Economic Policies in Small Open Economies

Prospects for the Caribbean

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This study deals with some of the major issued discussed at a symposium entitled “Small States: Problems and Opportunities in a World of Rapid Change”, which was held in March 1991 in St Kitts and Nevis. The symposium focused on the special problems confronting the management and development of small states’ economies.

The study, prepared by Delisle Worrell, Deputy Governor of the Central Bank of Barbados, argues that the economic adjustment strategies adopted by many Caribbean economies in the 1980s were in appropriate in trying to restore external balance and raise economic output. The analysis pays particular attention to the economic adjustment strategies of Barbados, the Dominican Republic, Guyana, Jamaica and Trinidad and Tobago. To improve the performance of Caribbean economies, the author calls for a better mix of stabilisation policies with a deliberate export promotion strategy.



The Caribbean in the World Economy

The prospects for Caribbean countries depend on the evolution of their terms of trade, on the way economic fluctuations in industrial economies affect their export markets, on the trends in international investment flows, on the availability of new free trade opportunities, on the proliferation of trade restrictions for particular products and on the terms of borrowing. For heavily indebted countries, the future also hangs on the extent of debt relief that they may obtain. These issues are explored in this chapter.


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