Go Lean…Caribbean

Go Lean Commentary

BRICS = Brazil, Russia, India, China, South Africa …

There are no “push-pull” factors luring Caribbean citizens to emigrate to these countries, (though Caribbean member-states Trinidad and Guyana have a majority population of Indian descent), but still it is very important for the stewards of the Caribbean economy to study the BRICS countries. We need to learn from their lessons, good-bad-and-ugly, and try hard to keep pace.

This global assessment is part of the technocratic activities needed in comparative analysis, essential and strategic in the effort to ensure the region remains competitive. This effort is inclusive of the publishers of the book Go Lean…Caribbean; it urges the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU). The book serves as a roadmap for the elevation of the region’s economy-security-governing engines; providing turn-by-turn directions to integrate the 30 member-states of the region and forge an $800 Billion economy.

A likely analogy would be navigating a vessel across a tumultuous ocean. As a humorous depiction, subject matter experts joke that “an economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today”.

All joking aside, the incremental progress of one BRICS country, India, is not to be lambasted or readily dismissed. See this recent news article:

By: JO’s

MUMBAI – Investors have fallen out of love with emerging markets. Since the start of last year emerging-market stocks has trailed their rich-world peers. Currencies are falling. Worst-hit is the Russian Rouble, which has fallen by 30% against the Dollar this year. The currencies of other biggish emerging markets, such as Brazil, Turkey and South Africa, have also weakened. For such economies growth is harder to come by. The IMF recently cut its forecasts for emerging markets by more than for rich countries. But India is a notable exception to the general pessimism. Its stock market has touched new highs. The Rupee [currency] is stable. And the IMF nudged up its 2014 growth forecast for India to 5.8%. That figure is still quite low: growth rates of 8-9% have been more typical. But in comparison with others it is almost a boom. Why is India doing better than most emerging markets?

In part optimism about India owes to its newish government. In May Narendra Modi’s Baratiya Janata Party (BJP) won a thumping victory in elections on a pro-growth platform. Since then the BJP has strengthened its position in some key states. So far reform has been piecemeal. Procedures for government approvals have been streamlined. The powers of labour inspectors have been curbed. Civil servants now work harder. That has been enough to sustain hopes of further and bigger reforms. Yet much of the continued enthusiasm about India is down to luck. The currents that sway the global economy presently—the dollar’s strength; slowdown in China; aggressive money-printing in Japan; stagnation in the Euro Zone and falling oil prices—are less harmful to India than to most emerging markets.

Start with the dollar, which has been buoyed by a resilient American economy and the prospect of interest-rate increases by the Federal Reserve. Past episodes of rising interest rates and dollar strength (for instance in the early 1980s or mid-1990s) have not been kind to emerging markets. Bond yields rise and currencies fall as capital is drawn back to America. India has a bit less to fear from such a rush to the exits; its bond markets are tricky for foreigners to enter in the first place. India is less harmed by slowdown in China, as only around 5% of its exports go there. It is not part of the China’s supply-chain that takes in much of Southeast Asia. Nor is it a big exporter of industrial commodities, like Brazil. Equally a weaker yen in response to quantitative easing by the Bank of Japan hurts Asia’s manufacturing exporters more than service-intensive India. The misery in the Euro Zone is of greater concern to its local trading partners in Turkey and Russia than to faraway India. And the fall in the crude prices that hurts oil exporters, such as Russia and Nigeria, is a boon to a big oil importer like India. Indeed the deflation that is stalking large parts of the world is helpful to India, which has suffered from high inflation.

India is not impervious to bad news. Some of its recent economic data have looked a little soggy. Exports slumped in October. Car sales have fallen for two consecutive months and there is little sign yet of a meaningful recovery in business investment. This is in part why there have been growing calls (including from the finance minister) for the central bank to cut interest rates soon in response to a drop in consumer-price inflation. The troubles in other emerging markets ought to counsel caution. Any sign that policymakers might be ditching discipline in favour of quick fixes might see India crossed off the love list.
The Economist Magazine – Online Edition – November 18, 2014 –
http://www.economist.com/blogs/economist-explains/2014/11/economist-explains-11

Other BRICS countries are struggling with growth, at this moment; see story here:

As emerging economies hit hard times, Brazil and Russia look particularly weak.

Considering the realities of the emerging economies, the BRICS countries, it is obvious that there is an ebb-and-flow associated with economic stewardship. This stewardship constitutes the prime directives of the CU:

• Optimization of the economic engines in order to grow the regional economy and create 2.2 million new jobs.
• Establishment of a security apparatus to protect the resultant economic engines.
• Improve Caribbean governance/administration/oversight to support these engines.

The best practice for effective stewardship of an economy’s ebb-and-flow is the recovery; managing the ability to “bounce back” quickly. This fact is related in the Go Lean book (Page 69), chronicling the experiences in the US when the economy lost $11 Trillion in the 2008 Great Recession, but recovered $13.5 Trillion back a few years later, by December 2012. The US has 50 member-states and 320 million people. Shocks and dips can therefore be absorbed and leveraged across the entire region .The Go Lean roadmap is to integrate the Caribbean in such a structure with 30 member-states and 42 million people.

At the outset, the roadmap identified an urgent need to contend with, since the Caribbean is still in the throes of the financial crisis (commenced in 2008).  This is pronounced in this clause in the opening Declaration of Interdependence (Page 13):

xxv.   Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.

The Go Lean roadmap signals change for the region. It introduces new measures, new opportunities and new recoveries. Economies will rise and fall, ebb-and-flow; the recovery is key. Currencies and inflation issues also factor in the economic stewardship. The foregoing article relates:

“the dollar … has been buoyed by a resilient American economy and the prospect of interest-rate increases by the Federal Reserve. Past episodes of rising interest rates and dollar strength … have not been kind to emerging (BRICS) markets”.

So the CU strategy also calls for the establishment of the allied Caribbean Central Bank (CCB) to manage the regional monetary and currency affairs. The Go Lean book describes the breath-and-width of the CCB. This stewardship of monetary-currency was envisioned and pronounced in the roadmap’s Declaration of Interdependence (Page 13):

xxiv.   Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

The CU roadmap drives change among the economic, security and governing engines. These solutions are as new community ethos, strategies, tactics, implementations and advocates; sampled as follows:

The Caribbean region needs to learn from the lessons of the BRICS countries, (see VIDEO below). and do the work, the heavy-lifting, to compete with them, and the rest of the world in trade and culture. The subject of trade empowerment has been directly addressed and further elaborated upon in these previous blog/commentaries:

The Caribbean is arguably the best address on the planet, but there are many deficiencies, as in jobs and economic empowerments. We have suffered as a result of these deficiencies, as a region losing a large share of human capital, one estimate of 70%, to the brain-drain.

No More! Change has now come to the Caribbean.

Shepherding the Caribbean economy is the job for technocrats, trained and accomplished from the battles of globalization and trade wars. This is the Go Lean roadmap. Everyone, the people and institutions are hereby urged to lean-in to this roadmap to make the Caribbean a better place to live, work and play. 🙂

Download the book Go Lean … Caribbean – now!

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VIDEO: BRICS to change world economy – http://youtu.be/wmS11HnNbk0

Published on Mar 28, 2012 – The BRICS countries’ leaders were preparing for their annual meeting in 2012. These countries make up 42 percent of the world’s population and a quarter of its landmass. They are also responsible for 20 percent of the Global GDP and own a whopping 75 percent of the foreign reserve worldwide. In these tough times for world economics these countries are trying to find a solution for the situation. RT America’s Correspondent Priya Sridhar (the US based arm of Russia Today, a 24-hour English-language international broadcast news network based in Miscow) gave a sneak peak of the summit from India.