Are We There Yet? The Path Towards Sustainable Private Sector Development in the Caribbean – Book Launch

The Inter-American Development Bank (IDB) and Compete Caribbean have released a new book, Are We There Yet? The Path toward Sustainable Private Sector Development in the Caribbean. This publication calls on Caribbean nations to implement critical reforms to enhance the business environment and improve firm productivity, aiming to accelerate long-term growth across the region. Covering 13 countries, the book offers a regional perspective on the obstacles and opportunities facing Caribbean economies as they work to increase private sector competitiveness and resilience.

The Caribbean has struggled with lower-than-average economic growth, with the region’s GDP expanding at just 1.47% per year between 1960 and 2019, compared to Latin America’s 1.94% growth rate. This trend places the Caribbean significantly behind other middle-income regions globally, underscoring the need for strategic interventions. The book arrives at a crucial time as the Caribbean looks to rebuild and strengthen its economies in the wake of the COVID-19 pandemic. The IDB views this publication as a practical roadmap, aligning with its ONE Caribbean regional program to foster more sustainable economic development across the region.

The book examines four key determinants of business productivity and growth: the investment climate, quality of human capital, innovation capacity, and access to finance. Each of these areas presents specific challenges, but also offers potential for significant improvement through sound policy actions. Insights from the 2020 Innovation, Firm Performance, and Gender Issues in the Caribbean (IFPG) Firm-Level Survey, funded by Compete Caribbean, provide a data-driven foundation for these recommendations.

For the business environment, the study identifies issues such as inefficiencies in obtaining permits, reliance on informal payments, and frequent power or internet outages. To address these, the book suggests reforms to streamline processes, digitize public services, and increase transparency. Tackling these inefficiencies is seen as essential for creating a more supportive environment for businesses in the Caribbean.

The book also highlights the need to address skills mismatches in the labor market, with an oversupply of unskilled labor and a shortage of high-demand skills. Emigration of skilled workers exacerbates this issue. The authors recommend collaboration between employers and educational institutions to design curricula that reflect market demands, as well as initiatives to enhance vocational training, particularly in ICT. This, paired with government-supported employment services, could help align workforce skills with industry needs.

In addition, the book calls for enhanced support for innovation and entrepreneurship, noting that existing programs are often small and lack the ecosystems to foster scalable startups. It advocates for the development of incubators and accelerators and for fostering collaborations between universities and industry to drive technological innovation. By addressing these areas, Are We There Yet? provides a comprehensive guide for Caribbean leaders, setting out a vision for a thriving and sustainable private sector across the region.