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What’s the background?
The Caribbean countries have traditionally had strong ties with Europe and North America. But the balance of economic power around the world is shifting fast and that means countries such as T&T have to focus on where they intend to develop trading links to secure the best future economic outcomes. That shift in economic power also comes along with a shift in value propositions because many of the areas in the world with the greatest potential over the next few years have different norms and values compared to those we are used to dealing with. But, in a way, they are also generally more closely related to the ethnic roots and mix in the Caribbean. Here are a few things to think about.
The ‘old countries’
If we look at the GDP growth rate projections for 2012, the EU is expected to show only 0.2% or so growth. Even the European economic powerhouse, Germany, is expected to see GDP growth drop from nearly 3% in 2011 to around 0.1% in 2012. The UK growth rate is expected to be around 0.2% in 2012. The USA is expected to be a little stronger showing nearly 2% GDP growth in 2012.
What about the big emerging markets?
The contrast is quite stunning. Forecasters project GDP growth in China during 2012 to be slightly lower than in 2011 but still over 8%. The rate for India in 2012 is forecast to be close to 2011 levels at around 7.5%. Brazil, now the world’s sixth largest economy, is expected to grow at around 3.6% in 2012.
What about in our neighbourhood?
In the Caribbean, the forecast GDP growth rates for 2012 range from a low 0.5% for Barbados, 1% for both Jamaica and Trinidad and Tobago, up to higher rates of 4.0% for Guyana and 4.5% for Suriname. Looking a bit further afield into Latin America, the projected GDP growth rates for 2012 include 4.4% for Columbia (rising to 4.8% from 2013 onwards), 5.1% for Panama (rising to 6% in 2013), 5% for Peru, 4.5% in Argentina, and 4.7% in Chile.
What about Africa?
Some African countries are really starting to grow now and not all of that is due to discoveries of oil and gas. Check out these forecasts for 2012:
- Botswana - 7.1%
- Angola - 10.8%
- Côte d’Ivoire - 8.3%
- Ghana - 7.5%
- Rwanda - 7.0%
- Zambia - 6.7%
- Kenya - 6.0%
- Uganda - 5.7%
What does this mean for T&T?
Whilst 1 - 2% in growth in a large economy represents a huge dollar value increase, the fact is that the fastest growth rates are happening in Asia, parts of Africa, and Latin America - in spite of the economic uncertainties the world currently faces. Many of those uncertainties relate to the fact that a number of 'old' economies have borrowed heavily to maintain their wealth and economic base. But now it is payback time. It may take many decades for that to happen in some countries. We need to be developing new value propositions for new markets in the parts of the world where there are rapid growth opportunities. We are fortunate to have cultural and ethnic links to a significant number of those markets. That should enable us to better understand what types of value propositions are likely to be the most advantageous.
Useful links:African growth forecasts Botswana GDP growth
Key question: How can we better capitalize upon some of the natural advantages, other than oil and gas, we have as a country?
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