To best way to understand the how’s and the whys behind the decisions and strategies employed by Caribbean business leaders we have to first understand how they think and how they see the business world and economy in which they are forced to operate in.

Businessuite reviewed the 2013 annual reports for these business leaders and found that they by and large saw the world in much the same way. The following extracts best illustrate.

A Mixed Bag Of Economic Growth

“The mixed bag of economic growth evident in recent years continued into 2013 with developing countries on average recording noticeably higher growth rates than their developed counterparts. The International Monetary Fund (IMF) in its World Economic Outlook of October 2013 projects global growth of 2.9% for 2013 with growth of 4.5% for developing economies and 1.2% for advanced economies.

Europe’s struggles not only continued but intensified, with the region staring down and averting more than one crisis in the early part of the year.

The Euro area economy is expected to contract by 0.4% in 2013 and grow by 1% in 2014.

The UK is forecasted to grow in 2013 and 2014 by 1.4% and 1.9% respectively. Canada’s economy is set to expand by 1.6% and 2.2% in the corresponding periods. Economic activity in China is forecasted to grow by 7.6% in 2013 before moderating to 7.3% in 2014. Average GDP growth in Sub-Saharan Africa is likely to be 5% this year and 6% in 2014. The US economy is expected to expand by 1.6% this year before strengthening to 2.6% growth in 2014.”
Ronald F. deC. Harford
Chairman
Republic Bank Limited

Impacted By Challenges Facing European Countries

“The outlook for emerging markets is fair and although growth has slowed in some emerging markets, they seem only slightly impacted by the challenges facing the European countries. Other economies like the United Kingdom (“UK”) and the United States of America (“USA”) continue to show signs of improvement in job creation, stock market activity and overall economic growth as indicated by consistent stock market improvement over the last few years.
In China, a key market for Latin America’s commodity exports, growth is projected to decrease further to 7.25% in 2014 from 7.5% this year. Lower medium-term growth expectations for China have been a key contributor to the decline in commodity prices since the beginning of the year, although they remain at relatively high levels from a historical perspective.”
Mr. A. Charles Herbert
Chairman
Goddard Enterprises Limited

Enormous Flow Of Liquidity Led To Growth

“Over the last few years, the United States and the Western Government have dished out large stimulus packages also known as quantitative easing to spur their ailing economies. The enormous flow of liquidity led them into emerging markets and other countries, resulting in the growth of those economies.

Now the United States is planning to tighten the monetary policy, popularly known as the process of tapering and tightening. Tapering means gradual withdrawal of monthly stimulus and tightening would be in terms of raising the interest rates.

Countries like India and Brazil show signs of reversal and economic activities starting to moderate and policy responses becoming more dovish. The United States Dollar has strengthened significantly over the last six months as investors flock to safety of US Assets, among declining risk appetite and reduction of commodity prices since the start of 2012. The global economy grew by 2.5% in the first half of 2013 and it is projected to grow in the range of 3% to 3.5% in the second half of 2013.

The inextricable link between the Caribbean Region and the global economy continues to be the downfall of the region. The Caribbean Region will be significantly constrained by fiscal inflexibility and high levels of unemployment. The tourism dependent economies will continue to struggle.”
Yesu Persaud,
Chairman
Demerara Bank Limited

Global Growth Remained Relatively Robust And Inflation Low In 2013, While International Financial Markets Rallied, Driving A Recovery In Foreign Direct Investment (FDI).

World output grew by 3% in 2013, marginally below the 3.1% expansion recorded in 2012.

Growth continued to be driven by emerging and developing economies, as advanced economies decelerated slightly during the year.

Notably, growth in the United States (US) slowed from 2.8% in 2012 to 1.9%, reflecting the temporary government shutdown and issues relating to the raising of the debt ceiling in the latter part of the year.

Euro Zone economies remained in recession for the second consecutive year (-0.7% in 2012 and -0.4% in 2013). However, there were signs that domestic demand was on the rise in advanced economies and economic activity was sufficiently buoyant to support a reduction in unemployment rates – the US and UK in particular saw rates go down to levels not seen since late 2008.

Inflationary pressures also remained contained globally, as average oil and non-fuel commodity prices were 0.9 and 1.5% lower, respectively, than in 2012. Monetary policy in advanced economies therefore remained largely accommodative, although the US Federal Reserve, while keeping its policy rate low, initiated the so-called “tapering” of its open market operations toward the end of the year.

Reflecting the general buoyancy of economic activity, as well as a pick-up in financial markets, global FDI flows having fallen in 2012, are estimated to have increased by 11% in 2013, according to the United Nations Conference on Trade and Development (UNCTAD). BM

(Source CDB Annual Report 2013 – Volume One Our Caribbean Economies And Global Context)