Wes­ley Gib­bings

Eco­nom­ic growth in the Caribbean will con­tin­ue to ex­pe­ri­ence road­blocks once it's the re­gion's air trans­port sec­tor and sea port op­er­a­tions, among oth­er im­por­tant ar­eas of busi­ness, con­tin­ue to lag be­hind the re­gion's de­vel­op­men­tal ob­jec­tives.

This was one con­clu­sion when pri­vate sec­tor and civ­il so­ci­ety or­gan­i­sa­tions met in Be­lize ear­li­er this week to dis­cuss re­forms to dri­ve the de­vel­op­ment process in the Caribbean.

One doc­u­ment tabled by or­gan­is­ers of the an­nu­al Caribbean Growth Fo­rum (CGF) was a 2015 Caribbean De­vel­op­ment Bank (CDB) study of re­gion­al air­lines which point­ed to, among oth­er things, "bad fi­nan­cial de­ci­sions...such as by Caribbean Air­lines (CAL) in a short pe­ri­od over 2010/11."

An­oth­er, com­mis­sioned by the World Bank (WB), point­ed to short­com­ings in port op­er­a­tions through­out coun­tries of the Or­gan­i­sa­tion of East­ern Caribbean States (OECS).The Fo­rum is an ini­tia­tive of the WB, In­ter-Amer­i­can De­vel­op­ment Bank (IDB) and CDB.

The groups en­dorsed a com­mu­nique which in­cludes a call for re­form ac­tions to have "spe­cif­ic and mea­sur­able mile­stones" while the CGF will pro­vide "a frame­work and fa­cil­i­tate the re­view process."

World Bank Caribbean Coun­try Di­rec­tor, So­phie Sir­taine, said be­cause of the "par­tic­i­pa­to­ry ap­proach" of the Fo­rum "each cit­i­zen has an in­cen­tive in keep­ing track and mon­i­tor­ing the is­sues dis­cussed to make sure that the re­forms col­lec­tive­ly iden­ti­fied are mov­ing for­ward."

One area of ur­gent need of change is air trans­porta­tion. The CDB air trans­port study con­cludes that the sec­tor "is close to reach­ing a tip­ping point" in the Caribbean.

"Some domi­ciled car­ri­ers that have made sig­nif­i­cant con­tri­bu­tions to the so­cio-eco­nom­ic wel­fare of the economies they have served over the years, are go­ing through a pe­ri­od of un­cer­tain­ty," the study says.

"The air­lines con­tin­ue to make loss­es, with share­hold­er gov­ern­ments con­cerned about hav­ing to prop them up in­def­i­nite­ly."

The study sets out a num­ber of mea­sures to "lim­it the vi­cious cy­cle of loss­es, high debts, bank­rupt­cies and bailouts" and "to place the in­dus­try on firmer foot­ing in or­der to fa­cil­i­tate its re-launch­ing in­to the glob­al mar­ket­place as a stronger com­peti­tor."

Among the chal­lenges con­fronting the sec­tor iden­ti­fied by the study is the fact that "in­tra-CARI­COM mar­kets are too thin."

"There is sim­ply not enough scale to over­come the high fixed costs of op­er­a­tion," the study says, cit­ing ris­ing fu­el costs, in­ad­e­quate In­for­ma­tion and Com­mu­ni­ca­tions Tech­nol­o­gy (ICT) sys­tems are in­ad­e­quate and "in­dus­tri­al re­la­tions" which the study says "can al­so be chal­leng­ing."

It adds that re­gion­al air­lines "strug­gle to com­pete with bet­ter cap­i­talised for­eign air­lines on ser­vices to (and) from the Caribbean while even much larg­er air­lines "have found it nec­es­sary to par­tic­i­pate in merg­ers, eq­ui­ty in­vest­ments, al­liances, code shares and oth­er co­op­er­a­tion im­per­a­tives in or­der to sur­vive and thrive."

High tax­es and charges are al­so iden­ti­fied to­geth­er with the fact that re­gion­al air­lines are of­ten re­quired to op­er­ate "some un­prof­itable routes for so­cial rea­sons."

"Air­line boards," the study says, "are of­ten not free of po­lit­i­cal in­ter­ven­tion."

T&T was not a part of the de­lib­er­a­tions and when asked why by T&T Guardian one source replied that "each coun­try has dif­fer­ent re­view process­es and dis­cus­sions are still on­go­ing with a few gov­ern­ments in­clud­ing T&T, An­tigua and Bar­bu­da, and Bar­ba­dos."The meet­ing al­so fo­cused on the in­vest­ment cli­mate of re­gion­al states, lev­els of skill and pro­duc­tiv­i­ty and lo­gis­tics and con­nec­tiv­i­ty.

A 2015 WB pol­i­cy re­search pa­per fo­cus­ing on sea ports with­in the Or­gan­i­sa­tion of East­ern Caribbean States (OECS) was al­so tabled at the meet­ing.

Though the Ef­fi­cien­cy and Per­for­mance As­sess­ment looks specif­i­cal­ly at port op­er­a­tions in the sev­en East­ern Caribbean states, T&T comes in for men­tion since this coun­try ac­counts for the bulk of re­gion­al im­ports by coun­tries of the sub-re­gion. Vin­cent­ian ex­ports of ground pro­vi­sions and fruits to T&T are al­so cit­ed.

The WB pa­per says while "there is no ap­par­ent car­go ca­pac­i­ty prob­lem" in the OECS, there are prob­lems such as "in­ad­e­quate main­te­nance of ex­ist­ing fa­cil­i­ties and equip­ment" while "the con­nec­tiv­i­ty of the OECS ports is lim­it­ed by in­ter­nal is­sues, not by the ca­pac­i­ty of ship­ping lin­ers or cur­rent route de­sign."

"Re­vamp­ing ports to en­able the ef­fi­cient han­dling of con­tain­ers–and to move past out­dat­ed break-bulk prac­tices–is clear­ly over­due," the pa­per says while, in some in­stances, "the OECS ports have not ful­ly de­vel­oped their in­fra­struc­ture to sat­is­fy the cur­rent and po­ten­tial de­mand of cruise ships, forc­ing them to use car­go ter­mi­nals for pas­sen­ger traf­fic."

The CGF is now in­to its sec­ond phase of de­lib­er­a­tions, hav­ing ini­tial­ly fo­cused on de­ter­min­ing the pri­or­i­ty ar­eas. The cur­rent phase is de­vot­ed to im­ple­men­ta­tion by re­gion­al gov­ern­ments.Sir­taine said the WB saw "the re­newed com­mit­ment of Caribbean coun­tries un­der this sec­ond phase of the CGF as a re­al catal­yser to sup­port new growth mod­els for the re­gion."