It is well established in the economic literature that it’s the rich who benefit from the lion’s share of energy subsidies. Yet, it is often the poor and vulnerable who protest loudly against these reforms. Why does this happen? What are we missing?
Sunny skies and beautiful beaches come to mind when you think about the Caribbean. But beyond the turquoise water lies a history of underage marriage, a practice that still lingers throughout the region.
My Nani (the Hindi word for maternal grandmother), came from a low-income family from the island of Trinidad. Growing up, she worked on a sugar plantation with her siblings. But poverty and manual labor didn’t compare with what she experienced after her mother died.
It has been almost four years since I first became involved with the regional public-private dialogue initiative, the Caribbean Growth Forum (CGF). In June 2012, I walked into the conference room at University of the West Indies, Mona Campus for the Launch of the first phase of the initiative and there was something electric in the air. It was new and fresh, but old fears lingered; was this to become 'just another regional talk-shop?'
Wide-eyed and optimistic I was determined that for my small part it wouldn't turn out that way.
The fact is that a government can soften a recession by increasing spending (the counter-cyclical approach) to raise demand and output. If government reduces spending (the pro-cyclical approach), the likely result is a deeper recession.
Volatility in financial markets gets wide attention in the public eye. Less noticed is what we in the development world call macroeconomic volatility—faster-than-desired swings in the broad forces which shape an economy. Think investment, government spending, interest rates, foreign trade and the like.
There are three key questions to analyze: how do these forces interact, what is their effect on overall growth, and what policies are best to follow? All this is of more than academic interest: macroeconomic volatility can bring substantial hardships to millions of people
Do these numbers just seem like bits of trivia? In fact, these are all important results that came out of natural capital accounting (NCA) – a system for generating data on natural resources, such as forests, energy and water, which are not included in traditional statistics. NCA follows standards approved by the United Nations to ensure trust, consistency and comparison across time and countries.
“Plantain nu eat like rice” — a Caribbean saying roughly translated as “Make do with what is available to you” — applies to the region’s experience with public-private partnerships (PPPs) as well as to life on the islands. For many decades, implementation of PPPs in the Caribbean has been mixed; government officials and citizens alike have had to “make do” with these results.
Some partnerships have successfully delivered new or improved roads, ports, airports, bulk water treatment facilities, and electricity generation plants, along with other high-quality infrastructure facilities. However, other promising PPPs faced challenges that were never overcome. In many cases, the complexity of the PPP development and implementation process meant long delays in delivering projects; others resulted in questionable value or unexpected costs to governments or consumers.
To help Caribbean governments fulfill the promise of PPPs to deliver improved infrastructure assets and services, the Caribbean Development Bank (CDB), the Inter-American Development Bank (IDB), the Multilateral Investment Fund (MIF), the World Bank Group (WBG), and the Public-Private Infrastructure Advisory Facility (PPIAF) have created the Caribbean Regional Support Facility. This US$1.2 million program was launched at the High-Level Workshop on Practical Implementation on PPPs in Saint Lucia on June 15. An important component of its near-term activities, an upcoming series of boot camp-style workshops, will increase technical capacity among Caribbean government officials, offering the depth and breadth that’s been missing from the PPP market.
A boat trip from Port Elizabeth to Kingstown, in the Caribbean country of Saint Vincent and the Grenadines, is a one-hour trip that locals take several times a day. It was during one of these journeys that the boat of Kamara Jerome, a young Vincentian fisherman, ran out of gas six miles from Bequia City in what is termed locally as the "Bequia Channel." While waiting for help with strong wind gusts and the sun on his head, the idea of developing a boat that would run with wind and solar energy was born. Soon after, the idea became a prototype; a boat using green technology was on the water making 20-year-old Jerome a winner of international innovation competitions and a role model to other Caribbean youth.
In Mexico, young engineer Daniel Gomez runs a multimillion bio-diesel company originally conceived as a research project for his high school chemistry class. Gomez and his partners - Guillermo Colunga, Antonio Lopez, and Mauricio Pareja - founded SOLBEN (Solutions in bio-energy in Spanish) in their early twenties.
Although Daniel and Kamara have different educational backgrounds, they do share one important skill, the ability to identify a problem, develop an innovative solution, and take it to the market. In other words, being an entrepreneur, an alternative to be economically active, that seems to work and not only for a few.
Prior to about 2005, for many tourists their Jamaican vacation was ruined at the last minute, by the hot and overcrowded conditions inside Montego Bay’s Sangster International Airport. Fast forward 10 years, and waiting for a flight at Sangster is an altogether more pleasant experience. The air conditioning actually works, and the whole environment is infinitely less stress-inducing than before.
What’s the difference? The private sector.
In 2003, the Government of Jamaica finally succeeded in doing what it had been trying to do for a decade: privatize Montego Bay Airport. A private sector consortium, led by Vancouver International Airport, quickly invested millions of dollars in expanding the terminal building, doubling the airport’s capacity and opening dozens of new retail spaces. Since then, the consortium has invested more than US$200 million on expansions and improvements to the airport, all of which has been entirely off the government’s balance sheet.
Jamaica has gone on to implement several more public-private partnerships (PPPs), with mixed results. The second phase of its ambitious highway construction program — the Mount Rosser Bypass — was recently opened, cutting a swath through miles of virgin territory. However, early indications are that traffic levels are not living up to expectations, probably due to the Bypass’ steep eight percent gradient, which is beyond the means of most Jamaican trucks and buses.
In the energy sector, Jamaica is completing three PPPs with a total of 115 megawatts of renewable energy (RE) capacity, putting the country on track to meet its RE target of 12.5 percent of generating capacity by the end of 2015. Lastly, the government is currently completing formalities for the sale of Kingston Container Terminal (KCT) to a consortium of CMA/CGM and China Merchant Marine, a transaction that is expected to result in a US$600 million capital expenditure program by the port’s new owners.