What does it take to make reforms work in small island countries?
At the end of June 2013, twelve Caribbean countries presented a roadmap for growth in three areas -logistics and connectivity, investment climate, skills and productivity- to a broad audience of private sector representatives, international development institutions, regional organization, civil society and media. That event culminated a 7-month long phase during which policy-making was not the result of close-doors meetings, but a process of intense negotiation, consultations, and consensus building among all actors of each Caribbean country’s societies. All of which was documented in real time and in a transparent fashion by each government. Yes, business was not “business as usual”.
Reforms priorities were agreed and a calendar for implementation brushed on a power point slide in the wonderful framework of five stars Bahamian hotel…After the workshop lights, projects and microphones shut down, many of us went home with a familiar sound in our ears: and now what? Was it another “talkshop”?
Why reforms in the Caribbean are slow?
Caribbean countries are facing enormous difficulties in revamping growth: FDIs are stagnating or declining, Doing Business indicators show little progresses –or reversal- in eliminating barriers to private sector development, tourist arrivals are sluggish and unemployment rising. And where growth is not an issue, shared prosperity is a big one, such as for example in the Dominican Republic. And then on top of it, while trying to recover from the 2008 crisis, the recent heavy rains caused important human and economic losses from which will be difficult to recover in the short run.
But policy failure, vulnerability and external factors are not the only one to blame. Caribbean scholars alluded to the presence of ‘anti-growth coalitions’ to emphasize the adverse impact of extractive elites on growth and on improvements in living conditions for the Caribbean people as a whole (Dookeran, 2012). Of course, this phenomenon is not unique to the Caribbean. At the same time the advantage for these countries is that in small states, significant reforms can have lasting impacts in a relatively short period of time (Persaud, 2011).
So, what would make implementation easier?
Many practitioners advocate for political will. Other observers suggest that strong political will alone is not sufficient to induce change (Johnson and Sahr Kpundeh, 2002). Indeed, even the presence of strong reform champions in many governments in the Caribbean does not seem to be a game changer.
Through the Caribbean Growth Forum process it became clear that to successfully carry out planned reforms in the Caribbean, two ingredients appear to be critical: while governments will have to provide the right set of incentives to address the structural issues inherent to the small size and geographic location of these countries (e.g., comprehensive approach to logistics, more conducive investment climate, new skills sets, etc.), they will also have to ensure that both the benefits and burden of needed reforms are shared, through a governance system that is at once more participatory and accountable, particularly in-between elections.
So the question then was how to make different public and private stakeholders achieve better cooperation, trust and synergies and develop the broad-based social coalition necessary to overcome the lack of collective action which lies at the root of many development challenges. To support the full implementation of economic reforms in the Caribbean, the CGF proposed to build a “pro-growth social coalition”, bringing together public and private actors to overcome current constraints in the Caribbean with a view to exchange experiences, challenges and solutions among peers. In contrast to past approaches, which have encouraged the imitation of reforms introduced in other settings and contexts (isomorphic mimicry, á la Matt Andrews), the CGF approach was meant to generate adaptation and acceptance of the change proposed. The process required opening up new communication channels between various stakeholders, for which a high degree of commitment is needed.
And although early to claim success, some changes are already taking place across the region in terms of substantive reforms moving forward with a coordinated support by various development agencies and strong ownership from all sector of society. Three countries have already adopted the CGF balanced scorecard to report on progress: Dominican Republic, Jamaica and Saint Lucia, with promising results in moving the growth agenda forward.
Dookeran, W. (2012). Power, Politics and Performance: A Partnership Approach for the Development. Ian Randle Publishers, Jamaica.
Persaud, A. (2011). Fostering Growth and Development in Small States through Disruptive Change: A Case Study of the Caribbean, Caribbean Paper No. 11 October 2011, The Centre for International Governance Innovation (CIGI), Waterloo, Ontario.