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

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)"

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.

The tourism sector and the global economic crisis: development implicatins for the Caribbean

Over the past two years the global economy has experienced substantial economic turmoil, resulting in severe economic contraction. While there has been a recent return to growth, this situation has impacted all economic sectors worldwide. In the highly tourism-dependent region of the Caribbean, the impact of the global economic crisis has been most notable on the tourism sector, which, from the early 1990s, became the key driver of economic growth for the region. The eventual emergence of this sector reflects an economic development history which was previously underpinned by the export of agricultural commodities, and subsequently by the adoption of the import substitution industrialization model as promulgated by Arthur Lewis. This was further stimulated by spectacular economic contraction in Caribbean economies during the 1980s as a result of changes in the global terms of trade for commodities, generally low levels of competitiveness for manufactured goods, as well as weak institutional and governance frameworks. Ultimately, many economies began to reflect fiscal and balance of payments constraints. By the end of the 1990s, too, evidence of declining competitiveness even in the tourism sector began to become apparent particularly when evaluated under the framework of the Butler Tourism Area Life- Cycle (TALC) model. The recent economic crisis, therefore, provides an opportunity to reflect on the overall approach to economic development in the Caribbean, and to assess the implications of the region’s response to the crisis. This analysis makes the case for the future development of the sector to be based on two broad strategies. The first is to deepen the integration of the tourism sector into the broader economy through the diversification of the regional tourism product, as well as the enhancement of linkages with other sectors, while the second is to expand the tourism sector into a total service economy through the introduction of new services. Considering linkages, the development of clusters and value chains to support the tourism sector is identified with respect to agriculture and food, handicraft, and furnishings. Among the new services identified are education, wellness, yachting and boating, financial services, and information and communications technologies (ICT). This overall strategy is deemed to be better suited to the macroeconomic realities of the Caribbean, where high labour costs and other structural rigidities require a high-valued specialty tourism product in order to sustain the sector’s global competitiveness.

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

Transitional fiscal costs and demographic factors in shifting from unfunded to funded pensions in Latin America

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

Labour costs and competitiveness in the Latin American manufacturing sector, 1990-1998

Includes bibliography

Pension funds, the financing of transition costs and financial markets development: lessons from the Chilean privatization reform

Includes bibliography