Dr. Compton Bourne, president of the Caribbean Development Bank says regional tourism will see improved income flows from CWC 2007. - File

BRIDGETOWN, Barbados (CMC):

The Barbados-based Caribbean Development Bank (CDB) Tuesday reported strong economic growth among its borrowing member countries (BMC) last year and predicted improved performances in 2007.

The CDB said that the tourism industry is expected to get a bump in earnings from the Cricket World Cup to be held in the region from March 5 to April 28.

Construction may slow, however, said the donor agency, but not enough to erode other expected gains.

"While construction activity is projected to slow somewhat as a number of related cricket investment projects are completed, other public and private sector projects currently under way or about to commence will fill the slack in the short to medium term and the expected marketing benefits should drive visitor arrivals," said CDB president Dr. Compton Bourne.

But the financial institution has pointed to some areas within the tourism sector that were likely to affect the economy of the Carib-bean states in 2007.

"The industry is extremely sensitive to the quality of environmental management, and it is not always clear that environmental issues and the associated disaster management issues are being given the attention that is commensurate with the contribution of the industry to the economic and social well-being of countries," said Alan Slusher, director of economics and programmes at the bank.

Growing social instability

Slusher made reference to growing social instability, particularly the increase in violent crime across the region, and a rising disaffection, particularly among male youth, with education. "There is an increasing need for institutional arrangements to stimulate and motivate creativity in our societies, and to channel the resulting social energies into pathways which are productive," he said.

In a review of the region's economic performance in 2006, Bourne said the strong economic growth was led by expansion in tourism and construction, and supported by agriculture, business and financial services, as well as manufacturing.

In Trinidad and Tobago, petroleun-related activities was the major contributor to its economic growth.

That boom, however, plus rising food prices had pushed Trinidad into double digit inflation toward the end of 2006, but the rate fell back to single digit a month later.

"With the exception of Montserrat, where heightened volcanic activity led to a reduction in economic activity, indications are that all other BMCs exhibited growth in 2006, with high rates in Anguilla, Antigua and Barbuda, the British Virgin Islands, Trinidad and Tobago and the Turks and Caicos Islands," Bourne said.

Performed creditably

Following some moderation in 2005, the tourism industry performed "creditably" in 2006, said the CDB president, benefiting from a strong global economy, local marketing efforts and increased airlift.

The regional construction sector remained buoyant in 2006, fuelled by both public and private sector projects, and preparations for CWC.

The cricket competition "provided a considerable part of the impetus for activity during the year, although high levels of activity could also be traced to non-cricket- related business and tourism demand," said Bourne.

But he noted that the construction industry experienced difficulty last year, as a result of the inadequate supply of cement.

The agricultural sector also saw improvement in 2006 linked to favourable weather conditions unlike the previous two years, but the prospects for sugar cane remain uncertain in 2007, with traditional sugar production facing worsening export price prospects as a result of import regime changes in Europe.