The Caribbean region is of special interest to the United States, with the major focus of this strategy being the English-speaking members of CARICOM. Within that group, some elements of the strategy will focus on states where USAID does not have bilateral programs, especially the six small states of the OECS. USAID’s current program represents a resumption of regional assistance after a hiatus from 1996 to 1999.
The existing strategy includes four strategic objectives in the areas of economic competitiveness, environmental management, improved legal systems, and response to the HIV/AIDS crisis. Most of the countries in the region have deep-rooted democratic institutions and score among the upper half of all countries in all or most measures of governance. However, governance remains a challenge, especially in the areas of accountability and rule of law.
The region as a whole has performed reasonably well economically, although with increasing gaps among countries and recent deterioration. Services, especially tourism, have been the main source of growth, while agriculture has been on the decline. In Jamaica and in the small eastern Caribbean states, fiscal deficits have become unsustainable and pose a risk to the stability of the region. The Caribbean islands give insufficient attention to land use planning and other measures to protect their natural assets, resulting in deteriorating environmental quality and natural disasters that set back development efforts.
There are significant variations in poverty levels, from a low of 13.9 percent in Barbados to over 50 percent in Haiti. Social indicators for most of the Caribbean are generally good, but one area of serious concern is HIV/AIDS, with a regional adult prevalence rate of 2.4 percent in 2002 surpassed only by sub-Saharan Africa. Another area of social concern throughout much of the region is youth-at-risk, evidenced in high teen fertility rates and poor school performance and high dropout rates for young men.
Major development challenges in the region are identified under three categories: vulnerability, governance, and human resources. Vulnerability is an issue in almost all development areas, with small size and open economies making the countries of the Caribbean highly vulnerable to external market conditions. They are particularly challenged now by trade liberalization and the need to compete in open markets. They depend economically on fragile natural resources while geography exposes them to natural hazards, including increased threats from climate change. Among the region’s social vulnerabilities is the serious HIV/AIDS epidemic.
Governance is a second area of challenge, with most of the islands lacking strong community-level governing institutions. Governments are unable to adequately update laws and regulations or to implement them. Accountability and control of corruption are also weak, and crime is a serious and growing problem throughout the region. Human resources are also a challenge, with generally good educational systems reflected in generally high literacy rates, but the educational system falling short in delivering the skills the region needs to be globally competitive.
The USAID Caribbean Regional Strategy for FY 2005-2009 is a sustainable development strategy that focuses limited resources on the two most urgent challenges facing the region – the challenge to compete in open markets and the challenge to control HIV/AIDS. A descriptive goal statement is: Caribbean region is globally competitive in trade and in quality of life. In order to thrive over the long run, the region must not only compete economically in global markets, but also retain and attract the human talent that will enable it to remain competitive.
The new strategy will include just two strategic objectives. The first strategic objective, Region positioned to succeed in an open trade environment, includes activities aimed at helping the region meet requirements to participate in open trade regimes, reduce business constraints, and leverage market opportunities, as well as strengthen the legal and environmental frameworks related to open trade. The possible need for a special objective to address weakness in the financial sector is noted.
For the second objective, focus on combating HIV/AIDS, also with implications for the region’s economic competitiveness, two options are presented. The preferred Option 2 is HIV transmission reduced in target countries in most-at-risk populations and impact of HIV/AIDS mitigated in the region. If funding constraints dictate a less ambitious program, the Option 1 SO statement is Enhanced Regional response to the Caribbean HIV/AIDS epidemic.
The projected five-year base program cost to USAID to achieve the strategic objectives is $81 million. If additional resources are available for Option 2, USAID could move from capacity building to combat HIV/AIDS to more activities that positively impact prevalence rates. The strategy aims to achieve substantial results with limited USAID resources through synergies among the activities, bundling activities under umbrella mechanisms, and using the Annual Program Statement mechanism to leverage ideas and resources from nongovernmental and private sector sources.