In my last article I had drawn attention to the work of Esteban Perez on the performance of those export sectors receiving preferences in the Caribbean and Central American regions.
Last week the organisation he is attached to, the United Nations Economic Commiss-ion for Latin America and the Caribbean (UNECLAC), in-vited me to a two-day Expert Group Meeting at its sub-regional headquarters in Trinidad to consider the work of Perez and his group, which focuses on preparations for external negotiations in the Caribbean.
It was one of the richest and most rewarding research meetings I have attended. This was due largely to the type of research work Perez and his group are embarked upon and the excellent quality of it.
Because of this and its timeliness, I will use this week's contribution to draw reader's attention to two other important aspects of this work coming out of UNECLAC, apart from the analysis of the performance of the region under preferential arrangements, to which I have already drawn attention.
A remarkable trade indicators database
Perhaps the most long-lasting aspect of the Expert Group Meeting may well turn out to be the positive welcome, support and encouragement everyone gave to Perez and UNECLAC for preparing and presenting for discussion its Merchandise Trade and Transportation Database, which is expected to go online shortly.
This database covers 16 Caribbean countries: 13 Caricom members along with the British Virgin Islands, Aruba, and the Netherlands Antilles.
The database has been designed to cater for users at three levels, namely, the general user (including students); investors and firms wishing to undertake market research; and, trade officials and analysts in the public, private, and university sectors.
The remarkable feature of this database is the indicators it provides.
Apart from the usual trade values and volumes by detailed items (and in aggregates) along with the value of trade taxes collected, there are also a number of other statistical calculations, which are made available in the database.
To cite a few examples: data are provided on the coverage ratio, the import and export concentration ratios, and comparative advantage indicators (measured by a specialization index and constant shares analysis, which decompose imports into a share effect, demand effect, structural effect, and interaction effect).
There are also specific intra-regional trade indicators, including intra-regional indexes of trade intensity, trade orientation, trade prevalence, and propensity to trade intra-regionally.
From this brief description one can see that by any standards the database is of inestimable value for trade negotiators and firms engaged in, or affected by, the complex global external trade changes, which are now underway in the region.
Indeed I would go further and claim that negotiators and firms not in possession of these data or their equivalent would be severely handicapped in keeping up with the rapidly changing external environment, and thus would find themselves unable to effectively protect their interests.
The database project was carried out with the support of the Directors of Statistics in the participating countries. As of June this year the database had already covered the period 1995-2001. When online this will be updated regularly.
Given the substantial role of national statistical organisations in contributing to this remarkable effort it is surprising that there has been little or no regional and local publicity given to this remarkable endeavour.
Enigmas in Caribbean
economy
Mr Perez's work makes strong use of the measurement based of macro-economic inter-relationships. Indeed the first two presentations at the Expert Group Meeting examined papers on the 'macro-economic context of regional free trade agreements' and the 'quality of international insertion and competitiveness in the Greater Caribbean.'
The latter paper made use of two other important online databases developed earlier by UNECLAC, which readers need to be made more aware of. These are the computerized programmes providing the 'competitive analysis of nations' (CAN) and the 'module to analyse the growth of international commerce' (MAGIC). I would like to share with readers a few of the very interesting revelations in these studies.
The author begins by asking the important question: should trade liberalisation in the region precede a healthy macro-economic situation?
The conclusion arrived at is basically no, for the main reason that the initial macroeconomic conditions of a country shape the benefits that country could obtain from trade liberalisation.
In most of the Caribbean, and Guyana in particular, trade liberalisation has taken place, and continues to do so, in the context of a macro-economic environment marked by low or stagnant growth, high income and price volatility, significant macro-economic imbalances, declining foreign investment, and for countries like Guyana, a massive external and internal debt problem.
For the Caricom region, real GDP growth declined from 2.7 per cent per annum in the 1980s, to 1.8 per cent in the 1990s.
In Guyana we have had an exceptional rate of growth of 7 per cent per year between 1991-97, falling to less than 0.5 per cent per year between 1998-2002.
The reported data also show that although the share of the intra-regional trade in total trade has increased over the past 20 years, it still remains highly concentrated in a few countries (eg, Trinidad and Tobago and Guyana) and in a few products (eg, oil, rice and sugar). For that matter the performance of individual members instead of converging at similar rates of growth and living standards, has in fact resulted in widening gaps.
In this situation it is not surprising that we had earlier observed the region's share of markets in which it has preferential access has declined, while for those in which it does not enjoy preferences it has grown. Thus in year 2000 its share of the US market was half that of a decade earlier in 1990.
Enough has been said to give readers some idea of the work coming out of UNECLAC.
While many of the conclusions will be debated for some time to come, it is testimony to the intellectual stimulation that the present international environment offers, despite its ominous and threatening character.