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World Bank urges Caribbean to ‘propel domestic engines of growth’

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Written by CBC NEWS Thursday, 18 April 2013 11:47

The World Bank has urged Latin America and the Caribbean (LAC) to “propel domestic engines of growth”, stating that the “formidable global tailwinds” that facilitated robust economic growth and social inclusion in the region over the past decade are receding.

In its latest semiannual report, “Latin America and the Caribbean as Tailwinds Recede: In Search of Higher Growth,” the World Bank’s Office of the Chief Economist for the region, said on Wednesday that a new global context of excess liquidity, slower growth in China, and sluggish economic activity and high public debt in the developed world, points to the need for the region to do more on its own “in order to go back to growth rates similar to those enjoyed in the past decade.”

The Washington-based financial institution said LAC is already expected to grow by 3.5 percent, an improvement from last year’s 3 percent, “but still below the 5 percent average before the 2008/09 crisis or the 6 percent in 2010.”

It said rates range from as low as 0.1 and 1.0 percent for Venezuela and Jamaica respectively, to 6 percent for Peru, nearly 9 percent for Panama, and above 11 percent for Paraguay.

Augusto de la Torre, the World Bank’s chief economist for the region, said while these growth rates are “good,” they are still “insufficient to sustain the recent pace of social progress” that the region experienced in the last decade.

“Accordingly, the policy emphasis is shifting from external to domestic engines of growth, and from macro and financial stability concerns to growth-enhancing reforms,” he said.

De la Torre said as global tailwinds subside, the ability of regional countries to grow above 3.5 percent “depends critically on themselves.”

The report says that answering the question of how can the region propel its domestic engines of growth starts with understanding the specificities of LAC’s growth pattern, its limitations, and its strengths.

It says that while much is said about South East Asia’s growth model – based on manufacturing exports, high savings, and competitive exchange rates – the region’s circumstances “stand already in sharp contrast with that.”

According to De la Torre the quest for export competiveness, based on cheap labor and undervalued exchange rates, “looks politically unfeasible and economically suboptimal.

“If competiveness beyond natural resource-intensive goods is to be developed, without sacrificing living standards, productivity is the name of the game,” he said.

The World Bank’s chief economist for the region noted that achievements in the 2000s have been “significant, including macroeconomic stability, solid growth, poverty reduction, and a fairer income distribution.”

But he said the challenge for economic policy going forward is to “preserve and build on past gains, consolidating the dividends of a socially inclusive growth, and doing so without the assistance of global tailwinds.”

ACCA question value of audits

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Written by CBC NEWS Thursday, 18 April 2013 11:35

The collapse of many companies during the global financial crisis resulted in questions being raised about the value of corporate audits.

This was one of the key issues discussed Wednesday during an Association of Chartered Certified Accountants' audit roundtable at the Hilton Hotel.

It was mentioned by ACCA deputy president Martin Turner during his address.

He noted that the International Auditing and Assurance Standards board last year established a wide-ranging review of the role of the audit, exploring options that would pay more attention to the needs of stakeholders.

Mr. Turner believes that adopting such an approach would mean not only changes for the process but also for the auditors.

IMF predicts 0.5% growth for Barbados

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Written by CBC NEWS Wednesday, 17 April 2013 17:32

The International Monetary Fund has predicted economic growth of 0.5 percent for Barbados this year.

This forecast in contained in the IMF's just released World Economic Outlook.

It has also said that Barbados will register economic growth of just one percent next year.

Earlier this month, Barbados' Central Bank governor Dr Delisle Worrell predicted that economic growth this year would be virtually flat.

ICAB concerned about Auditor General's report

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Last Updated on Tuesday, 16 April 2013 16:58 Written by CBC NEWS Tuesday, 16 April 2013 16:56

The immediate past president of ICAB Andrew Brathwaite has raised the red flag at one disclosure in this year's Auditor General’s report.

He says the Public Accounts Committee of Parliament has not been reviewing or acting on these reports.

Mr. Brathwaite says the committee is extremely important and must function adequately.

Chairman of the public sector committee at ICAB William Layne says Barbadians need to get their priorities in order.

The president of the Institute of Chartered Accountants wants to know why the two major contributors to GDP won’t be increasing that contribution this year.

David Simpson says this should not be happening given the island's vast experience in both tourism and the international business sectors.

He was speaking during a press conference at the institute's office Monday.

And it is on that note that Mr. Simpson says the cost of production is too high and continues to hamper the manufacturing sector.