Central American integration: its costs and benefits

Includes bibliography

Sustainable development 20 years on from the earth summit: progress, gaps and strategic guidelines for Latin America and the Caribbean

Includes bibliography

Cooperation on competition policy in Latin American and Caribbean bilateral trade agreements

Incluye Bibliografía

Quality management and competitiveness: the diffusion of the ISO 9000 standards in Latin America and recommendations for government strategies

Includes bibliography

Regional integration in Latin America and dynamic gains from macroeconomic cooperation

Includes bibliography

The State, business and the restoration of the neoclassical paradigm

Includes bibliography

Fiscal policy and the economic cycle in Chile

Includes bibliography

Special and differential treatment in the FTAA

Includes bibliography

The Netherlands Antilles: trade and integration with CARICOM

Introduction The Netherlands Antilles is an autonomous entity within the Kingdom of the Netherlands and comprises a federation of five Caribbean islands: Bonaire and Curacao (the Leeward islands) which comprise 80 per cent of the population of 211,000 and Saba, St. Eustatius and the southern part of St. Maarten (the Windward islands). Like the other countries in the Kingdom, it enjoys full autonomy in internal matters as, for example, education, public health, justice and customs. It has a per capita income of about US$ 12,000. The Leeward Islands and the Windward Islands account for about 75 per cent (Curacao (70 per cent) and Bonaire (5 per cent)) and 25 percent respectively of the economy of the Netherlands Antilles. The Netherlands Antilles has its own currency, the Netherlands guilder, which is pegged to the United States dollar at a fixed rate since 1971. The economy has some unique features that stem from its close relations with the Netherlands, its undiversified nature and heavy dependence on tourism, offshore finance, oil refining and shipping, the high share of trade (exports of goods and services of about 75 per cent of GDP), its geographical characteristics, its common border with the French Republic on St. Maarten, its duty-free access for imports from Aruba, its de facto free trade zone (FTZ), partial dollarization, especially for the Windward Islands, and its highly regulated labor market (1). Adverse economic shocks in the last two decades affected particularly the offshore financial sector and the oil refinery and, to a lesser extent, tourism. The repeal of withholding taxes in the United States in the 1980s indirectly caused the collapse of a number of highly profitable offshore financial activities in Curacao, leading to significant drops in government revenue and contributions to foreign exchange earnings. The withdrawal of Shell from Curacao in 1986 and the (temporary) closure of the oil refinery which had been a mainstay of the Curacao economy for almost three quarters of a century was the second major shock. It was subsequently leased to the Venezuelan State Company, Petroleos de Venezuela Sociedad Anonima (PDVSA), which resumed operations and preserved employment. In the 1990s, the Windward Islands were bit by several devastating hurricanes, which destroyed much of the economic infrastructure on the islands, including about half of the number of available hotel rooms in St Maarten. Further negative shocks were related to the discontinuation of certain trade privileges on European markets for Overseas Countries and Territories (OCTs), the withdrawal by the Netherlands of certain tax privileges for Dutch pensioners residing in the Netherlands Antilles and disruptions in the availability of Solidarity Fund resources for the smaller islands. National income has been on the decline since 1997. GDP declined by about 6 per cent between 1997 and 1999. Underlying fiscal imbalances and structural weaknesses have also impacted negatively on the economy. In recent years, with recession high unemployment and migration have been experienced (2). The Netherlands Antilles has been able to survive thanks to additional aid from the Netherlands, large-scale spontaneous emigration (mostly to the Netherlands), some drop in international reserves, an increase in domestic debt and arrears and reduced outlays for the maintenance of public assets. From 1986 onwards, successive efforts at restoring macroeconomic balance, particularly with regard to public finance, were made, but were unsuccessful. Adjustment was also attempted in 1996 and 1997, but failed to meet the desired targets. In 1999, the government launched a new National Recovery Plan" (NRP). The NRP contains important medium-term structural adjustment measures aimed at restoring macroeconomic balance and conditions for revitalizing the economy. The NRP subsequently served as an important input into a comprehensive adjustment plan drawn up with the assistance of the International Monetary Fund (IMF) and reflected in the government's Memorandum of Economic Policies dated 15 September 2000. Beyond restoring macroeconomic balance and reforming the economic incentive framework, the government aims at establishing a Comprehensive Development Framework (CDF) for the formulation and implementation of a sustainable long-term growth strategy. It is against the above background that this study is undertaken. Its main objective is to assess the integration options facing the Netherlands Antilles (3) vis-a-vis the Caribbean Community (CARICOM). A secondary objective is to examine the above taking into account, inter alia, the level of trade between the Netherlands Antilles and CARICOM, the barriers to trade between the two groups of countries and the requirements for increasing trade between the two groups of countries. The Consultant was given an initial Draft Terms of Reference (Annex 1) with the intention of modifying it in the course of the interviews with all the stakeholders. The main idea that emerged from these interviews was a concern with some possible form of association with CARICOM. The Consultant was asked to exam the costs and benefits of various forms of association and to recommend an option. This adjustment of the Terms of Reference (TOR) was substantial and involved the Consultant having to do some interviews and collect documentation in CARICOM. The study essentially revolves around the search for a road map for the Netherlands Antilles. It is tackled in the first instance by describing the existing system of trade of the Netherlands Antilles with a view to determining the import and export structures and the specific nature and extent of trade in goods and services between the Netherlands Antilles and CARICOM. 1 Netherlands Antilles: Elements of a Strategy for Economic Recovery and Sustainable Growth. Interim Report of the World Bank Mission, 5-20 December 2000. 2 IMF, IMF Country Report No. 01/73 Kingdom of the Netherlands-Netherlands Antilles-Recent Development, Selected Issues and Statistical Appendix. May 2001 3 The Netherlands Antilles is a country within the Kingdom of the Netherlands. It contains five islands. Curacao and Bonaire (Leewards) and St Eustatius, Saba and St Maarten (The Windwards)"

The role of the State and the quality of the public sector

Sectoral policies make explicit and implicit assumptions about the behaviour and capabilities of the agents (such as dynamic responses to market signals, demand-led assistance, collaborative efforts, participation in financing); which we consider to be rather unrealistic. Because of this lack of realism, policies that aim to be neutral often turn out to be highly exclusive. They fail to give sufficient importance to the special features of the sector -with its high climatic, biological and commercial risks and its slow adaptation- or to the fact that those who take decisions in agriculture are now mostly in an inferior position because of their incomes below the poverty line, their inadequate training, their traditions based on centuries of living in precarious conditions, and their geographical location in marginal areas, far from infrastructure and with only a minimum of services and sources of information. These people have only scanty and imperfect access to the markets which, according to the prevailing model, should govern decisions and the (re);distribution of the factors of production. In our opinion, this explains the patchy and lower-than-expected growth registered by the sector after the reforms to promote the liberalization of markets and external openness in the region. In view of the results of the application of the new model, it may be wondered whether Latin America can afford a form of development which excludes over half of its agricultural producers; what the alternatives are; and what costs and benefits each of them offers in terms of production and monetary, social, spatial and other aspects. The article outlines the changes in policies and their results at the aggregate level, summarizes the arguments usually put forward to explain agricultural performance in the region, and proposes a second set of explanations based on a description of the agents and the responses that may be expected from them, contrasting the latter with the supposedly neutral nature of the policies.

Development strategies for the information and communications technology sector in the Caribbean: A global perspective

This occasional paper examines the experiences of three leading global centres of the ICT industry – India, Silicon Valley, and Estonia – to reflect on how the lessons of these models can be applied to the context of countries in the Caribbean region.Several sectors of the technology industry are considered in relation to the suitability for their establishment in the Caribbean. Animation is an area that is showing encouraging signs of development in several countries, and which offers some promise to provide a significant source of employment in the region. However, the global market for animation production is likely to become increasingly competitive, as improved technology has reduced barriers to entry into the industry not only in the Caribbean, but around the world. The region’s animation industry will need to move swiftly up the value chain if it is to avoid the downsides of being caught in an increasingly commoditized market. Mobile applications development has also been widely a heralded industry for the Caribbean. However, the market for consumer-oriented smartphone applications has matured very quickly, and is now a very difficult sector in which to compete. Caribbean mobile developers would be better served to focus on creating applications to suit the needs of regional industries and governments, rather than attempting to gain notice in over-saturated consumer marketplaces such as the iTunes App Store and Google Play. Another sector considered for the Caribbean is “big data” analysis. This area holds significant potential for growth in coming years, but the Caribbean, which is generally considered to be a datapoor region, currently lacks a sufficient base of local customers to form a competitive foundation for such an industry. While a Caribbean big data industry could plausibly be oriented toward outsourcing, that orientation would limit positive externalities from the sector, and benefits from its establishment would largely accrue only to a relatively small number of direct participants in the industry. Instead, development in the big data sector should be twinned with the development of products to build a regional customer base for the industry. The region has pressing needs in areas such as disaster risk reduction, water resource management, and support for agricultural production. Development of big data solutions – and other technology products – to address areas such as these could help to establish niche industries that both support the needs of local populations, and provide viable opportunities for the export of higher-value products and services to regions of the world with similar needs.

An assessment of the economic impact of climate change on the coastal and human settlements Sector in Barbados

This study assesses the potential economic impact of climate change on coastal human settlements in the Caribbean, with specific reference to Barbados, and evaluates the costs and benefits of undertaking various adaptation strategies. The aim is to assist Caribbean territories in developing the strategies and capacity needed to deal with the potential impact of severe weather events that are anticipated to occur with increased frequency and intensity as a result of climate change. Some of the key anticipated manifestations of climate change for the Caribbean include elevated air and sea-surface temperatures, sea-level rise, possible changes in extreme events and a reduction in freshwater resources.This research focuses on how human settlements distributed along the coast of Guyana, especially those in low elevation coastal zones (LECZ)are affected by these impacts. Focusing on three potential transmission sources - sea-level rise, stronger storm hazards and increased precipitation – the study considers the vulnerability of populations in the LECZ areas and estimates the overall threat posed by climate change to coastal populations and infrastructure. Vulnerability to climate change (measured as exposed assets) was estimated for four emission scenarios as outlined by the Special Report on Emissions Scenarios (SRES), namely the A1, A2, B1 and B2 scenarios for the period 2010 to 2100 and as detailed by the Intergovernmental Panel on Climate Change (IPCC), using global circulation models (GCM) and storm surge hazard maps.

An assessment of the economic impact of climate change on the coastal and marine sector in Saint Kitts And Nevis

Owing to their high vulnerability and low adaptive capacity, Caribbean islands have legitimate concerns about their future, based on observational records, experience with current patterns and consequences of climate variability, and climate model projections. Although emitting less than 1% of global greenhouse gases, islands from the region have already perceived a need to reallocate scarce resources away from economic development and poverty alleviation, and towards the implementation of strategies to adapt to the growing threats posed by global warming (Nurse and Moore, 2005). The objectives of this Report are to conduct economic analyses of the projected impacts of climate change to 2050, within the context of the IPCC A2 and B2 scenarios, on the coastal and marine resources of St. Kitts and Nevis (SKN). The Report presents a valuation of coastal and marine services; quantitative and qualitative estimates of climate change impacts on the coastal zone; and recommendations for possible adaptation strategies and costs and benefits of adaptation.

An assessment of the economic impact of climate change on the coastal and marine sector in the British Virgin Islands

Owing to their high vulnerability and low adaptive capacity, Caribbean islands have legitimate concerns about their future, based on observational records, experience with current patterns and consequences of climate variability, and climate model projections. Although emitting less than 1% of global greenhouse gases, islands from the region have already perceived a need to reallocate scarce resources away from economic development and poverty reduction, and towards the implementation of strategies to adapt to the growing threats posed by global warming (Nurse and Moore, 2005). The objectives of this Report are to conduct economic analyses of the projected impacts of climate change to 2050, within the context of the IPCC A2 and B2 scenarios, on the coastal and marine resources of the British Virgin Islands (BVI). The Report presents a valuation of coastal and marine services; quantitative and qualitative estimates of climate change impacts on the coastal zone; and recommendations of possible adaptation strategies and costs and benefits of adaptation. A multi-pronged approach is employed in valuing the marine and coastal sector. Direct use and indirect use values are estimated. The amount of economic activity an ecosystem service generates in the local economy underpins estimation of direct use values. Tourism and fisheries are valued using the framework developed by the World Resources Institute. Biodiversity is valued in terms of the ecological functions it provides, such as climate regulation, shoreline protection, water supply erosion control and sediment retention, and biological control, among others. Estimates of future losses to the coastal zone from climate change are determined by considering: (1) the effect of sea level rise on coastal lands; and (2) the effect of a rise in sea surface temperature (SST) on coastal waters. Discount rates of 1%, 2% and 4% are employed to analyse all loss estimates in present value terms. The overall value for the coastal and marine sector is USD $1,606 million (mn). This is almost 2% larger than BVI’s 2008 GDP. Tourism and recreation comprise almost two-thirds of the value of the sector. By 2100, the effects of climate change on coastal lands are projected to be $3,988.6 mn, and $2,832.9 mn under the A2 and B2 scenarios respectively. In present value terms, if A2 occurs, losses range from $108.1-$1,596.8 mn and if B2 occurs, losses range from $74.1-$1,094.1 mn, depending on the discount rate used. Estimated costs of a rise in SST in 2050 indicate that they vary between $1,178.0 and $1,884.8 mn. Assuming a discount rate of 4%, losses range from $226.6 mn for the B2 scenario to $363.0 mn for the A2 scenario. If a discount rate of 1% is assumed, estimated losses are much greater, ranging from $775.6-$1,241.0 mn. Factoring in projected climate change impacts, the net value of the coastal and marine sector suggests that the costs of climate change significantly reduce the value of the sector, particularly under the A2 and B2 climate change scenarios for discount rates of 1% and 2%. In contrast, the sector has a large, positive, though declining trajectory, for all years when a 4% discount rate is employed. Since the BVI emits minimal greenhouse gases, but will be greatly affected by climate change, the report focuses on adaptation as opposed to mitigation strategies. The options shortlisted are: (1) enhancing monitoring of all coastal waters to provide early warning alerts of bleaching and other marine events; (2) introducing artificial reefs or fish-aggregating devices; (3) introducing alternative tourist attractions; (4) providing retraining for displaced tourism workers; and (5) revising policies related to financing national tourism offices to accommodate the new climatic realities. All adaptation options considered are quite justifiable in national terms; each had benefit-cost ratios greater than 1.