Photo Credit: Caribbean Development Bank

Photo Credit: Caribbean Development Bank

It’s now or never. Covid further disintegrated fragile economies. The Caribbean needs to take “practical” steps to build a modern, sustainable infrastructure.

The Caribbean is Being Left Behind

Many people in the Caribbean are feeling that times are increasingly difficult and the data proves them right!

Writing in the Jamaica Gleaner, Elizabeth Morgan, a specialist in international trade policy and international politics, said, “The economic projections from all the international organizations (IMF, OECD, World Bank, UNCTAD, WTO) are extremely gloomy for a region dependent on trade in goods and services (primarily tourism) and already heavily indebted.” [1]

Research in international development success factors; poverty and inequality research from the Caribbean Development Bank and research from the World Bank Group all corroborate the people’s perception. High rates of poverty and inequality continue in the Caribbean and the lethargic growth rate of GDP-PPP per capita (people’s annual purchasing power parity comparatively expressed in US dollars) is at the root. While it is true that the people of the Caribbean have benefited from natural resources as well as tourism; it is also true that citizens have not seen enough improvement in overall quality of life.

A Caribbean Development Bank study on poverty issues said, “Despite laudable efforts at reducing poverty and inequality in the Caribbean, high rates of poverty and inequality remain a pressing development challenge. Not only have high rates persisted, but the nature and face of poverty and inequality in the Caribbean are changing…creating the phenomenon of the ‘new working poor’.” [2]

According to the World Bank, the Caribbean comparative average annual growth rate of GDP-PPP per capita is appalling: South Asia is at 2.9%, the Least Developed Countries are at 2.1%, Indebted Poor Countries (HIPC) are at 1.3%, Sub-Saharan Africa is at 0.4% and Caribbean small states are at 0.3%. [3]

Globalization and development research dictate that the Caribbean needs to be “one” united trading block that focuses on entrepreneurship, micro-loans, trade and direct investment.

Globalization is an irreversible process that is eroding the protectionist barriers to the flow of international goods. Worldwide, it has been increasingly creating multi-national partnerships, regional integrations and trading blocks that are wielding new-found economic and political influence through e-commerce via continuous product innovation and productivity improvements.

If the small countries of the Caribbean want to thrive, they can’t keep going at it alone, satisfied with the traditional strategies of putting all their eggs in one basket and selling their 1 major product to 1 major customer. They must accept to give up a good part of their economic independence, merge their economic policies and develop their MSMEs’ ability to export much, much more than they have been doing to date.

As Jamaican economist and diplomat Richard Bernal, arguing for the imperative for repositioning, said in an essay entitled Globalization and Small Developing Countries, “To compete successfully in global markets, countries have to remove obstacles and barriers to entrepreneurship, capital and technology.”[4]

No alt text provided for this imageIn his book, Out of Poverty: What Works When Traditional Approaches FailPaul Polak argues that poverty can’t be eradicated through top-down methods like donations, national economic growth and Big Business.

Polak has shown that helping the poor through micro-loans that fuels their own entrepreneurship, which in turn helps them pay back their investment in just months, has increased the annual income of many of the rural poor in Africa and Asia. 

World-renowned, Zambian economist Dambisa Moyo, in her book, Dead Aid: Why Aid is Not Working and How There is a Better Way for Africa,argues for less foreign aid to Africa, which actually cripples local economies by fueling corruption and dependency. She has called for the phasing out of aid programs and replacing them with the Chinese-style development model which focuses on increasing trade and direct investment, which creates jobs and allows the growth of domestic savings.

The job of government is not to keep propagating the status-quo of trickle-down economics but the continuous improvement of the quality of life for “all” of its people.

In his classic work, An Inquiry into the Nature and Causes of the Wealth of Nations, written in 1776, Adam Smith, the eighteenth-century Scottish moral philosopher, outlined 3 important government functions: national defense, administration of justice (law and order), and the provision of certain public goods (e.g., transportation infrastructure and basic and applied education). All progressive states have moved far beyond these 3 basic responsibilities, adding economic and social programs that have improved the lives of their citizens and also been good for business.

Small countries of the Caribbean must recognize that the job of government is not to keep propagating the status-quo of trickle-down economics but the continuous development or sustained improvement in the country’s economic and social conditions and the improvement of the quality of life for “all” of its people, despite the country’s vulnerability to external interference in domestic affairs by powerful countries and the challenges of recurring natural disasters.

In the face of trade globalization and the economic devastation caused by the Covid pandemic; the Caribbean Region needs to act now or never with 10 practical steps leading to sustainable economic growth and development:

1.  Implement a “Caribbean Economic Union” Strategy

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CARICOM came into being on July 4, 1973 with the signing of the Treaty of Chaguaramas. The Treaty was later revised in 2002 to allow for the eventual establishment of a single market and a single economy (CSME). CARICOM’s main purposes are to promote economic integration, coordinate foreign policy, human and social development and security.

In her article cited above, Elizabeth Morgan hoped that the Caribbean region would finally rise to the economic challenge, with the support of the international community, by implementing the CSME, have robust growth and job creation by engaging in international trade, by encouraging private-sector groups and trade promotion bodies to search out new opportunities, by diversifying and promoting research and development, by improving regional transportation, by keeping leaders accountable and elections credible. [5]

2.  Establish new leadership that will unite the people behind the economic vision

Leaders of small countries at the UN General Assembly Debatein September 2020 did denounce the traditional “Me First” attitude and outlined a vision for progressive cooperation. [6] However, marshalling support for a new vision is difficult because cooperation and collectivism is not in the financial best-interest of the few, who fear that they might lose long-held power and profits.

What is needed now is a charismatic leadership, that will articulate the Caribbean Region’s unifying vision and who will clearly define and implement the Caribbean’s competitive advantage. The Region needs a “sibling-leader” who grew up mediating, facilitating, problem solving, building consensus and also dragging in those that are comfortably ensconced in the status quo.

3.  Create / expand indigenous banks, which will promote a private-sector that will lead growth and open new trade markets

In the Caribbean, MSMEs provide 70% to 90% of the jobs andyet there are too few opportunities nor many productive results on the development of micro, small and medium enterprises (MSME). This despite all the repeated and valiant efforts of the Caribbean Development Bank and the Caribbean Export Development Agency.

MSMEs face a number of “infrastructure” issues: gaps in training in business skills; high cost of infrastructure services; inadequate physical infrastructure support; low levels of technology usage to improve productivity; lack of competitiveness that would stimulate innovation and productivity; high cost of materials; lack of export market information; shortage of skilled labour; etc.

Moreover, MSMEs can’t expand and export because of the unpredictability of shipping costs, the complexity of Caribbean exporting and the absence of a robust electronic-payments infrastructure. Postal Systems and Customs, working together, could eliminate all of these issues.

By far, the most serious issue facing MSMEs in small countries is the difficulty in accessing capital due to the lack of a homegrown financial sector with indigenous banks that understands the history, economics and the real needs.

Despite that fact that plenty of money is available (as pointed out repeatedly by the Caribbean Development Bank) foreign banks “don’t get” the value that MSMEs can play in developing Caribbean economies. Major banks remain far-removed from small island needs and are simply not culturally and locally aware, nor are they willing to be enlightened.

The Caribbean is still largely a “cash” society. An Inter-American Development Bank study, by economist Amos Peters, investigating the size of the informal economies in 6 Caribbean countries concluded that the size of the informal sector is 20–30% in The Bahamas, 30–40% in Barbados, 29–33% in Guyana, 35–44% in Jamaica, 35–45% in Suriname, and 26–33% in Trinidad and Tobago. their [7]

One would think that such significant numbers would move governments and banks to develop policies that would encourage MSME formalization in order to grow their GDP and the tax base. Achieving it is challenging – resistance by MSMEs is based on lack of information on how to register, the registration process, taxes, and the lack of perceived benefits from formalization. Governments could use incentives, low banking fees and participation in growth opportunities such as e-commerce, but none of this is going on.

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Haiti’s Sogebank group took an innovative tack to help MSMEs. Under the visionary leadership of Pierre Marie Boisson, it created SOGESOL (Societe Generale de Solidarité). Its mission is to promote Haitian entrepreneurship by adapting traditional banking loan applications and services to the needs of micro, small and necessity entrepreneurs, employees of the private sector and agricultural producers while respecting the banking standards of profitability and efficiency.

Customers can also transfer money and pay bills from their Sogesol or mobile-money Mon Cash (Digicel) account to the other. This transfer ability is a key component in the equation. SOGESOL and the Sogebank group gets it. They understand that as MSMEs formalize, grow and pay taxes; jobs will be created and that’s how the GDP will grow.

The Caribbean Region can never succeed if it continues to be dominated by foreign banks. It needs a truly Caribbean bank.

4.  Create and implement a “Caribbean Financial Inclusion Strategy” for MSME and the working poor 

To date, Jamaica, Belize and Haiti are the only Caribbean countries that have a written, detailed, formal, government financial-inclusion strategy (a clear and coordinated path forward) to increase financial inclusion and financial literacy.

In countries with developing economies, a large segment of the population is self-employed. In the Caribbean, this ranges from 14% in the Bahamas and 17% in Barbados to 39% in Jamaica and 73% in Haiti. [8] MSMEs, the working poor and necessity entrepreneurs, are all inextricably linked; therefore, the financial-inclusion strategy must include MSMEs as the population at large.

5. Reorient education and promote research for economic development

In a global world, like other small countries with developing economies, the Caribbean needs to lower the costs and barriers to trade, match small firms with foreign markets, match communities with foreign investors, use the university institutions to invest in open-source (publicly accessible) research, and “internationalize” education focused on IT and business excellence so that it can produce business managers who can better compete in this brave new world.

6.  Upgrade and standardize the Region’s IT infrastructures

The Region is plagued by insufficient digitization and Internet networks are not robust enough to compete in the global economy. More effort on digitization and integrated payment systems would allow MSMEs to develop and properly compete on the world stage. Caribbean governments could immediately share their data network with businesses to enhance competitiveness.

7.  Open MSME incubators with shared office space, set up a web e-commerce marketplace and local / regional transportation infrastructure

The old strategy of increasing support of the existing tourism infrastructure may lead to some increased employment at resorts and hotels, restaurants, clubs, bars, diving schools and other adventure activities. However, most of these jobs are subsistence, low-paying jobs that do very little to raise people out of poverty or improve quality of life. The biggest gain goes to the resort owners and, even more so to large trans-national tourism corporations operating resorts or cruise ships which doubly benefit also from concessions squeezed from local governments.

While some countries, like Barbados, have set up a good MSME support ecosystem; MSMEs still face daunting challenges because a smörgåsbord, buffet-style information table is just not the right type of support. You need coaching, mentoring and facilitatiion

Industry and trade organizations can also use their own resources to help members. To lower imports and increase jobs at home, the Haitian hotel industry encourages hotels to buy “local” from Haitian farm co-ops, makers of spa products and artists. This approach should be supported by government policy throughout the Caribbean.

Much more is needed, such as offering shared MSME infrastructure for exporting (easy and common regional exporting process, shared marketplace website, predictable shipping costs via pre-paid boxes, etc.).

Countries also need to develop policies on research, directed economic diversification, development of production-capacity (particularly in the exportation of value-added goods or e-commerce) and most-of-all an effective transportation network. Regional air carriers (Bahamas Air, Suriname Airways, LIAT and Caribbean Airlines) are essentially bankrupt. What is needed is a major restructure and CARICOM regional-airline solution (prepared to carry significant e-commerce cargo) feeding into 2 or more regional hubs connecting to international flights.

8.  Implement mobile money (e-payments) for MSMEs and the working poor

As stated above, foreign banks remain far-removed from small island needs and are simply not culturally and locally aware. Not only are they totally uninterested in the needs of the poor and working poor; they have also actively impeded the growth of mobile money, which has been proven to lift people out of poverty.

With over 2 billion registered accounts worldwide, mobile money is growing like never before. The United Nations Conference on Trade and Development (UNCTAD) has pointed out the value of mobile money. The Bill and Melinda Gates Foundation also found that when social government payments to women were deposited directly to women-held savings accounts (mobile money) there was a 25% increase in earnings among women, a 60% increase in women’s bank balances and an 11% increase in their participation in the workforce. 

Mobile money can also extend access to mobile credit, MSME micro-loans, insurance, cross-border remittances, bill payments, airtime top-ups and especially savings.

Growth of mobile money in the Caribbean has been too slow due to resistance imposed by large banks. In other countries, mobile money has made great strides only once Central Banks and commercial banks realized that mobile money is neither a competitor nor a threat and that Mobile Money Operators are simply providing a needed public-policy goal platform to manage “mini-accounts”.

In the Caribbean, mobile money unfortunately remains stuck in its infancy – Haiti (Boom Haiti, Lajancash, MonCash), Bahamas (Island Pay), Jamaica (CONEC, M3, GK Mpay), Montserrat (Bitt), Guyana (GTT), Belize (Bitt), Dominican Republic (Orange) and Barbados (Bitt).

9.  Dramatically reduce income inequality and promote gender equality

No alt text provided for this imageThe Caribbean Development Bank (CDB) has said, “Inequality in the Caribbean is a direct outcome of its colonial history whereby social stratification and the different types and levels of poverty came to be firmly etched out, particularly in response to the plantation system and economy (Potter-Jones and Magnus, 2015)….disparities still remain including access to quality education, health services and opportunities and group-based inequalities such as race, ethnicity, gender, location and age continue to slow the pace of poverty reduction in the Caribbean and undermine the development process and shared prosperity. It signals the need to intensify efforts towards promoting greater social inclusion, equity in opportunities and inclusive economic growth. [9]

As stated above, in a number of islands, a handful of local families of privilege still control the major part of the wealth. Such wealth inequality and unequal access to social services and economic resources thwarts development and relegates a significant number of individuals to persistent, working poverty. The hampering of upward mobility, fostered by income and gender inequality only leads to a rise in insecurity, creating more antagonism, continued poverty, an environment of pervasive dissatisfaction, high government borrowing, capital flight and continued brain drain.

The findings of a study by the World Economic Forum, implies that, on average, increases in the level of income inequality (measured by a higher Gini Index) leads to lower transitional GDP per capita growth with increasing cumulative negative effect as years go by. [10]Higher and continued income inequality leads to lower and declining GDP. 

Kurt Andersen in his book, Evil Geniuses, presents a recent history of US political economics. He postulates that until the 1980’s, it was social programs that improved the economy of the US and improved the quality of lives of its citizens by establishing such things as social security, Medicare, environmentalism and consumer protections.

However, at the same time, corporate America and its supporters were pushing “Trickle-down Reaganomics” or “make things easier for businesses and prosperity will trickle-down to the people”. Corporate America profits grew but little trickled down to the people.

Sadly, the US now has the highest level of income inequality among the G7 countries (Gini Index @ .43) with over 84% of the wealth in the hands of the top 20% of the people.

According to the World Bank, globally, the Gini ranges from preferred lows of about 0.25 in some Eastern European countries to abhorrent highs of 0.50 to 0.60 in poorest countries in southern Africa. The Gini Index of income inequality is highest in Haiti (0.61) and lowest in the British Virgin Islands (0.23). Antigua and Barbuda and Barbados are at 0.48 and 0.47. There is so much room for improvement.

With Covid, the world saw that the US economy was woefully unprepared to address social needs like testing and health-care costs. Some Republican leaders actually said that people should be prepared to die to save the economy for their children. Certainly not a rational model to follow.

In her book, Caste, Pulitzer Prize winner Isabel Wilkerson, reveals the hidden caste system, the systemic hierarchy of human ranking, in America, She reveals the unspoken social stratification that still influences people’s lives, behaviour and the USA’s fate.

Both Andersen and Wilkerson present profiles of hope, that Caribbean countries can also adopt. The post-pandemic periods in the world have always been a time of pivotal change. Andersen argues that Americans have allowed their “hopes and dreams” to be hijacked by corporations and must reclaim them. Wilkerson outlines a number of ways by which people can move beyond the artificial and destructive separations of human divisions, toward hope and common humanity.

10. Use your postal systems to facilitate e-commerce and financial inclusion

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Despite all other efforts to grow the economy and grow exports, physical goods from must still be moved and delivered. Post Office networks are the Region’s hidden assets. Sadly, Ministers responsible for Posts have neither understood, nor utilized, the value of their Post Offices, as so many other countries have done. 

Postal systems play a key role in increasing exports and financial inclusion throughout the world.

Post Offices worldwide are their country’s interconnecting network…promoting communication, trade, developing businesses and growing the economy. They have been the communication and activity channel between the government and the citizens promoting socio-economic development. Finally, Posts are the gateway to the domestic and global trade infrastructure…promoting international trade and allowing their businesses to reach new markets, grow and create jobs.

Latin American Posts have become true “engines of economic growth”by implementing Exporta Fácil (Easy Export). An analysis of the Exporta Fácil by the Institute for the Integration of Latin America and the Caribbean (INTAL), concluded a clear export trend in average annual export growth rate: Brazil +26.3% (2000 to 2013) / Colombia +63.3% (2010 to 2013) / Ecuador +67.5% (2012 to 2013) / Peru +18.4% (2009 to 2013)/ Uruguay +24.6% (2009 to 2013).

91% of Posts worldwide (183 out of 201) also provide financial services such as remittances, current accounts, deposits, transfers, sayings, insurance, payment cards, etc. to over 1.5 billion (28%) of the adult population of 5.4 billion. The World Bank’s Findex data revealed that Posts are comparatively better at providing accounts to segments of the populations that are most vulnerable to financial exclusion such as the poor, the less educated, those out of the labor market, and those residing in rural areas.


Caribbean countries need to take action, and take action now! Countries must work together to grow their impact. They need to develop their MSME’s and allow the economy to grow organically.

Recognize that only a Region:

·      Where no one is deprived of economic opportunity;

·      Where all countries are truly committed and united under CARICOM’s CSME;

·      That focuses aggressively on international trade and direct investment;

·      That is digitally-modernized with integrated e-payment systems;

·      Where education is focused on international business and research is promoted; and

·      Where private-sector MSMEs (empowered by indigenous banks) can lead the way to economic growth and social development;

can compete effectively in the new global economic arena.

Frank Cianciullo is the lead advisor at Leapfrog Business Consulting. He writes on leadership, disruptive innovation, management, adapting to the accelerated rate of change impacting us as well as issues affecting the postal and logistics industries.

[1] Jamaica Gleaner, July 8, 2020, Elizabeth Morgan | CARICOM: Rising To The Challenges

[2] Caribbean Development Bank, “The Changing Nature of Poverty and Inequality in the Caribbean: New Issues, New Solutions.” 2016.

[3] GDP per capita growth (annual %), World Bank national accounts data, and OECD National Accounts data files.

[4] Globalization and Small Developing Countries by Richard Bernal,

[5] Jamaica Gleaner, July 8 2020, Elizabeth Morgan | CARICOM: Rising To The Challenges



[8]  Statista,

[9] Caribbean Development Bank, “The Changing Nature of Poverty and Inequality in the Caribbean: New Issues, New Solutions.” 2016.

[10] World Economic Forum, How does income inequality affect economic growth?