{"id":263696,"date":"2021-09-23T10:31:34","date_gmt":"2021-09-23T14:31:34","guid":{"rendered":"https:\/\/content.carib-export.com\/diversification-paves-way-to-global-trade-in-caribbean\/"},"modified":"2022-06-12T22:17:37","modified_gmt":"2022-06-13T02:17:37","slug":"diversification-paves-way-to-global-trade-in-caribbean","status":"publish","type":"post","link":"https:\/\/content.carib-export.com\/nl\/blog\/diversification-paves-way-to-global-trade-in-caribbean\/","title":{"rendered":"Diversificatie effent de weg naar wereldwijde handel in het Caribisch gebied"},"content":{"rendered":"
<\/div>\n

A few weeks ago, Deodat Maharaj, Executive Director of the Caribbean Export Development Agency (CEDA), published an op-ed<\/a> calling for greater support for micro, small and medium-sized enterprises (MSMEs) in the region. The article is the latest call from Caribbean Export and various Caribbean stakeholders to advance the diversification of local economies to reverse the negative effects of the Covid-19 pandemic.<\/p>\n\n\n\n

\u00e2\u20ac\u0153The data speaks for itself, not only when we look at the reduction of our collective GDP<\/a> over the last year but also in terms of the massive debt the region faces. Countries that were already highly indebted, today are presented with larger debt commitments. We need to rethink which economic actors we should bet on in order to move forward,\u00e2\u20ac\u009d said Maharaj in an exclusive recent interview with Nearshore Americas.<\/p>\n\n\n\n

For Maharaj, supporting MSMEs with financing, resources and stimulating policy frameworks is an obvious choice, considering that across the Caribbean, MSMEs are already a significant force.<\/p>\n\n\n\n

\u00e2\u20ac\u0153MSMEs represent between 70-85% of Caribbean businesses and contribute between 60-70% of the region\u00e2\u20ac\u2122s GDP. Critically, they account for an estimated 50% of total employment,\u00e2\u20ac\u009d Maharaj noted in his op-ed.<\/p>\n\n\n\n

The Role of Government in Building MSMEs<\/h3>\n\n\n\n

Caribbean MSMEs are in a particularly difficult position at the moment. Lack of access to financing as well as plunging demand has forced them to lay off workers and presented new problems in maintaining the capital and liquidity to survive the Covid-19 crisis. Many MSMEs in the Caribbean operate in the tourism sector, which was decimated by the complete shutdown of global travel and is only now beginning to recover.<\/p>\n\n\n

\n
\"Deodat<\/figure>\n<\/div>\n\n\n

\u00e2\u20ac\u0153We\u00e2\u20ac\u2122ve seen how fragile and susceptible the tourism industry<\/a> is to specific events such as natural disasters and geopolitical developments. Many jobs and workers are at risk <\/a>whenever changes of this kind occur,\u00e2\u20ac\u009d Maharaj explained. \u00e2\u20ac\u0153That\u00e2\u20ac\u2122s why governments should incentivize a transition to services, knowledge and premium products in our export portfolios.\u00e2\u20ac\u009d<\/p>\n\n\n\n

\u00e2\u20ac\u0153MSMEs represent between 70-85% of Caribbean businesses and contribute between 60-70% of the region\u00e2\u20ac\u2122s GDP\u00e2\u20ac\u009d \u00e2\u20ac\u201d Deodat Maharaj<\/span><\/strong><\/p><\/blockquote>\n\n\n\n

Maharaj believes that MSMEs need an integrated approach and support based on a coherent strategy. That means increasing access to grant financing, in which Caribbean Export has taken the lead<\/a>, as well as promoting new initiatives to tackle the longer-term challenges that MSMEs will face in adapting to the post pandemic landscape.<\/p>\n\n\n\n

For Maharaj, the role of government is to create an environment that enables this job-supporting sector to sustain itself in the long term. But so far, almost all measures introduced by governments have focused on short-term survival rather than future growth. These measures have included improving liquidity through postponement of payments, reduction in government fees and loan-guarantee programs.<\/p>\n\n\n\n

New Technology and Services Exports<\/strong><\/h3>\n\n\n\n

MSMEs thrive when they are integrated into global value chains. But the pandemic disrupted supply chains and international trade, and MSMEs usually don\u00e2\u20ac\u2122t have the resources to rebuild the broken connections on their own. Without support, the region\u00e2\u20ac\u2122s small businesses will remain outside of global trade ecosystems.<\/p>\n\n\n\n

\u00e2\u20ac\u0153Putting MSMEs\u00e2\u20ac\u2122 international potential at the heart of national export strategies is critical,\u00e2\u20ac\u009d said Maharaj.<\/p>\n\n\n\n

\u00e2\u20ac\u0153However, we should remember that the Caribbean can\u00e2\u20ac\u2122t mass produce: we don\u00e2\u20ac\u2122t have the skills of China, India or even Latin American countries such as Mexico. We need to focus on niche markets<\/a>, niche products and premium prices. That is where we can compete, and in that context, pivoting to new technology and services exports will give us an edge,\u00e2\u20ac\u009d he added.<\/p>\n\n\n\n

Though the Caribbean\u00e2\u20ac\u2122s economic challenges have grown thanks to the pandemic, technology is offering a path forward. There are emerging opportunities for the region, as companies worldwide use technology to explore ways to reposition their value chains and reallocate their various goods and services components to serve their primary markets better.<\/p>\n\n\n\n

\u00e2\u20ac\u0153Technology has a democratizing effect. We often talk about commodities but we have to start talking more about applying new technology to globally position our MSMEs in the services sector. We need to monetize talent and the region\u00e2\u20ac\u2122s knowledge in professional services, but also in the creative sector like animation. When we look at the progress being made in this area, it brings a lot of hope,\u00e2\u20ac\u009d Maharaj said.<\/p>\n\n\n\n

\u00e2\u20ac\u0153Countries in the region should adopt policies to stimulate innovation through digitalization and technology that aid capital investment. The region should provide last-mile connectivity and capitalize on the global services sector\u00e2\u20ac\u2122s export potential. Aside from general information technology infrastructure, the region must ensure adequate access to equipment and capacities at the company level to reap the benefits of digital advancement,\u00e2\u20ac\u009d he added.<\/p>\n\n\n\n

\u00e2\u20ac\u0153Countries in the region should adopt policies to stimulate innovation through digitalization and technology that aid capital investment\u00e2\u20ac\u009d \u00e2\u20ac\u201d Deodat Maharaj<\/span><\/strong><\/p><\/blockquote>\n\n\n\n

Clearly, knowledge-based service MSMEs are in a unique position to benefit from the opportunities that arise from the pandemic. As Maharaj pointed out, the Caribbean presents interesting opportunities for global companies in such niche areas as animation, and market demand for animation services has increased from both the traditional business and film industries. As a result, countries including Jamaica have implemented training initiatives to elevate their human talent in this area.<\/p>\n\n\n\n

Despite the potential of technology to support MSMEs, many small business owners don\u00e2\u20ac\u2122t have the skills to take full advantage of digital platforms. The region\u00e2\u20ac\u2122s governments need to plug this knowledge gap in order for MSMEs to capture these opportunities, Maharaj suggests.<\/p>\n\n\n\n

\u00e2\u20ac\u0153Institutionally we need to ensure that there are regional and national initiatives<\/a> to support them while connecting them with larger investors. That is work for the future,\u00e2\u20ac\u009d he said.<\/p>\n\n\n\n

This article which was written by Bryan Ch. Campbell Romero, the Investment and Policy Editor, and originally published on Nearshore Americas.<\/a><\/em><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

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