By World Bank Group
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Additional resources for Caribbean Region: Current Economic Situation, Regional Issues and Capital Flows, 1992 (World Bank Studies)
Particularly in open economies, these sectors tend to be competitive, and enterprises subject to market discipline will exploit possible efficiency gains to avoid bankruptcy. Privatization of public utilities, which often are natural monopolies, has proven to be more difficult to undertake. A major issue is the provision of an adequate regulatory framework for their operation. However, a successful example of the potential benefits of the divestment of public utilities in many Caribbean countries has been the improvement in telecommunications services following their privatization.
In agriculture, prospects depend largely on the fate of the preferential trade agreements. Without them, agriculture will certainly shrink in many countries, even though there will be room for non-traditional crops to develop, as already is the case in countries which are not dominated by banana or sugar production. In spite of the difficulties ahead, overall prospects are promising provided appropriate policies are implemented. Toward Macroeconomic Stability viii. The Caribbean region is still among the more rapidly growing regions in the world.
The future of the preferential trade arrangements is also uncertain, but it is probable that for sugar the preferences will continue for some time. The situation with respect to bananas is more vulnerable, and the possibility of a ''banana shock" cannot be ignored. The preferences relating to garments appear to be the least vulnerable to significant change. In light of this, the Caribbean countries need to recognize that they have to become more efficient and fulfill the macroeconomic conditions that will enable them to compete in the changing world environment.
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