William Warren Smith, President, Caribbean Development Bank (CDB): Interview

Interview: William Warren Smith

How could economic and trade integration be better promoted in the region?

WILLIAM WARREN SMITH: Although the benefits of regional integration are apparent in CARICOM, they are not uniformly distributed across the entire region. In order to secure greater uniformity in the distribution of benefits, we have to strengthen our regional institutional architecture. This involves coordinating and improving policy frameworks that support competitiveness at the national level as well as making use of existing dispute settlement mechanisms to ensure fairness, transparency and investor confidence.

Further economic and trade integration can be best promoted in the region by accelerating the implementation of the World Trade Organisation’s Trade Facilitation Agreement. By adopting a coordinated approach, we can improve policy coordination and resource mobilisation to support its region-wide implementation.

What preconditions are needed to lay foundations for sustainable social and economic development?

WARREN SMITH: The region has made significant progress in recent years, so most countries are now classed as middle income. In addition, health and education are largely in line with global standards. However, deprivation levels remain unacceptably high, with at least one-fifth of the population living in poverty. Vulnerability to natural hazards and economic shocks is also a critical constraint to development. Laying a foundation for sustainable and inclusive social and economic development requires a reduction in the levels of poverty and inequality. It also requires building resilience to natural hazards, while protecting the environment for future generations. Regional governments should take legislative and other actions to improve competitiveness and diversify the export base. These actions must go hand in hand with improving access to relevant, high-quality education and training. Countries need to prioritise the construction of ICT infrastructure to improve connectivity and facilitate trade flows. In addition, they should invest in alternative sources of energy, as well as build institutional and regulatory frameworks that encourage private sector investment and foster entrepreneurial ecosystems that support growth led by small and medium-sized enterprises.

How can growth-oriented reforms be carried out?

WARREN SMITH: To create inclusive growth and improve living standards, the region needs to boost the export of secondary goods. Having exports largely based on natural endowments – such as tourism assets, and oil and mineral deposits – results in vulnerability to economic shocks, which has led to low and volatile growth, especially over the last decade. Many small developing countries have achieved sustained growth through export diversification, critical structural reforms that drive competitiveness and investments in infrastructure upgrades to protect against natural disasters. Building digital platforms to improve the delivery of government services is also an important aspect of the required framework. Given the limited resources at the national level, CDB and other supranational development partners can play a critical role in financing projects and other initiatives to close gaps in the legislative framework and in institutional capacity.

In what ways can Caribbean countries better adapt to the needs of the Fourth Industrial Revolution?

WARREN SMITH: To adapt to the Fourth Industrial Revolution, governments must recognise the opportunities and risks it presents. The region stands to benefit from the faster global growth that is resulting from the revolution. Further gains can come from expanding and accelerating the adoption of associated technologies, given their impact on productivity and competitiveness. Leveraging the full potential of the revolution will require key stakeholders to drive the region forward to ensure it remains highly competitive on a global scale.