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September 2011 |
Prof Briguglio’s presentation began looking at structures, dependence on international trade, and growth rates and the impact of the recession on Caribbean Small States, and then explored the concept of economic vulnerability and resilience. He outlined a framework for the measurement of economic resilience, which he developed in collaboration (Cordina, Vella and Farrugia) in 2006, where they constructed a resilience index, consisting of four broad components: macroeconomic stability; microeconomic market efficiency; good governance (and good institutions); and social development. “Good governance is essential for an economic system to function properly and hence to be resilient. Governance relates to issues such as rule of law and property rights. Without mechanisms of this kind in place, it would be relatively easy for adverse shocks to result in economic and social chaos and unrest. Hence the effects of vulnerability would be exacerbated. On the other hand, good governance can strengthen an economy’s resilience,” he said. He presented an index of good governance, which had been modified from the Economic Freedom of the World Index with an additional component apart from those covering judicial independence; impartiality of courts; the protection of intellectual property rights; military interference in the rule of law; and political system and the integrity of the legal system. His collaborators have included institutions and soundness of the banking system. “Social development is another essential component of economic resilience. This factor indicates the extent to which relations within a society are properly developed, enabling an effective functioning of the economic apparatus without the hindrance of civil unrest. Social development can also indicate the extent to which effective social dialogue takes place in an economy, which would in turn enable collaborative approaches towards the undertaking of corrective measures in the face of adverse shocks,” he said. Prof Briguglio outlined some aspects of their resilience index and country categorization which revealed that “countries which fall in the ‘best-case’ quadrant are mostly the large developed countries; countries which fall in the ‘self-made’ quadrant include a number of small states with a high vulnerability score, including Malta; countries which fall in the ‘prodigal-son’ quadrant include mostly large third world countries; and countries which fall in the ‘worst-case’ quadrant include a few vulnerable small countries with weak economic governance.” Confessing that they did not have “much data” on the resilience scores of Caribbean Small States, Prof Briguglio noted that they only had for six countries, and “according to our updated calculations” he concluded that “Bahamas, Barbados, Belize, Trinidad and Tobago (but marginally) would fall in the self-made category – very vulnerable and somewhat resilient; Jamaica and Guyana would fall in the worst cast category – very vulnerable and not sufficiently resilient.” He however warned that “these results should be interpreted with some caution.” |
Professor Lino Briguglio of the University of Malta, presented a guest lecture at the St. Augustine Office of the Campus Principal on September 12, which was titled, “Economic Vulnerability and Resilience in the Caribbean Small States.”