ewart williams : restoring competitiveness and growth in the caribbean feature address by mr ewart williams, governor of the central bank of trinidad and tobago, at the 4the biennial international business, banking and finance conference, university of the west indies, st augustine, 22 – 24 june 2011. * * * salutations : let me first of all thank the sponsors for their kind invitation to deliver the feature address at this 4th biennial international business, banking and finance conference. the organizers need to be commended for bringing together such an excellent group of academics and practitioners from the region and further afield to exchange views with us on – many hot - button economic issues. this forum is particularly timely since our caribbean economies find themselves at a critical inflection - point, with the legacy of the international financial crisis not yet behind us and with our region facing a global environment, which in many ways is markedly different from what obtained at the beginning of the last decade. a few days ago in its mid - year world economic outlook assessment, the imf warned that the global economy had run into a speed - bump arising from greater than anticipated weakness in us economy and renewed financial volatility arising from concerns about the depth of fiscal challenges in the euro area periphery – particularly, the greek debt problem. the imf report noted that although emerging market economies in asia and latin america continue to experience robust growth, they are now facing the risk of over - heating with inflation increasing at a faster rate than could be explained by rising commodity and food prices. our caribbean economies are still digging themselves out of the global crisis of 2008 and unfortunately the recovery of the region is lagging behind that of other developing countries. this most recent slide is, however, part of a longer - term trend in which countries in the region have not been keeping pace with growth rates in emerging markets around the world. according to the world bank statistics, in 1980, the caribbean ’ s average per capita income was twice as high as the average for developing countries ; today it is only a third higher. countries in the region have been growing at an average rate of 2 per cent per year while small island states have been growing at an average rate of 3. 6 per cent per year, roughly the average for the world economy. as we seek to reverse this trend and address the challenge of long - term viability, the region faces the reality that it has lost some comparative advantage at a time when the global economy has become less friendly. the following examples

promotion could make the region more attractive for foreign investment and reduce the fiscal cost attached to expensive and sometimes wasteful tax concessions ; regional planning could facilitate the exploitation of production integration opportunities, through clusters of economic activities ; and the integration model also presents opportunities for joint marketing in extra - regional markets, joint research and development, and joint purchasing arrangements. if the focus of our regional development strategy is the private sector, the sector would need to undergo a cultural re - orientation. foreign direct investment to the region has been on a steady decline over the past several years. while policy changes may help to reverse this decline, countries should also think about diversifying their targets for investment promotion, with the brics registering the fastest growth in the global economy they must be potential sources of foreign direct investment. so also must be brazil. bis central bankers ’ speeches some people feel though that our domestic private sector needs to be more aggressive, to get beyond their comfort zone, and to be more prepared to take risks. this is of utmost importance since the country is depending on our entrepreneurs to expand, create jobs and contribute to the general welfare. in this context, there is a case for targeted partnerships between the private sector and government to enhance international competitiveness, to identify and promote opportunities for greater economic diversification and to develop new export markets. these partnerships should also incorporate tertiary educational institutions that must be at the center of our efforts to promote research and development. unfortunately, i have spent my entire time outlining the many challenges that the caribbean economies face in their quest for sustainable growth over the medium - term. but these challenges are not destiny and difficulties can become opportunities for change. our region is at a cross - road of opportunity where the right combination of leadership, vision and commitment is needed to overcome a plethora of challenges. i am convinced that closer regional integration must be part of the solution and then we would need partnerships between the public and private sectors and other stakeholders including labour and our tertiary education. we need all hands on deck. bis central bankers ’ speeches