In This Review

Unleashing Growth and Strengthening Resilience in the Caribbean
Unleashing Growth and Strengthening Resilience in the Caribbean
Edited by Trevor Alleyne, Inci Otker, Uma Ramakrishnan and Krishna Srinivasan
International Monetary Fund, 2017, 379 pp.

Despite their favorable geographic location and abundant natural resources, many Caribbean countries have fallen into a distressing trap of low growth and high external debt. In this book, a group of economists uncover several interconnected causes for the malaise: the high cost of energy, inadequate infrastructure, burdensome regulatory systems, and violent crime. Perhaps most damaging is a persistent brain drain, which has depleted the stock of highly educated workers. On the upside, remittances from émigrés often exceed direct investment and official development assistance. One particularly innovative chapter concludes that so-called economic citizenship programs, which allow wealthy foreigners to purchase citizenship and, in some cases, residency in Caribbean countries, provide significant benefits to the countries that offer them, despite the risk that they will be used to launder money. A concluding chapter argues that unleashing growth will require a combination of policies and greater regional coordination to avoid a “race to the bottom” (for example, by competing to offer tax breaks to foreign investors). Whether governments have the institutional capacity and political will to adopt and sustain the necessary reforms remains unclear.