The COVID-19 pandemic presents an unprecedented challenge to Caribbean economies. While the region has thus far managed to contain its infection rate better than most other regions globally, the economic fallout – experienced and to come – is likely to demonstrate that we have fared less well. Travel restrictions and mandatory quarantining protocols have helped to limit the spread of the infection but have also struck at the heart of the tourism industry, the region’s ‘bread and butter’ sector. Even commodities-based economies have not been spared, as the global prices of commodities, such as oil, have been severely impacted. As Caribbean countries shift gears towards re-opening their economies, what is clear is that it cannot be business as usual. Quick fixes alone will not be enough. Targeted structural reforms will be required to place our economies on a competitive, sustainable and inclusive growth path.
The CARICOM comprises small open economies dependent on trade. Prior to the pandemic, the region’s economies have been underperforming – recording below average annual GDP growth rates, running continuous trade deficits, and acquiring unsustainable levels of public debt. With the economic fallout from COVID-19, the region’s economic growth projections appear even more dismal. Apart from the unsustainable debt levels, the limited economic, trade and foreign direct investment diversification further complicate the region’s recovery. However, trade remains a viable avenue for COVID-19 economic recovery. In the short run, trade recovery strategies can manage disruption and strengthen critical sectors. In the medium to long-term, trade policy can be used to sustainably build economic resilience and diversification.
This Document highlights the shortcomings of the region that have been exposed by COVID-19 and examines the role of trade policy in the region’s COVID-19 economic recovery across five broad areas, namely,: (i) Innovation and Industrial Policy, (ii) Agricultural Development and Food Security, (iii) E-commerce, (iv) MSME Development and Export Activity and (v) Investment Facilitation for Development. The SRC considers these to be core areas on which the future of the Caribbean’s development should be hinged.Trading Our Way to Recovery During COVID-19: Recommendations for CARICOM Countries.pdf
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