April 24, 2014

How to Develop a Sustainable Island Economy

By Kareem Guiste

By Kareem Guiste

Some islands in the Caribbean are inherently disadvantaged by their small populations, and thus, are unable to take advantage of the sort of productive initiatives that developing larger islands can. At a time when the global economy is at its worst in years, we look to the sound management of our leaders across the region for a plan of action that would guide the sustainability of our regional economies. Having examined the economies of such Small Island Developing States (SIDS), what might the options for our leaders in the region be?

Financial Budgeting
While we recognize that taxation is one of the main sources of revenue for most, if not all of our islands, budgeting for growth is very critical. Taxing an ailing economy may not be sustainable in the long run, so we must look to alternative options that can guide the growth of small economies.

While the revenue derived from taxes does increase, expenditure on non-productive activities increases at a much hire rate, negating the benefits of increased taxes on the economy. If there is need to block fiscal gaps, proper management and strong financial budgeting must be put in place. This may be understandably difficult for governments, however, the possibility of focusing on overall economic growth rather than on political aspirations may be a good place to start for quality fiscal budgeting and management.

Infrastructure Development
The development of an infrastructural plan for SIDS is another important activity that could lead to sustainable economic growth, therefore contributing to a sound development plan. Simply put, structural development management lends to a more organized physical, social and fiscal economy as activities associated with this development option influences job creation.
Infrastructural growth creates new industries and expands existing ones, providing outlets for continued and new productivity through direct and indirect linkages. The economies of SIDS are focused heavily on tax revenue and grant funding from global agencies and neighbouring political allies, but how long will these funding options last? A development plan relating to structural design and management must be placed high on the agenda for any long-term sustainable growth to be derived.

Investment in Human Resource Development
The most valuable resource of any developing state is its people. The quality of education and training available to a population will influence the growth prospects of a nation. With a dependable and quality education system ranging from primary to post graduate level programs, a nation is bound to have the critical tools needed to develop an efficient, productive and growth driven human resource.

The Eastern Caribbean can boast of quality institutions that impart high standards of education, but have we reaped the benefits from these individuals? Or have they enriched other developing or developed nations across the globe? The issue of brain drain has been and continues to be a major concern for governments of SIDS over the years. The problem is that while the education system is sound, and produces well-educated and knowledgeable individuals, finding suitable and reasonably remunerated positions poses a problem.

While several factors lend to the issue of brain drain, the two mentioned above are most prevalent. A large number of trained and qualified individuals across various sectors and disciplines have indicated that suitability of placement and remuneration are major reasons why they tend to emigrate to “greener pastures.”

By Kareem Guiste

Comments

  1. Dvt says:

    Excellent Article

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