Mr. Sanjaya P Panth, Mr. Paul Cashin, and Mr. W. A Bauer
The Caribbean has made substantial progress in recent years in implementing economic reforms, both at the national and regional level. The Caribbean: Enhancing Economic Integration examines the product of the efforts made by Caribbean policymakers to strengthen regional cooperation and integration, which has yielded economic transformation and tighter integration with the global economy. This volume discusses regional financial integration as a means of deepening financial systems and raising regional growth; the relationship between tax incentives and investment, where harmonized regional action is important in seeking to overcome collective actions problems; and the consequences for the Caribbean of the erosion of trade preferences in key export markets. The book is based on empirical research carried out as part of the IMF's regional surveillance work in the Caribbean.
This paper estimates the size of the informal economy for 32 mainly Latin American and Caribbean countries in the early 2000s. Using a structural equation modeling approach, we find that a stringent tax system and regulatory environment, higher inflation, and dominance of the agriculture sector are key factors in determining the size of the informal economy. The results also confirm that a higher degree of informality reduces labor unionization, the number of contributors to social security schemes, and enrollment rates in education.
Mr. Alonso A Segura Vasi, Walter Zarate, Mr. Gonzalo C Pastor Campos, and Mr. Ulrich H Klueh
This paper attempts to offer specific inputs to the debate on local content promotion in the oil industry, using the specific case of São Tomé and Príncipe as point of reference. Our approach emphasizes inter-sectoral linkages and institutional pre-conditions for local content promotion. Based on an Input-Output description of the economy, we quantify the consistency between the prospective oil sector development and the growth of other sectors of the economy. We also assess a number of sectoral policies and "niche" activities within the oil industry that would maximize the local benefits from oil exploration.
This Selected Issues paper analyzes the income dispersion and comovement in the Eastern Caribbean Currency Union region. It finds that incomes are diverging, with the Leeward Islands converging to a higher income level than the Windward Islands. The paper examines the macroeconomic impact of trade preference erosion on the Windward Islands and demonstrates the substantial impact from preference erosion on growth, trade balances, and fiscal positions. The paper also analyzes the size of the informal economy in the Caribbean.
The countries that were once British colonies in the Caribbean share a common language and a colonial history of slavery, dominance of a plantation-based sugar industry, and broadly similar government and administrative traditions. Following independence in the late-1960s economic strategies and performance across the region diverged. However, by the end of the 1980s, in the face of economic collapse Guyana had abandoned its strategy of "cooperative socialism", and its economic policies converged with those generally supported by the IMF and World Bank. Despite this policy convergence and shared colonial origins, economic performance and social indicators in Guyana and Barbados have continued to diverge. The paper explores some of the origins of this divergence, and, in particular, the deep seated factors that derive from the countries' history, geography, and demographics. In Guyana, while the focus on sound macroeconomic policies and donor support has been important, the most pressing requirement for sustained progress is to strengthen domestic institutions and build consensus on the country's future direction.
This Selected Issues paper on Belize reviews the external competitiveness, balance sheet currency mismatch, and public sector debt. Belize is a small, open economy and highly dependent on external trade. Real wages in the private sector have increased only slightly. Belize’s exports of commodities grew strongly in volume terms during the last 10 years. The currency mismatch and liquidity pressures point to a growing exchange rate risk. Belize would have to maintain a significant primary fiscal surplus to reduce indebtedness over the medium term.
Mr. A. Salehizadeh, Mr. Peter Berezin, and Mr. Elcior Santana
It is typically assumed that countries in the Caribbean suffer from a lack of output and export diversification. Contrary to this popular perception, we find no evidence that output variability is higher in Caribbean countries than in larger, more diversified, developing economies. In addition, we find no evidence that export earnings are more volatile in the Caribbean economies than elsewhere. In fact, export earnings are quite stable in the Caribbean, reflecting the fact the region is rather unique in that most of its export earnings are generated from service exports, which tend to be considerably less volatile than goods exports.
The statistical data on value added by sector at current prices, value added by sector at constant prices, GDP by expenditure at current prices, consumer prices, population estimates, employment in the public sector, summary of the operations of the public sector and operations of the central government of Guyana are presented in this paper. The data on monetary survey, accounts of the bank of Guyana, value, price, and volume indices for exports and imports commodity, and related economic indices are also presented.
As a reflection of the vulnerability to external shocks and the importance of large projects, gross domestic product growth has showed significant variations in the second half of the 1990s. The large public sector investments that have started in 1997 included the Leeward Highway, a new ferry and cruise ship berth, a banana irrigation project, and investments in health and education. During the second half of the 1990s, agriculture output declined—with output in 1999 about 20 percent lower than in 1995.
This paper focuses on economic developments in Guyana during the 1990s. By 1991, economic performance had turned around in response to the shift in economic policies and the improved incentive framework. Following sizable reductions in 1989–90, real GDP grew by about 7 percent a year in 1991 and 1992, mainly owing to a recovery of export-related production and new foreign investments in the bauxite, gold, and forestry sectors. By 1992, inflation had declined markedly; the fiscal and external deficits were reduced substantially; and private and official capital inflows had risen significantly.