’s 9.6 per cent higher growth projection.

However, (as one senior official puts it), the Budget Division’s main immediate priority is “Paying the bills and keeping the economy running.”
Saint Lucia has been overly reliant on sole major sources of income, moving from sugar to bananas and now tourism in the last 75 years; and while COVID has again underlined the heavy cost of having almost all its eggs in one basket, the current flooding of Port Castries with cruise ships unable to enter many others is lengthening that dependence – until the competing destinations return to the fold after travel restrictions end.

Indeed, all the evidence is that the major European and North American source countries are easing-up on protocols and travel restrictions; and with more Caribbean and Latin American destinations following suit and lowering entry requirements, the return of the competition will force affected islands to do more to diversify the product.

China, Europe and North America have been able to depend all-along on high levels of internal tourism between and within nations and states, unlike Africa and the Caribbean where tourism is still mainly seen in the outdated traditional terms of ‘tourists’ only being seen as visitors from outside the region crossing seas and skies to holiday in tropical climates.

Intra-and-inter-Caribbean travel has always been overlooked, underestimated and undervalued, with many CARICOM states (including Guyana up to the early-1990s) failing to categorise and classify persons arriving from other CARICOM or wider Caribbean countries as ‘visitors’.

For over two decades, Saint Lucia’s hotels have been offering an annual ‘Staycation’ package that offers room rates in Eastern Caribbean (EC) dollar-equivalents to the price normally quoted in US to extra-regional visitors.

But here again, traditional and cultural patterns have helped delay the mind-changes and adjustments necessary for locals to equally appreciate what the islands’ tourism bodies sell to European and North American visitors.

Most Caribbean citizens will still place higher premium value on a trip to New York, Toronto or London than to another CARICOM or wider Caribbean nation, including hot destinations like Cuba, Dominican Republic and Puerto Rico.

Ditto nations dependent on mono-crop economies like rice and sugar, nutmeg and bananas, all subject to market tastes and forces beyond Caribbean control.

The economic distress caused to the regional citizenry by COVID prevents most governments from even thinking of raising the usual income-generating taxes, but the private sector keeps passing the costs of supply-chain blues to customers with arrival of every new shipment of goods, supermarket prices rising with almost every grocery store visit.

Be that as it may, those island-nations without oil, gold, diamonds, manganese, limitless forests and such lucrative natural resources have to depend more on their human (services sectors) and other natural resources (like sea and sun, wind and waves) to bridge the widening economic gaps to be filled to achieve anything near even the lower World Bank average growth estimates for 2022 and 2023.

Meanwhile, with oil prices predicted to reach as high as US $120 per barrel sooner than later and more oil finds being continuously reported, Guyana’s expectedly-larger overall 2023 figures will again inflate CARICOM’s regional and national growth rate estimates, in this new relative era of Caribbean economic climate change.