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Montego Bay community college

Westmoreland and Montego Bay Campus

Caribbean Economic Development

In partial fulfilment of the

Bachelor of Science in Business Administration & General Studies Programme by

The Council of Community College (CCCJ)

By:

Sasheen Hines

Chantaye Jeffrey

Submitted to:

Mr Lorrel Garwood

Date:

November 25, 2023

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QUESTION 1

Explain the term sustainable development with reference to its three objectives.

The term sustainable development may be interpreted in various ways, it may be

described a development approach that seeks to create a balance between conflicting goals while

understanding the social, economic, and environmental constraints that our society faces.

Sustainable development may also be defined as development that proves to be sustainable while

satisfying current needs without jeopardizing the ability of future generations to satisfy their

needs.

One of the main tenets of sustainable development is respecting the constraints of the

environment, while it places great emphasis on preserving the environment, sustainable

development also prioritizes maintaining a robust, wholesome, and equitable society. This entails

providing for the many requirements of every individual in present-day and future communities,

encouraging individual well-being, fostering social inclusion and cohesiveness, and establishing

equitable opportunities. It should now become clear that the objectives of sustainable

development are economic, social and environmental.

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Economic Development:

Future generations' consumption requirements are at the center of sustainable

development. Ensuring a decent standard of living for current and future generations is the aim

of sustainable development, which means managing natural resources responsibly. The

foundation of a sustainable economy is the economic choices made by companies, customers,

and society as large. Sustainable economic growth is defined as balanced growth that isn't

predicated on depletion of resources or debt. The utilization of renewable resources and effective

recycling can lead to economic sustainability. Economic sustainable development refers to

balanced economic growth that is free from debt and excessive use of production inputs, as well

as initiatives that consider the environment's carrying capacity and the needs of future

generations. A sustainable and stable economy provides the basis for all other sustainable development.

Without a solid financial basis there is no way to pay wages, invest in the well-being of employees, or in

environmentally friendly development. A sustainable economy will also help to meet new challenges,

such as rising social security and health care costs due to aging populations. (Swain, 2021)

Social Aspect

Equal opportunity, achieving fundamental rights and basic living conditions, and

involvement in national and international decision-making are the goals of socially sustainable

development. Ensuring that the conditions for well-being are transmitted from one generation to

the next is the goal of social sustainability. Global concerns related to social sustainability

encompass topics such as gender equality, education, food, health, poverty, and population

increase. Social sustainability could be defined as the ability of the educational community to

function as a social entity and as well as a working and learning environment that is secure,

healthy, comfortable, and accessible. It is critical that staff and students' health, safety, and well-
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being are systematically taken care of. Effective social sustainable development is focused on the

goals of no poverty, no hunger, good health, gender equality, quality education and reduced

inequalities. (Swain, 2021)

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Sustainable Environmental Development

When the term "environmental sustainability" is used, it refers to the ethical management

of natural resources to ensure their continued availability. This entails preserving natural

resources from deterioration as well as minimizing their consumption. For instance, it is possible

to maintain freshwater by reducing excessive water use as well as by keeping contaminants out

of the water supply.

Education is a key component of sustainability. Many people don't know how to use their

resources properly, thus they don't. It is possible that a farmer is merely utilizing unsustainable

farming methods due to a lack of knowledge about sustainable methods. They can continue to

farm without endangering the quality of the soil in their fields if they are taught how to do it

sustainably through crop rotation. Their descendants will be able to farm similarly in the future.
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Evaluate three instruments that can be used by the government in its environmental

management.

Environmental management entails actions that reduce the influence of humans on the

environment. The primary goal is to establish and preserve environments that allow society and

the natural world to coexist. The environment is made up of all the elements, both living and

nonliving, that are essential to your survival. Because of this, it's critical to preserve the natural

order of your surroundings so that present and future generations can continue to live there.

Waste Management.

Since waste management lessens the damaging effects of human activity on the

environment, it is a crucial component of environmental management. Efficient waste

management techniques can lower the quantity of garbage produced, lower the chance of

pollution, and safeguard the environment and public health. Waste management is considered an

effective environmental management instrument as it assists us in conserving our natural

resources, reduces greenhouse gas emissions and reduces the overall disposal of waste.

Natural resources are conserved resources, such as water and land, and reduce the need for

new raw materials. Reducing the quantity of waste that is dumped in landfills, where it can

release methane gas, lowers greenhouse gas emissions. By drastically reducing the quantity of

garbage dumped in landfills and incinerators, effective waste management techniques can lower

the danger of pollution and save public health.

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Science and Technology.

Science and Technology is an effective tool for environmental management as it offers

creative answers to environmental problems, science and technology are essential to

environmental management. These techniques have several uses, ranging from environmental

monitoring and assessment to the creation of sustainable practices and the reduction of the

negative effects of human activity on the environment. Significant progress has been made in

understanding ecological processes, lowering pollution, protecting natural resources, and

advancing sustainable development because of the integration of science and technology in

environmental management.

Ecodevelopment

The purpose of ecodevelopment is to promote sustainable development while protecting the

environment by combining ecological and developmental objectives. It is regarded as a crucial

instrument for environmental management since it aims to reconcile ecological balance and

economic growth. Ecodevelopment places a strong emphasis on the need to safeguard

biodiversity, maintain natural resources, and advance sustainable practices. This method

promotes policies that enhance both environmental health and human well-being because it

acknowledges their connection.

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The Caribbean economies face many internal economic constraints to their economic

development. Outline and elaborate on four of these constraints and identify three useful

strategies that can be used deal with them.

The Caribbean is a diverse region with significant economic potential and growth

opportunities. Gross National Income (GNI) per capita varies from around US$800 to over

US$30,000 and most countries rely primarily on tourism, while some on commodity exports.

With its stunning scenery and vibrant cultures, the Caribbean is one of the world’s top tourist

destinations. Sustainable use of ocean resources, known as the “blue economy,” its offers

potential for economic diversification, while preserving the region’s environment, as well as

further development of other sectors with potential for growth (Gleaner 2022).

COVID-19 pandemic impact in the Caribbean resulted in GDP contraction by as much as

16-20 percent in some countries in 2020. As tourism returned, uneven recovery started in 2021

with average growth in the region recording 9.7 percent. Worsening global economic

environment in 2022 slowed the momentum and average growth in 2022 is estimated at 7.9

percent. As recovery continues, levels of debt to GDP started to trend down for most countries.

Rising price levels and challenging global environment pose significant challenges as countries

work to strengthen fiscal balances, revitalize growth and build resilience against natural disasters

and to help cope with climate change (Gleaner 2022).

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Building fiscal and financial resilience and investing in preparedness – be it physical,

health-related, or social safety nets – are critical to reducing the large human and economic costs

caused by climate change. the Caribbean also aims to develop new sources of economic growth

and high productivity jobs, which will require investing in people and climate adaptation,

improving the investment climate and connectivity, and safeguarding the environment (Gleaner

2022).

While Caribbean economies have made significant progress, the development path

remains fragile, arising not only from geographical features which are predisposed to severe

impacts from climate shocks, but also from the structure of the economies, quality of human

capital, and low levels of national savings which comport to relatively low factor productivity

and competitiveness. The ability to address these structural issues is constrained by high levels of

public debt, precipitated by some instances of weak fiscal policy management, with both factors

serving to further constrain the growth and development prospects of the Caribbean region. With

that being said The Caribbean is a region with great economic potential and growth

opportunities, but also faces many internal economic constraints that impede their development

(Enocho dev, 2022).

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Limited Diversification

Diversification is a risk management strategy that creates a mix of various investments

within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment

vehicles in an attempt to limit exposure to any single asset or risk. The rationale behind this

technique is that a portfolio constructed of different kinds of assets will, on average, yield higher

long-term returns and lower the risk of any individual holding or security. To have a limited

diversification is a strategy of investing in a relatively small number of different assets,

industries, or markets. It can be contrasted with broad diversification, which involves spreading

the investments across a wide range of asset classes, sectors, and regions (Karagiannis &

Mohammed, 2017).

For an economy operating at full potential, further production diversification will

necessarily mean diverting resources from existing uses so that they can be employed in new

sectors. For small economies, such as those in the Caribbean, this poses a serious problem. Most

Caribbean economies are too small to support more than a few key industries. Many Caribbean

economies are heavily dependent on a few sectors, such as tourism and agriculture, making them

vulnerable to external shocks and fluctuations in commodity prices (Karagiannis & Mohammed,

2017).

Strategy: Economic Diversification

• Encourage the development of new industries and sectors to reduce reliance on a narrow

economic base.

• Invest in education and training to develop a skilled workforce that can support a more

diverse range of industries.

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• Provide incentives for entrepreneurship and innovation to stimulate the growth of new

businesses and industries.

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High Debt Levels:

Caribbean countries have long been among the most indebted on earth, and related

vulnerabilities have slowed growth and poverty reduction across the region. High debt levels and

weak institutions and capacity for public financial management have held back growth, incomes,

and living standards for millions of people. The econometric model utilized in the paper has

shown that a one percent increase on debt to GDP ratio causes a 0.015 decline in real GDP

growth for the countries in the Caribbean panel, suggesting that debt has a pernicious effect on

growth on Caribbean economies. Caribbean economies did not demonstrate the traditional non-

linear (bell-shaped) effect of debt on growth, where there is a range in which a positive relation

between debt and growth exists. In contrast, at all levels, increases in debt resulted in a decline in

economic growth for Caribbean economies. Caribbean countries are also exceedingly vulnerable

to exogenous economic shocks, such as natural disasters, commodity price fluctuations, and

global financial crises, which can worsen their debt situation and hamper their development

prospects. Several Caribbean nations face high levels of public debt, which can constrain

government spending on critical development initiatives and create economic instability

(Karagiannis & Mohammed, 2017).

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Strategy: Debt Management and Fiscal Discipline

• Implement effective debt management strategies to reduce the burden of debt, such as

refinancing and renegotiating terms with creditors.

• Adopt fiscal discipline to control government spending and prioritize expenditures that

contribute to long-term economic development.

• Explore debt relief options and partnerships with international organizations to ease the

debt burden.
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Limited Access to Finance

A number of Caribbean countries have had to grapple with the weakness of public

financial management (PFM) frameworks. The general weakness of the region's institutional

framework is underscored by sub-par ranking on Government Effectiveness Index in the World

Bank's World Development Indicators. The index captures the quality and credibility of policy

and the quality of public service. Between 2005 and 2021, Caribbean economies placed in the

54th percentile, in line with the Latin America and Caribbean (LAC) average, but much less than

advanced economies, such as the US (Development, political, and economic difficulties in the

Caribbean 2022).

Although much improved in recent years, generally weak PFM frameworks across

Caribbean economies contributed to a decades-long record of poor fiscal and growth outcomes.

Based on the '2022 Global Report on Public Financial Management' published by the Public

Expenditure and Financial Accountability (PEFA) Secretariat, LAC economies perform

relatively poorly, with most Caribbean economies (for which data are available) scoring less than

2.5 (equivalent to a grade of C) out of a maximum of four points. The low PFM scores was

attributed largely to relatively weak transparency and credibility in the budgetary process, and

the absence of independent fiscal institutions and binding rules in relation to established fiscal

limits .Small and medium-sized enterprises (SMEs) in the Caribbean often struggle to access

financing, hindering their ability to grow and contribute significantly to the economy

(Development, political, and economic difficulties in the Caribbean 2022).

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Strategy: Financial Inclusion and Support for SMEs

• Enhance financial literacy programs to empower individuals and businesses to make

better use of financial resources.

• Establish or strengthen financial institutions that specialize in providing affordable credit

to SMEs.

• Foster an environment conducive to private investment by streamlining regulatory

processes and improving the ease of doing business.

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Weak Infrastructure:

Economic infrastructure refers to all the permanent engineering structures, equipment and

physical facilities that are the basis for providing energy, transport, telecommunications, water

and sanitation services to productive sectors and households. The efficient and timely provision

of this infrastructure has a positive effect on economic and social growth, and there are

interesting relationships between investment in infrastructure and improvements in social equity

(Admin, Caribbean countries face complex challenges to advancing on fulfillment of the 2030 agenda

2020).

The small island states have to be responding to repeated climatic shocks. Based on its

geographical location and experiences with natural disasters, the Caribbean is ranked as the

second most environmentally vulnerable region in the world and is thus likely to suffer

disproportionately as climate shocks become more frequent and severe. Against this background,

the main challenge for regional economies and policymakers is how to structurally adjust

economies so as to build greater resilience, thereby promoting sustained growth (Admin,

Caribbean countries face complex challenges to advancing on fulfillment of the 2030 agenda 2020).

Inadequate infrastructure, including transportation, energy, and telecommunications, can

impede economic growth and competitiveness.

Strategy: Infrastructure Development and Public-Private Partnerships (PPPs)

• Prioritize investments in critical infrastructure projects to improve connectivity and

efficiency.

• Explore public-private partnerships to fund and manage infrastructure projects,

leveraging private sector expertise and resources.

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• Implement policies that promote sustainable infrastructure development, taking into

account environmental and social considerations.

In addressing these constraints, it is essential for Caribbean nations to adopt a holistic and

coordinated approach, involving government, private sector stakeholders, and international

partners. Additionally, ongoing monitoring and evaluation mechanisms should be in place to

assess the effectiveness of implemented strategies and adjust as needed. Implementing these

strategies requires long-term planning, consistent policies, collaboration among stakeholders, and

possibly international partnerships to provide necessary expertise and resources (Admin,

Caribbean countries face complex challenges to advancing on fulfillment of the 2030 agenda 2020).
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REFERENCES

Swain, K. (2021, July 21). Economic Sustainable Development. Sustainable Development.

https://keke.bc.fi/Kestava-kehitys/english/economic-sustainable-

development/#:~:text=Economic%20sustainable%20development%20is%20balanced,the%

20environment%20and%20future%20generations.

Parks, J. (2022). What is sustainable development. What is sustainable development ·

Sustainable Development Commission. https://www.sd-commission.org.uk/pages/what-is-

sustainable-development.html

Environmental sustainability | definition, objectives & examples. (n.d.).

https://study.com/academy/lesson/environmental-sustainability-definition-and-

application.html