“External donors cannot themselves deliver the growth the Caribbean needs, but the Caribbean private sector can,” said the Conservative minister as he formally launched Compete Caribbean.
The programme, being run in conjunction with the Canadian International Development Agency, the Caribbean Development Bank and the Inter-American Development Bank, aims to improve the business climate in 15 countries around the region.
While the current coalition government in London has ring-fenced its international development budget, Duncan will still have to prove to skeptics, particularly in the press, that the money is being well spent. “My government can only justify this kind of investment where we can demonstrate clear results,” he said.
While paying tribute to Jamaican success stories such as the tourism industry, Duncan said the Caribbean needs “to find new niche markets to help create jobs and increase exports. Compete Caribbean can help make this a reality.”
The British minister noted, in particular, the Enterprise Innovation Challege Fund part of the programme, which offers matching grants to underwrite the risk of developing innovative business ventures.
The fund received more than 130 proposals from interested companies earlier this year, which it whittled down to a shortlist of 60. Some ten applicants, including two from Jamaica, have now been asked to flesh out their ideas.
In a similar project in East Africa, the UK and phone company Vodafone combined to help 10-million Kenyans access financial services through cellphones. “This has made it easier for countless budding entrepreneurs to do business and work towards pulling themselves out of poverty,” Duncan said.
“I hope this Challenge Fund concept will have the same transformational impact here in the Caribbean as it has elsewhere.”
But representatives of the Inter-American Development Bank said the Challenge Fund represented only a sixth of the programme.
Among its most important works are projects to identify how the business climate can be improved, persuade governments to pass new legislation, ensure that the bureaucrats implement the new rules, and then measure the results in terms of jobs created or reduced business start-up times, said Jose Jorge Saavedra, the Executive Director of Compete Caribbean.
One US$750,000 project already under way in conjunction with the Planning Institute of Jamaica aims to build a knowledge base about what constrains private-sector development, develop a secured transaction framework to increase access to finance and foster public-private partnerships.
Another US$600,000 is in the pipeline to promote productivity and economic development in Kingston.
Duncan warned that growth trends in the region were already worrying before the credit crunch in 2008. Average growth has slipped from around 4 per cent per year in the 1960s and 1970s to less than 1 per cent today. And while world trade has been growing steadily, the Caribbean’s slice of the pie has not.
“The current economic downturn has only exacerbated this position and the growth trends will not be reversed by tinkering at the edges.”
Duncan strayed into support for JLP policy when he said: “Tough and sometimes unpopular decisions may need to be taken, for example by reducing fiscal deficits. No country or region is immune from the fall out, as we know back in the UK.”