The Advocate's business journalist, Jewel Brathwaite, asked me for some comments on a range of economic issues last week, while I was attending a lunchtime lecture on fiscal deficit issues. His basic question was whether Barbados could be insulated from the impact of the global recession. My basic answer was no it could not, but it could do some things to make its impact less and prepare to benefit better from the recovery. My other point was that people seemed to have a tendency to want pain, but not too much, or be prepared to hold strain, but not for too long. Recessions do not come as one size fits all, so people may be distressed and disappointed but seeing an end to recession in 2010 may be too optimistic, and recovery in 2011 and 2012 was more likely.
Another idea was about the unevenness of economic activity, where my point was that it's good that the whole economy is not tied tightly to tourism, so that when it rises or falls, everything else in the economy does not automatically rise or fall (see Barbados Business Monday report). That said, other than international business activity, Barbados' non-tourism-related economic activities are not strong enough to counteract against developments in tourism.
On the adequacy of international reserves, an idea that was not not well captured was that the real test of adequacy is not the level of reserves when there is no crisis but how that level can withstand an actual crisis. Only time would tell if reserves equivalent to 21 weeks of imports or any other level is enough.
I also gave Mr. Brathwaite a link with the current debate about how to deal with the fiscal deficit as it impinges on tertiary education. Education can be a foreign exchange earner, and now is as good a time as any to look to see if ways exist to leverage the higher education establishments in that direction. I noted how Ross University (located in Dominica and The Bahamas, see http://www.rossu.edu/) and St. George's University, Grenada, (see http://www.sgu.edu/) were doing this and filling needs for medical training in the US. This is not a new idea, and can be seen as part of notions of medical tourism, with a logical step being that foreign medical staff could also be trained in the Caribbean region, which has a good record in areas such as nursing training. This could help in our region keep more of its trained staff while still being a good source of trained staff for north America, for example.
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