Financing Development In The Commonwealth Caribbean

Examines the problems Commonwealth Caribbean countries face in financing development activities. The focus is on the four larger and more developed countries (MDCs) within the Caribbean Community, Barbados, Guyana, Jamaica and Trinidad and Tobago even though the less developed countries face similar problems.

This work examines the process of development financing through a comparison between some of the less-well-developed Caribbean countries and the More-Developed Commonwealth Caribbean countries of Barbados, Guyana, Jamaica, and Trinidad and Tobago. Hope analyzes the ways in which development financing has been undertaken in the Caribbean countries and draws conclusions about the growth process in general. He focuses primarily on analyzing the available data from the less and more developed Caribbean countries. He also examines the successes and failures of Caribbean development efforts and makes projections for the future.

Many Caribbean financial systems are relatively well developed for their size but benefits are concentrated in a small part of the population. In several large countries, the financial development levels are below what is warranted by that country’s own macroeconomic fundamentals. SMEs, in particular, remain severely credit constrained, and data to inform better analysis remains scarce. Using available data, this paper takes stock of the current state of financial development and inclusion in the Caribbean region and, based on a quantitative general equilibrium model, examines potential trade-offs between growth, inequality, and financial stability—all critical considerations when policies are designed. A case study for Jamaica is examined in detail.