Development Strategy Assessment of the Eastern Caribbean

Report

OECD Development Pathways

7 October 2022

3. Promoting human and social well‑being

Abstract

This chapter discusses key opportunities and constraints falling into the second pillar of the OECS Development Strategy: promoting human and social well-being. Persistently high unemployment rates, sticky levels of poverty and inequality, and the prevalence of crime, in particular among young people, all pose significant challenges in the OECS region. To reduce unemployment, and to provide young people with better opportunities, it is essential to close the skills gap in the region and to improve the quality of education. Better social-protection systems could support those in need and build the bedrock for more flexible labour markets. In addition to better opportunities for young people, reducing high levels of crime requires a stronger focus on crime prevention, as well as strengthening the region’s judicial systems and police forces. Finally, better and more prevention policies would be important to tackle high levels of NCDs in the region.

Tackling social challenges in the OECS region requires more and better economic opportunities, in combination with improved social protection systems, enhanced quality in education, and a closing of the skills gap. Persistently high unemployment rates, high levels of poverty and inequality, and the prevalence of crime, in particular among young people, all pose significant challenges. In order to reduce unemployment, and to provide young people with better opportunities, it is essential to close the skills gap through a larger and better offering of tertiary, vocational and adult education, plus better information on the skills that are in demand on the labour market. The quality of formal education could also be further improved through more and better trained teachers, and by focusing on the development of quality foundation skills. In addition, and in order to reduce unemployment and poverty, OECS countries require better social-protection systems, including universal healthcare and unemployment-insurance schemes. In order to reduce unemployment, another important step would be to pursue reforms that would align wages with productivity growth. In addition to better opportunities for young people, reducing high levels of crime requires a stronger focus on crime prevention, as well as strengthening the region’s judicial systems and police forces. Finally, better and more prevention policies would be important to tackle high levels of NCDs in the region. Table 3.1 represents six major opportunities for the region in terms of promoting human and social well-being.

1. Expand and improve the offering of tertiary, vocational and adult education in the OECS region

2. Improve information about the skills that are in demand in the labor market

3. Introduce universal health care and unemployment-insurance schemes in OECS countries

4. Introduce incentives for untrained teachers to acquire qualifications faster, plus mandatory pre-service teacher training, while also improving the image of the teaching profession

5. Ensure that students are equipped with high-quality foundation skills through formal education

6. Invest in policies for the prevention of NCDs such as awareness raising, measures to encourage more physical activity and appropriate legislation and regulation

3.1. Limited economic opportunities and structural challenges are contributing to persistently high levels of unemployment in parts of the OECS region

Unemployment is high in the OECS region, but levels vary between countries (Figure 3.1). Youth unemployment is particularly high (Figure 3.1, Panel B), and women and lower-skilled workers are more affected by unemployment (World Bank, 2018[1]). Unemployment rates have indeed been high in the OECS region since the early 1990s, before the banana industry declined across the region (with the exceptions of St. Kitts and Nevis and Antigua and Barbuda). Moreover, formal-employment-to-population ratios, which offer a proxy for unemployment, have fluctuated little over recent decades (Figure 3.2). This implies a significant level of structural unemployment and informality. It is indeed estimated that long-term unemployment accounts for 85% of unemployment in the OECS region (World Bank, 2018[2]). In addition, cyclical unemployment has increased in the wake of economic shocks, most importantly after the global financial crisis of 2008 and the recent COVID-19 pandemic (James et al., 2019[3]).

Figure 3.1. Unemployment is high in most countries in the OECS region, and young people are particularly affected

High unit labour costs in the region, which stem from labour-market rigidities and high public-sector wages, limit private investment and job creation (see section 2.7.3). High public-sector wages, which are out of line with growth in the productivity of labour, plus relatively high wages in the tourism sector, have pushed up the reservation wages of the entire population, putting pressure on wages throughout the economy. In particular, young people are less willing to perform the less well paid jobs that exist in agriculture or the informal sector (James et al., 2019[3]).

A skills mismatch, plus a shortage of technical and soft skills, are also contributing to unemployment, particularly among young people. Due to a shortage of skilled workers, and in particular in technical skills, employers even look to recruit skilled workers abroad in some cases (James et al., 2019[3]).

Furthermore, frequent natural disasters contribute to significant cyclical unemployment in the region. Indeed, cyclical unemployment tends to rise in the years that follow large natural disasters. The impact of natural disasters on employment is particularly acutely felt in countries with a larger agricultural sector, since agriculture is significantly affected by natural disasters (James et al., 2019[3]).

Moreover, informal employment is high in some OECS countries. The formal-employment-to-population ratio captures not only unemployment, but also different levels of informality across the OECS region. While St. Lucia has the largest informal sector in the region, informality is limited in St. Kitts and Nevis (Figure 3.2). Dominica, St. Vincent and the Grenadines, and Montserrat appear to have relatively large informal sectors.

Figure 3.2. Formal-employment-to-population ratios in the OECS region have been stable over time, reflecting structural challenges

Enhancing labour-market flexibility, creating social safety nets and limiting public sector wage growth could help reduce unemployment. As a mechanism of adjustment to the external shocks that may affect the OECS region, wage flexibility is important, as ECCU countries have a fixed exchange rate. To reduce labour costs and enhance wage flexibility, OECS countries must find a way to better align public-sector wage growth with productivity growth. Another important step would be to strengthen social safety nets, for example by introducing unemployment-insurance schemes, to create the pre-conditions for a more flexible labour market (James et al., 2019[3]).

In addition, countries in the region should focus on building up their resilience to natural disasters, and strengthening human capital. Resilience to natural disasters, including the resilience of the financial sector, and the overall capacity for speedy recoveries following natural disasters, could reduce spikes in unemployment in the aftermath of disasters. In particular, one important step forward would be to make the region’s agricultural sectors more resilient. One way to do this, for example, would be through improved and better access to agricultural insurance. In order to strengthen human capital, the skills gap in the region needs to be closed. In addition, strengthening human capital could enhance productivity and competitiveness, thereby fostering private investment and job creation (James et al., 2019[3]).

3.2. Expanding social protection systems in the OECS region could reduce poverty and tackle inequality concerns

3.2.1. Despite progress in poverty reduction, poverty rates and inequality remain relatively high in the region, given levels of income per capita

Poverty has been in decline, but inequality levels across OECS member states remain higher than in most other countries in their income group. To be sure, there have been impressive falls in poverty in the region, as highlighted by St. Lucia, whose poverty headcount ratio for people earning less than USD 5.50 per day dropped from 85% in 1995 to 20% in 2016 (World Bank, 2022[5]). Grenada has reported similar decreases with respect to its nationally-defined poverty estimates, registering a decline from 37.7% for 2005-08 estimates, to 25% in 2018-19 (Figure 3.3, Panel A). However, poverty is still high, and has even increased in St. Vincent and the Grenadines. Moreover, even the best-performing country in the OECS, Antigua and Barbuda, has an elevated poverty ratio, with 18.4% of the population falling below national poverty lines. Further to this, child poverty is very high, with 32.7% below the poverty line in the Eastern Caribbean Area, compared to a world average of 13% (OECS, 2020[8]). Inequality is similarly high, with the average GINI index value for the OECS coming in 12.7 points higher than the OECD average (Figure 3.3, Panel B). Over time, there has been only a limited reduction in inequality, which seems to remain much the same as it was a decade ago.

Figure 3.3. There has been progress towards poverty reduction in the region, yet both inequality and poverty remain high, given income per capita levels in OECS countries

Given the lack of consistent data, however, there are difficulties in ascertaining trends in poverty and inequality. Indeed, the last time that most of the OECS member states collected poverty data was more than a decade ago. Since that time, there have been many changes in the economic landscape of the region. Without concrete data, it is impossible to know what impact these changes have had, particularly on poverty rates. Efforts should be made towards a more regular collection and analysis of such data, in order that the impact of social protection policies may be accurately assessed.

3.2.2. While coverage varies from country to country, there is scope to expand social protection systems in all the OECS member states

During the COVID-19 pandemic, the coverage provided by social assistance programmes was lacking in some of the OECS member states. To be sure, the pandemic placed major pressure on social assistance programmes in almost every country worldwide. This was also true in the OECS, although some countries were better prepared than others. A report by the United Nations Children’s Fund (UNICEF) shows that the coverage provided by social assistance programmes, which are non-contributory schemes that provide assistance to vulnerable households through income support and similar measures, was quite high in St. Vincent and the Grenadines prior to the pandemic. This resulted in a level of coverage of almost 76% of the vulnerable population in St. Vincent and the Grenadines during the pandemic, the highest in the Eastern Caribbean (UNICEF, 2020[13]). That was, however, not the case for many of the other OECS member states, where at-risk populations would have greater difficultly in accessing social assistance because of the limited resources afforded to programmes. It is nevertheless important to note that at the onset of the COVID-19 pandemic, social assistance programmes in OECS member states were complemented by short-term income support programmes for a duration of three to six months for both, social security contributors and non-contributors, as well as other support measures such as food support and waivers for the payment of electricity bills for vulnerable households. Looking ahead, efforts to improve coverage should be made across the region, particularly for those who are not formally employed.

Figure 3.4. The coverage that social assistance programmes provided in the OECS region during the COVID‑19 pandemic varied significantly between countries

Beyond extending coverage to vulnerable populations, further opportunities to improve social protection in OECS countries include universal healthcare and unemployment benefits. At present, the region’s social security systems focus mainly on covering workers’ sick leave and pensions and, to a much lesser degree, healthcare bills (US Social Security Administration, 2020[14]). There is also a regulatory framework in place for severance or redundancy pay, which exists in all of the member states. Beyond these schemes, there is little in the way of social protection. As a top priority, the OECS member states would benefit from universal health insurance and unemployment insurance schemes, which are all the more important in the context of the region’s ageing population.

Country	Unemployment	Healthcare
Anguilla	A temporary unemployment assistance programme launched during COVID-19.	X
Antigua and Barbuda	X	Plans exist to develop universal healthcare systems, with feasibility reports in progress.
Dominica	Assistance to unemployed heads of families and single persons was announced during COVID‑19, lasting until June 2021.	Advanced plans exist towards a universal healthcare system, featuring strategy documents, and joint projects with PAHO to expand coverage and evaluate the current healthcare system.
Grenada	Additional support provided to laid-off employees by the Support for Education, Empowerment and Development (SEED) programme. Also, an Unemployment Assistance Benefit programme was introduced during COVID-19.	Currently in the process of developing a National Health Insurance (NHI) programme, in line with UN Sustainable Development Goals (SDGs).
Montserrat	Support to unemployed persons of 900 Eastern Caribbean dollars (XCD) per month was announced during COVID-19.	X
St. Kitts and Nevis	The country has announced its intention to develop an Unemployment Insurance Fund. Legislation is in the drafting phase. The Social Security Board approved cash transfers of XCD 1 000 to individuals whose employment was affected by COVID-19 for four months in 2020.	Advanced plans towards development of a universal healthcare system entitled National Health Insurance, including draft legislation.
St. Lucia	Intention to develop a programme announced.	Advanced plans towards the development of a universal health care system called the National Health Insurance Initiative, including USD 20 million funding from the World Bank to finance its development.
St. Vincent and the Grenadines	X	Project with PAHO started in 2014.

Note: X denotes that no plans are underway.

Source: US Social Security Administration (2020[14]), Social Security Programs Throughout the World: The Americas, 2019, https://www.ssa.gov/policy/docs/progdesc/ssptw/2018-2019/americas/index.html; Universal Health Coverage Partnership (n.d.[15]), Universal Health Coverage Partnership: Target Countries, http://www.uhcpartnership.net/; PAHO/WHO (2019[16]), Health Ministers of the Americas Discuss Strategies to Achieve Universal Health, https://www3.paho.org/hq/index.php?option=com_content&view=article&id=15200:ministros-de-salud-de-las-americas-destacan-las-estrategias-implementadas-en-el-camino-a-la-salud-universal&Itemid=72517&lang=en; The Borgen Project (2022[17]), The Borgen Project – Blog, https://borgenproject.org/blog/; IMF (2021[18]), Policy Responses to COVID-19, https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19; St. Kitts Nevis Information Service (2020[19]), PM Harris commends social security’s response to assist 3,500 persons who lost income due to Covid-19, https://www.sknis.gov.kn/2020/05/11/pm-harris-commends-social-securitys-response-to-assist-3500-persons-who-lost-income-due-to-covid-19/.

Many universal healthcare initiatives in the OECS are labelled as work in progress, and little information is available about how projects have been advancing. Several member states have, for instance, announced that they have started working on universal health insurance schemes, but a fully functional system has not yet been implemented in the region Table 3.2. In many cases, member states have worked with international organisations such as the Pan American Health Organisation (PAHO), and the World Bank, to develop legislation and healthcare capacity (Universal Health Coverage Partnership, n.d.[15]; PAHO, WHO, 2019[16]). While these projects have already surpassed certain milestones, there is nonetheless little concrete information about the progress or launch of concrete programmes. Consistent communication about projects of this kind would benefit the population by helping to manage expectations.

Permanent unemployment schemes are non-existent in the OECS. In order to protect vulnerable populations and reduce poverty rates, however, it is important to build a safety net for workers, as was highlighted during the COVID-19 pandemic. Nevertheless, there are currently no sustained programmes for unemployed or vulnerable workers. Since the onset of the pandemic, several member states have recognised the importance of making progress on this front, and have announced to media outlets and international audiences their intention to develop unemployment benefits. However, there have yet to be any consistent efforts towards making this a reality.

There is now an opportunity for OECS countries to build upon their responses to COVID-19 in order to develop long-term systems of social protection. Several countries provided temporary unemployment insurance programmes to citizens during the pandemic (Table 3.2), and most have highlighted the importance of developing such a programme in light of the recent crisis. The countries in the region that have implemented such social protection programmes during the pandemic have gained valuable experience in the financing and establishment of systems of this kind. Looking ahead, they can use this as a framework to develop long-term programmes. The pandemic also highlighted the importance of robust public health systems, with most countries increasing their expenditure on healthcare during the crisis.

Streamlining the programmes that already exist can reduce the fragmentation of social assistance programmes. Given that many of the projects for universal healthcare or unemployment insurance that are currently underway in the region are funded in part by donors and multilateral organisations, such as PAHO and the World Bank, these projects are often not designed in conjunction with one another. This can sometimes lead to programmes becoming large and spread out, or else highly specific, creating a fragmented system (Knack and Aminur, 2008[20]). In Dominica, for example, most social assistance seems to consist of multiple programmes for specific groups. The country has 30 separate programmes that are currently undergoing a social protection review. During such a review process, there is scope to streamline and unify social protection programmes.

A framework for developing social programmes can be organised at a regional level in order to facilitate adoption across the different member states. In addition to establishing the OECS Economic Union, the Revised Treaty of Basseterre also envisaged the development and adoption of a harmonised, common policy framework for human and social development (OECS, 2020[8]). Given the large differences between member states in terms of the current status of development of such programmes, less advanced countries can take inspiration from those with more developed frameworks. Taking inspiration from other countries in the wider region can also help OECS countries to develop their own programmes. One example of potential inspiration is Barbados’s National Insurance Scheme, which has been very successful since it was put in place in 1982.

3.2.3. OECS countries require strategies to expand spending on social protection and healthcare systems

As they look to the future, OECS countries require a strategy for increasing spending on social protection. Currently, a breakdown of government expenditure shows that social benefits make up an average of only 1.89% of government spending in the region. This leaves little room for investment in social protection programmes, and may indeed be causing the slow development of related projects. Against this backdrop, member states need a strategy to expand and improve their spending on social benefits so that these programmes may be pursued in full. One possibility is for governments to expand the revenues that they have at their disposal, thus opening up more space for investment in social assistance schemes, but this is difficult to do given the region’s already tight fiscal space (OECS, 2021[21]). Alternatively, it is possible to reorganise public expenditure and cut spending in other areas in order to prioritise spending on social benefits so that a strong system of social protection may be developed.

Many of the member states of the OECS have highlighted a need to increase their overall healthcare capacity by setting a goal in the regional strategy scorecard of spending 6% of GDP on healthcare. In most cases, this represents an increase over current values of one percentage point. Given the high prevalence of non-communicable diseases (NCDs) in the region, a strong health system is all the more necessary in order to care for patients. At present, healthcare spending is relatively low in the OECS region. Indeed, expenditure on healthcare as a share of GDP amounts to a regional average of 4.9%, which is lower than the averages for Latin America and Caribbean (LAC) and the OECD, which stand at 8% and 12.5% respectively (Figure 3.5, Panel A).

Figure 3.5. Healthcare expenditure is moderate in the OECS region, with relatively high out-of-pocket spending in some countries

Low levels of overall spending on healthcare in the OECS region result in high out-of-pocket expenditure for patients. Indeed, most of the countries have high rates of out-of-pocket expenditures that burden patients with high costs and debt, and exacerbate inequality (OECD, 2019[22]). An increasing prevalence of NCDs contributes to high out-of-pocket expenditure. According to statistics from 2019, out-of-pocket expenditure accounted on average for 39% of total health spending in the OECS region, almost twice the limit of 20% of total health expenditure suggested by the World Health Organisation (WHO), and nearly three times the OECD average of 13.9% of current health expenditure (World Bank, 2022[5]). Although some countries in the OECS, such as St. Vincent and the Grenadines, do have low levels of out-of-pocket expenditure as a share of GDP, on a par with the OECD, this is against a backdrop of low health spending overall (Figure 3.5, Panel A). This indicates an underfunded sector that provides insufficient care. On a positive note, nonetheless, out-of-pocket expenditure has been on a slow downward trend over the past decade, and public-to-private expenditure ratios are increasing in the region (Figure 3.5, Panel B). However, the region’s commercial insurance sector remains small. In the regional strategy scorecard, all member states have aimed to reduce out-of-pocket expenditure as a percentage of current health spending.

3.3. Policies for prevention, early detection, and tackling risk factors are essential to deal effectively with NCDs in the OECS region

3.3.1. OECS countries have improved health outcomes but a relatively high prevalence of NCDs is a challenge in the region

OECS countries have made important progress in antenatal and neonatal care and maternal health, but there is still a significant degree of variation across the region in this regard. To be sure, OECS countries are performing well, and have shown good progress in childhood immunisation and antenatal care (World Bank, 2018[1]). Many OECS countries are performing relatively well in terms of neonatal mortality, and rates have either fallen or remained constant in many countries in the region over the past decade (Figure 3.6, Panel A). Nonetheless, except for Antigua and Barbuda, neonatal mortality rates are still higher than in OECD members in all countries. Likewise, most OECS member states have moderate maternal mortality rates, and rates have declined or remained constant over the past decade in many countries in the region (Figure 3.6, Panel B). However, there is scope to further reduce maternal mortality rates in the region, and they are still higher than in OECD members. Moreover, maternal mortality remains high in Anguilla, St. Kitts and Nevis and Dominica and has been increasing in St. Kitts and Nevis, Dominica and Grenada.

Figure 3.6. Most OECS countries are performing relatively well in terms of neonatal and maternal mortality, but there is a lot of variation across the region

Even though there has been a slight decline in the mortality rate from non-communicable diseases in the OECS region, the prevalence of NCDs remains relatively high. The mortality rate from NCDs decreased from an average of 610 per 100 000 people in 2000, to 543 per 100 000 people in 2019. Mortality from cardiovascular disease (CVD), cancer, diabetes, and chronic respiratory disease (CRD) in people between the ages of 30 and 70 has, moreover, remained largely constant since the early 2000s. Nonetheless, mortality from NCDs remains rather high in the OECS region, where it stands 33.7% above the average for Latin American and Caribbean, and almost twice the OECD average (Figure 3.7, Panel A). Furthermore, diabetes and high blood pressure present particular challenges for the region. Indeed, the prevalence of diabetes in 20 to 79 year olds increased in the OECS region from 9.1% in 2010 to 12% in 2019, compared to an OECD average of 8.3% (Figure 3.8, Panel A). Moreover, 24.3% of the population in the OECS region aged 18 and older was affected by high blood pressure in 2015, compared to an average of only 20.8% in the OECD (Figure 3.8, Panel B). Meanwhile, women in the OECS region are more affected than men by both cardiovascular disease and diabetes (World Bank, 2012[24]).

Figure 3.7. The prevalence of non-communicable diseases is high in OECS countries

The OECS region’s changing demography and economic development are contributing to a shift from communicable diseases to NCDs. A increase in life expectancy and declining birth rates are contributing to an ageing population in the OECS region. As people live longer lives, they are more affected by NCDs. In addition, economic and social development has helped to improve health outcomes in general, and has led in particular to a decline in mortality from infectious and other communicable diseases in the region (World Bank, 2012[24]). In turn, this implies a larger share of deaths from NCDs.

Figure 3.8. Diabetes and high blood pressure are widespread in the OECS region

Figure 3.9. Obesity constitutes an increasing challenge in the OECS region

As a result of dietary habits and insufficient physical activity, high and increasing levels of obesity are an important underlying cause of the high prevalence of NCDs in the region. Obesity is an important risk factor both for hypertension and diabetes. The prevalence of obesity in the region has been increasing among all age groups in the OECS (Figure 3.9), and women are more affected by obesity than men (World Bank, 2012[24]). Low low levels of physical activity contribute to obesity, and this is especially the case among adolescents. Physical activity has been declining in the region as a result of urbanisation and sedentary lifestyles. For example, 83.3% of adolescents aged 11 to 17 years old were not sufficiently physically active in 2016 (Figure 3.10, Panel B). Even though this is in line with the Latin American and Caribbean average, this number remains high. Physical inactivity is less of an issue for adults in the region, only 30.8% of whom were not sufficiently physically active (Figure 3.10, Panel A). At 39.8%, St. Lucia faces the highest level of physical inactivity for adults in the region. Furthermore, women are less physically active than men. In addition, poor dietary habits are contributing to obesity, especially among children. People from lower socio-economic groups tend to be more affected by obesity, since the least expensive and most affordable foods tend to be high in calories and also less healthy (World Bank, 2012[24]).

Figure 3.10. Insufficient physical activity is a challenge, especially amongst adolescents

Relatively high alcohol consumption in the region is another factor that contributes to the high prevalence of NCDs. In 2018, alcohol consumption in the OECS region was 13.3 litres on average for the population aged 15 and older, which is comparable to OECD countries (14.2 litres on average), and above the average for Latin America and the Caribbean (11.1 litres on average). Alcohol consumption has been increasing over recent decades in the OECS (Figure 3.11). Still, there is considerable variation across the region, and alcohol consumption is the highest in St. Lucia and Dominica. As in other regions of the world, moreover, alcohol consumption is much more widespread among men than women. In 2016, 24.6% of the population aged 15 and over in the OECS region was affected by heavy episodic drinking, and this value was highest for St. Kitts and Nevis (28.7%), as compared to an average of 20% for Latin America and the Caribbean. High alcohol consumption among adolescents is, moreover, a particular concern in the region. On average, 47.3% of 15-19 year olds in the region consume alcohol regularly, and this value was again the highest for St. Kitts and Nevis (53.7%), compared to 42.6% in Latin America and the Caribbean on average in 2016 (WHO, 2022[25]).

Figure 3.11. Alcohol consumption is relatively high, and increasing, in the OECS region

Smoking is less widespread in the OECS region than in other parts of the world, but tobacco use among adolescents is a concern in Dominica. Tobacco use is a serious risk factor for multiple non-communicable diseases, and it causes high rates of disability and morbidity. Data on tobacco use in the OECS region is limited, but existing evidence does shows that smoking is less widespread in the Eastern Caribbean than in other parts of the world (World Bank, 2012[24]). However, tobacco use among adolescents is a concern in Dominica, where it is the highest among 13-15 year olds in all of the Latin American and Caribbean countries for which data is available. It stands at 25.3%, as compared to an average of 12.8% for Latin America and Caribbean in 2016 (PAHO, 2022[23]).

NCDs have a high cost, including direct costs of individual health spending, indirect loss of earnings, and the economic burden that they place upon families, communities, and private and public healthcare systems. In the OECS region, moreover, high healthcare spending is reflected in high out-of-pocket expenditure. For example, the average annual out-of-pocket spending per patient on diabetes ranged from USD 322 in St. Vincent and the Grenadines to USD 769 in Antigua and Barbuda as of 2008, representing 1.1 to 1.4 times the average total health expenditure per capita in these countries. The indirect cost of NCDs results from a reduction in productivity due to absenteeism, as in being away from work, presenteeism, as in working less effectively, and also due to the reduction in the supply of labour that early retirement and premature death can cause, leading to a loss of income (World Bank, 2012[24]; OECD/UN, 2021[26]).

3.3.2. Prevention through awareness raising, legislation and regulation, and policies to encourage more physical activity could reduce the prevalence of NCDs in the OECS region

In order to reduce the prevalence of NCDs in the OECS region, better prevention is key. Given the high cost of NCDs, prevention is essential and the most cost-effective way to tackle NCDs. For example, the OECD predicts every USD PPP invested in prevention measures for obesity to have a return in economic benefits for countries between USD PPP 1.3 and USD PPP 4.6 (OECD, 2019[27]).

Awareness rising at school, at the workplace and through mass media campaigns is an effective prevention measure. Health promotion and prevention, such as teaching people about risk factors that lead to NCDs, and the importance of a healthy diet and physical activity, could be integrated into school curricula (OECD, 2019[27]; World Bank, 2012[24]). For adults, workplace-based awareness raising is increasingly considered as a potentially effective tool to influence choices favouring healthier lifestyles. Further, the workplace offers an opportunity for targeting at-risk groups such as middle-aged men. In addition to programmes targeting students and employees at work, public-awareness campaigns targeted at the entire population could be developed, including mass-media campaigns to promote healthy lifestyles and activities, both through non-governmental organisations (NGOs) and the private sector (World Bank, 2012[24]). Mass-media campaigns have the important benefit of reaching many people (OECD, 2019[27]).

Other interventions at school and at the workplace have also proven effective. Interventions at school include intensive and frequent physical activity lessons, distribution of nutritional education materials and the provision of healthy foods. Possible interventions at the workplace include healthier daily menus and snacks provided at workplace cafeterias, the provision of sit-stand workstations to promote physical activity and reduce sitting time, and workplace wellness programmes (OECD, 2019[27]).

Meanwhile, developing and expanding existing regulations and legislation on tobacco, alcohol and food products could reduce alcohol and tobacco consumption, and encourage healthier diets. Such legislation and regulation includes the pricing and taxation of alcohol, tobacco and products with a high content of sugar, saturated fat and salt. It also includes smoke-free worksites and public places, restrictions on alcohol-sales outlets and their operating hours, and standards on advertising and drink-driving. For example, international evidence shows that every USD 1 invested in advertising regulation has a return of nearly USD 6 in GDP growth (OECD/UN, 2021[26]; World Bank, 2012[24]; OECD, 2019[27]). OECD analysis suggests that health improvements resulting from food pricing policies disproportionately benefit the poor and outweighs any adverse economic effects for the poor. It is important that pricing policies take into account any potential substitution effects, for example, from one type of unhealthy food to another, and ensure a sufficient pass-through of the tax in the form of a price increase, as minimal changes in price are unlikely to significantly modify purchasing patterns (OECD, 2019[27]).

Taxes and other regulation on alcohol, tobacco and food products already exists in OECS countries but could be further strengthened. At present, all OECS countries have excise and/or VAT taxes on alcoholic beverages. Dominica, St. Kitts and Nevis and St. Vincent and the Grenadines have taxes on sugar-sweetened beverages. All OECS countries have tobacco taxes; however they are less than 25% of the retail price in most countries and below the WHO recommendation of more than 70% of the final sales price. None of the OECS countries has implemented advertising bans or restrictions on advertising for tobacco, alcohol or unhealthy foods. Most OECS countries do not have bans on smoking in public places, and health warnings on cigarette packages were only introduced in Antigua and Barbuda and St. Lucia recently (WHO, 2022[25]; World Bank Group, 2018[28]). In addition to strengthening existing regulation and developing appropriate legislation and regulation in the OECS region, appropriate enforcement would need to be ensured (World Bank, 2012[24]).

Labelling rules for food products and restaurant menus could improve knowledge and awareness about food composition. Food labels on pre-packaged foods aim to inform consumers about the nutritional value of foods. They can include “informative” labels that contain a list of nutrients, which are usually put on the back of packets. They can also include clearly visible “interpretive” labels, providing nutritional information in a more easy-to-understand format, and usually appearing on the front of a packet (OECD, 2019[27]). For example, the EU has harmonised legislation on the provision to consumers of information about food. Under these rules, it is mandatory to provide certain information such as allergens and ingredients, as well as certain nutrition information for pre-packed foods, and there are certain requirements that also apply to fresh meet and non-prepacked foods (European Commission, 2022[29]). Moreover, studies conducted in different European countries between 2003 and 2006 found widespread consumer interest in the use of nutritional information on food packaging, and previous work by the OECD has found an increase of 18% in the number of people selecting healthy food products as a result of food-labelling policies. Meanwhile, the labelling of menus in restaurants involves listing information at points-of-purchase in restaurants and cafeterias on calorie content, as well as on the content of other nutrients of items on menus. Emerging evidence indicates that menu labelling can positively affect consumers’ behaviour, and that there is strong public support for it. However, restaurant labelling is much less widespread internationally than food labelling (OECD, 2019[27]).

Policies promoting active travel and walking can increase physical activity, thereby improving physical and mental health and reducing overweight and obesity. Examples of such policies are dedicated cycle lanes and bike-sharing schemes, urban planning to increase the number of parks, recreational areas and green spaces, as well as expanding access to convenient public transport options to encourage people to switch from car use and to walk more to reach their destinations. It is also possible to close central parts of cities to traffic on certain days of the week. Dedicated cycle lanes and bike-sharing schemes exist for example in Copenhagen, London, Amsterdam, Paris, Vienna and New York (OECD, 2019[27]).

In addition to prevention, early detection of NCDs through primary healthcare is also important. For a start, so-called secondary prevention programmes could identify high-risk individuals through healthcare, and then prevent deterioration, incapacity and fatality through appropriate measures. Primary care also constitutes a good opportunity to provide information and advice on healthy lifestyles, and to encourage physical activity. An effective primary health system, as well as training health professionals to deliver preventive services, are essential for this purpose (World Bank, 2012[24]; OECD, 2019[27]).

In order to improve prevention of NCDs and tackle risk factors, strengthening surveillance and monitoring would also be important. More comprehensive, reliable and regularly collected data on the prevalence of risk factors and health outcomes would be required as a basis for setting priorities and designing and evaluating effective interventions, (World Bank, 2018[1]).Looking ahead, there are opportunities in the OECS for regional collaboration in tackling NCDs. For example, harmonised regulation and legislation on tobacco, alcohol, food and medicines could be developed at the regional level. Moreover, designing a regional strategy to tackle NCDs could lead to economies of scale and cost savings. There are also opportunities for regional co-operation in surveillance and monitoring via the collection of data at the regional level, as well as by improving national capacity through the sharing of knowledge. Finally, regional collaboration in training health professionals could also be beneficial. Indeed, it could facilitate the development of new qualifications to prevent and treat NCDs, as well as a sharing of faculty and didactic materials. Collaboration and group purchasing of essential medications could, moreover, serve to increase access and affordability. In this vein, a regional agency, the Pharmaceutical Procurement Service, already invites tenders, and awards Regional Price Contracts, for the procurement of pharmaceuticals for OECS countries (World Bank, 2012[24]).

Another essential step in tackling NCDs would be to develop a financing strategy. Financing is required both for patients’ healthcare expenditure, and for specific programmes and policy interventions for preventing and tackling risk factors. At present, high out-of-pocket expenditure in the OECS region presents a barrier for those with NCDs who are trying to access health care. What is more, the commercial insurance sector remains small in the OECS region, and public-health expenditure is still relatively low. Jamaica is an example of a country that has developed a successful financing strategy for NCDs. Jamaica’s National Health Fund (NHF) provides free or subsidised medicines to patients with NCDs, and finances prevention programmes. Jamaica’s NHF is financed by revenues from taxes on tobacco and alcohol, as well as by revenues from a special consumption tax on petrol, and a tax on motor vehicles. Jamaica also taps into private funding from pharmaceutical companies, through an NHF programme (World Bank, 2012[24]).

3.4. Boosting human capital in the OECS region requires improvements in the quality of education, and a closing of the skills gap

3.4.1. OECS countries perform well in terms of access to formal education, but quality remains a challenge

OECS countries perform well in providing access to primary and secondary education. Indeed, enrolment and completion rates are high across the region, both for primary and secondary education (Figure 3.12). High enrolment and completion rates are mainly the result of free and compulsory education for children from approximately five to 16 years old. Most primary and secondary schools in the OECS region are public (OECD, 2019[30]).

Figure 3.12. OECS countries perform well in terms of enrolment at primary and secondary schools and primary and secondary completion rates

Notwithstanding their success with regard to enrolment, OECS countries are doing less well in terms of student performance, in particular with regard to children from lower socio-economic groups. Indeed, a large share of students do not achieve minimum levels of mastery in numeracy and reading in the national examinations at the end of their primary education. In turn, this contributes to high repetition rates at secondary schools in several OECS countries (Figure 3.13). Repetition rates tend to be higher for children from lower socio-economic backgrounds. These children tend to perform less well at school, and are more likely to drop out before completing secondary school, or indeed to complete school without passing any examinations. This then often results in their exclusion from the labour market, and in limiting their access to higher education. Students’ performance in centralised secondary examinations (Caribbean Secondary Education Certificate [CSEC] examinations) has, moreover, deteriorated in most OECS countries since 2015. In 2015, 37.5% of students on average passed five or more CSEC subjects including English A and mathematics, but barely 28% did so in 2019 (OECS, 2017[31]; OECD, 2019[30]; World Bank, 2018[2]).

Figure 3.13. While repetition rates are moderate in primary education in the OECS region, they are high in secondary education in some OECS countries

A further challenge is that there are wide gender disparities in student performance in secondary education, and also in tertiary enrolment rates. In most OECS countries, the share of females passing five or more CSEC subjects including English A and Mathematics is considerably higher than the share of males who do so (Figure 3.13). Since the CSEC is a requirement for entering tertiary education, the underperformance of males relative to females in this exam is further reflected in tertiary enrolment rates. Indeed, female tertiary enrolment rates are much higher than male tertiary enrolment rates. In 2015, female gross enrolment in tertiary education was 25% in St. Lucia, and 30% in St. Vincent and the Grenadines, whereas male tertiary enrolment was only 13% and 18% respectively (World Bank, 2022[5]).

Figure 3.14. There are considerable gender disparities in students’ performance in CSEC examinations

Figure 3.15. The share of untrained teachers in primary and secondary education is high across the region

Furthermore, a shortage of trained teachers in the OECS contributes to poor performance among students. The share of trained teachers in primary and secondary education is low in the OECS region (Figure 3.15). And while the share of trained teachers in secondary education has increased in all countries in the region over the last decade, the share of trained teachers in primary education has decreased in several countries. In particular, there is a shortage of trained teachers in mathematics, science, English and information and communication technology (ICT). In some cases, teachers are even assigned to teach subjects other than their area of qualification and expertise (OECS/World Bank, 2010[33]).

3.4.2. More and better-trained teachers, and the development of high-quality foundation skills, could enhance the quality of formal education in the OECS region

Incentives for untrained teachers to acquire qualifications more quickly, and the introduction of mandatory pre-service teacher training, are among the measures that could increase the share of trained teachers in the OECS region. Historically, entry requirements for teaching in the OECS region have not included a professional qualification (OECS/World Bank, 2010[33]). In most OECS countries, a majority of teachers start teacher training only once they have been recruited as teachers, studying in parallel to teaching, or after several years of teaching without training. Since students teach while training, this training tends to take a long time. By contrast, teachers in St. Lucia acquire qualifications faster, since they do not earn a salary in the summer months unless they have completed teacher training and are certified. Furthermore, teachers have to stop teaching if they are not certified within five years, and they cannot get a permanent position unless they are certified. This policy provides incentives for teachers to complete teacher training, and to get certified faster. Therefore, St. Lucia has a lower share of untrained teachers than other countries in the region. Other countries in the region could adopt similar policies. In the long run, however, making pre-service teacher training and certification mandatory across the OECS region would be an important step forward (OECS/World Bank, 2010[33]).

Improving the image of the teaching profession, as well as teachers’ working conditions and salaries, could encourage better-performing graduates to become teachers, and could enhance teachers’ performance. Teachers’ wages are relatively low in the OECS region, and opportunities for professional development are limited. Furthermore, wages do not have a performance element, but are entirely based on experience, providing teachers with few incentives to make additional efforts. Finally, there is a lack of professional standards to support teachers in their professional development over the course of their career (e.g. qualified teacher, lead teacher, master teacher). These challenges are even more prevalent at the secondary level than at the primary level. At present, and as a consequence of these rather poor working conditions, graduates often decide to become teachers only if they cannot find a better job. Making the teaching profession more attractive through higher, and performance-based wages, better-quality training, and more opportunities for professional development and lifelong learning, could incentivise younger, brighter and academically better-prepared applicants to become teachers, while also boosting teachers’ motivation (OECS/World Bank, 2010[33]).

OECS countries could consider harmonising teacher training across the region, and establishing a common system for accrediting teachers. This would require OECS member states to agree on common standards for teacher-education graduates, and indeed for the recognition of qualifications throughout the region. Such an approach would ensure that teacher-training institutions across the region meet agreed standards, and also that they facilitate the movement of teachers across the region, thereby making the teaching profession more attractive (OECS/World Bank, 2010[33]). In addition, OECS countries would benefit from economies of scale in the design and implementation of a teacher-accreditation system.

In addition to improving training and working conditions for teachers across the region, it is essential to ensure that formal education equips all students with high-quality foundation skills. At present, most students leaving secondary school in the OECS region do not possess the critical thinking, digital, and soft skills that the labour market requires. This includes creative skills, ICT skills, work ethics, and the capacity to generate and communicate knowledge. Across the region, there is also a need to focus on the development of high-quality foundation skills for all students in their school curricula. This includes digital and problem-solving skills, co-operative teamwork skills, pro-activeness, and creativity (OECD, 2019[34]; OECS, 2012[35]). Delivering this kind of focus would require adjustments to teacher training, plus the organisation of in-service training, in order to equip teachers with the required skills (Blom and Hobbs, 2008[36]). To be sure, some efforts on the part of community colleges are underway in the region, with a view to improving foundation skills. For example, the community college in Dominica has introduced a soft-skills course for all students, and the community college in St. Lucia has put in place an information technology (IT) course. However, such efforts are required systematically at the secondary level.

Focusing on skills rather than exam preparation would be an important step in equipping students with high-quality foundation skills. In the OECS region, the secondary education system tends to focus on preparing students for CSEC exams rather than on developing specific skills. Student’s CSEC passes are widely used as a screening device for entry into community colleges and the University of the West Indies, as well as in job announcements. There is, however, a need for more interactive teaching methods and problem-oriented curricula, including active participation, case-based training, and team projects (Blom and Hobbs, 2008[36]).

3.4.3. The public pre-primary education offer could be expanded in the region

By comparison with international standards, the countries of the OECS already perform relatively well in terms of pre-primary education, but this performance does vary between countries, and there is scope to increase the offering of public pre-primary education (Figure 3.16). Providing access to quality affordable early childhood education (ECE) is important, because it is in children’s early years when their minds are most receptive, and the groundwork for their future development is laid. Evidence shows that investments in early learning have the highest returns. In addition, ECE frees up time for women, and allows them to return to the labour market more quickly and easily (OECS, 2020[37]; OECS, 2020[38]; OECS, 2020[39]; World Bank, 2018[2]). While pre-primary enrolment is already close to 100% in St. Vincent and the Grenadines, Anguilla, and Grenada, there is still room to increase pre-primary enrolment rates in Montserrat, Dominica, St. Lucia, and Antigua and Barbuda. Furthermore, there is scope more generally for a larger public pre-primary education offering. At present, pre-primary institutions in the OECS region are mostly privately run. In 2019, there were 393 private pre-primary institutions in the OECS region, and 80 public ones (OECD, 2019[30]).

Figure 3.16. Pre-primary enrolment rates are already relatively high in the OECS region, but there is variation across countries

3.4.4. Tertiary education in the OECS region could be expanded with the support of private financing

Enrolment in tertiary education remains limited in the OECS region (Figure 3.17), despite high rates of return. Moreover, high enrolment rates in tertiary education in Grenada and St. Kitts and Nevis seem to reflect the large numbers of foreign students who attend offshore universities in these countries, while enrolment rates for locals tend to be much lower. In 2017, the mean number of years of schooling for the population aged 25 and older in the OECS region averaged only 8.6, compared to an average of 11.8 years in the OECD. In St. Lucia, only 9.3% of adults over 25 years old had completed some type of tertiary education as of 2019 (World Bank, 2022[5]). Moreover, the rates of young people who are not in education, employment or training (NEET) are high. On average, this stood at 37% in 2020 in the OECS region, compared to 24% in Latin America and the Caribbean, and 16% in the countries of the OECD (Figure 3.18). Rates of return to post-secondary and tertiary education are high in the OECS region. Young workers with post-secondary and tertiary education have considerably lower unemployment rates than their less-educated peers (Blom and Hobbs, 2008[36]).

Figure 3.17. Enrolment in tertiary education is very low in OECS countries, except for Grenada and St. Kitts and Nevis

Figure 3.18. The share of young people not in education, employment or training (NEET) in the OECS region is high

Attracting more private funding could offer opportunities to expand the tertiary education offering in the OECS region. Indeed, tertiary education is under-funded in the region. Expenditure on tertiary education ranges from 5.2% of government expenditure on education in Grenada (2017) and 5.8% in St. Kitts and Nevis (2015), to 12.7% in St. Lucia (2011) and 15.5% in Antigua and Barbuda (2009). These levels compare to an OECD average of 25.4% (2016) (World Bank, 2022[5]). Tertiary education is almost exclusively publicly funded (except for offshore universities), and tuition fees tend to be low or non-existent in the region. For example, community-college tuition fees were recently abolished in Dominica. One option for increasing the financial resources available to community colleges in the region could be to moderately increase tuition fees, in combination with student-loan and scholarship programmes for students who cannot afford the fees. This would allow the colleges to improve and scale up their educational offering, and to educate more students. Such an approach could be justified by the fact that public spending on tertiary education tends to be regressive in the region, since a majority of students enrolling in tertiary education originate from relatively wealthy families. Furthermore, a significant number of graduates go on to emigrate, thereby reducing the returns of public investment in education for governments, since the benefits of these investments do not accrue to the country (World Bank, 2008[40]).

3.4.5. A skills mismatch, and skills shortages, limit private investment and job creation in the OECS region

A skills mismatch resulting in an inadequately prepared workforce, and in skills shortages more generally, presents challenges for the private sector in several OECS countries. An inadequately educated workforce ranks among the top obstacles for firms in the Eastern Caribbean, especially in St. Vincent and the Grenadines, Grenada, and St. Kitts and Nevis. The share of firms identifying an inadequately educated workforce as a major constraint ranges from 12.7% in Dominica, 21.7% in St Lucia, and 27.8% in Antigua and Barbuda, to 35.3% in St. Vincent and the Grenadines, 38.8% in Grenada, and 45.3% in St. Kitts and Nevis (2010) (World Bank, 2022[41]). In 2019, about 57% of workers in St. Lucia were identified as under-qualified. In 2020, meanwhile, 27% of the job openings in St Vincent and the Grenadines that required higher education were not filled due to insufficient numbers of applicants with the required skills (Angel-Urdinola and Marchioni, 2022[42]).

Notably, there is a shortage of technical skills and soft skills. While most students opt for arts and social sciences, there tends to be a shortage of engineers, scientists and technicians (e.g. auto-mechanics, air conditioning technicians, plumbers, and maintenance staff). This challenge seems to be mainly rooted in culture and tradition. Indeed, when it comes to professional careers, doctors and lawyers have the highest social standing, and youngsters are encouraged by their parents to pursue careers in these areas, irrespective of other opportunities. In addition, ICT skills, soft skills, and entrepreneurial skills are also in shortage in the region. This is partly the result of an insufficient focus on the development of these skills in secondary education, as discussed above. On the other hand, employers are looking for soft skills such as co-operative and team-working skills, communication, work ethics, integrity, problem solving and efficiency, entrepreneurship, commitment, and responsibility (Angel-Urdinola and Marchioni, 2022[42]).

There is, moreover, a shortage of skilled workers in the tourism sector. In particular, culinary workers and executive chefs and managers are lacking. To a lesser extent, there is also a lack of waiters, spa workers, and maintenance staff. Companies are often forced to recruit expensive staff, born and trained abroad, for culinary roles and executive positions as chefs and managers, since they are unable to find qualified local workers. In St. Vincent and the Grenadines, for example, specialised managerial skills for the management of marinas and yacht-chartering companies are not available, while in St. Lucia’s tourism sector there is a shortage of managerial skills (Blom and Hobbs, 2008[36]).

Structural transformations in the economy of the OECS region have contributed to the skills mismatch and shortage. The shift from agriculture to the services sector has resulted in increased demand for skilled workers. Sectors that have been expanding in the OECS region, such as tourism and other services industries, require more skilled labour than contracting sectors such as agriculture. Due to technological change, agriculture and manufacturing are also becoming more skills-intensive. Other trends that have been contributing to the demand for more skilled workers are outsourcing, increased capital flows, skill-biased technology, and innovation. If the OECS region wants to diversify its economies by expanding digital-services in areas such as business, ICT, medical, financial and professional services, demand for skilled labour will rise even further in the future (Blom and Hobbs, 2008[36]).

In addition, high levels of emigration, notably among young, skilled workers, plus the limited offering of tertiary education, are major factors that contribute to skills shortages in the region. In fact, the OECS region has one of the highest emigration rates in the world, and this is especially the case for high-skilled workers with a post-secondary education. While emigration has certain benefits to home countries, such as remittances, it also results in a substantial loss of human capital. Furthermore, it has a negative impact on innovation, on the creation of new enterprises, and on overall economic development and the prospects for growth. In addition, and as discussed above, an insufficient number of skilled workers are trained in the region. As a result, there is an oversupply of low-skilled workers and a shortage of high-skilled workers, and this translates into a wage premium for skilled workers (World Bank, 2008[40]; Blom and Hobbs, 2008[36]; World Bank, 2018[2]).

High levels of unemployment, and of long-term unemployment in particular, can result in a deterioration and loss of skills. There is a large amount of structural and long-term unemployment in the OECS region. In turn, long-term unemployment can lead to the deterioration and loss of skills. This is especially true in the case of young workers, who do not have much work experience. The deterioration and loss of skills has a negative impact both on workers’ future expected earnings, and on the probability that they will get a good job (World Bank, 2018[2]).

Training more skilled workers who possess the skills that are in demand in the labour market will be essential to take advantage of the opportunities that exist for economic growth and improved living conditions in the countries of the OECS. Indeed, skilled workers tend to be better remunerated and to enjoy higher living standards. Moreover, adequate human capital has a key role to play in the diversification of the OECS economies, including in the expansion of digital-services industries, as well as modernisation and technological upgrades in agriculture and fisheries. The availability of greater numbers of better-skilled workers in the region can also contribute to the creation of new business opportunities and jobs in skills-intensive niche industries. In addition, greater numbers of skilled workers would allow more businesses to invest in productivity-enhancing technological improvements such as ICT. Furthermore, the availability of the right skills in the OECS region could reduce the upward pressure on wages, thereby reducing labour costs, and enhancing competitiveness (Blom and Hobbs, 2008[36]).

3.4.6. OECS countries require better information on the skills that are in demand on the labour market

The countries of the OECS require a system to collect and disseminate information on the skills that are in demand on the labour market. Indeed, in order to make decisions about which skills to develop, both individuals and firms need information on the skills that are available or lacking in the labour market. Governments need this information in order to design relevant policies and programmes for education and training, with the aim of reducing mismatches and shortages of skills. In the OECS region, there is a lack of labour-market information. Therefore, it is difficult for educational institutions and governments to address the skills mismatch, and students and parents are not always aware of the careers that are in high demand (OECD, 2019[34]; Blom and Hobbs, 2008[36]). To be sure, some efforts are already underway on the part of community colleges in the region, to disseminate information on skills. For example, the community college in Dominica is organising information sessions for parents in a bid to change their perceptions on career prospects and the skills that are in demand. However, precise information on such skills remains scarce.

Regular assessments of the needs of the regional labour market could improve information on the skills that are in demand. Regular assessments of the labour market’s needs, for example through skills assessment and anticipation (SAA) systems, are an effective tool to identify the types of occupations, qualifications and fields of study that are in demand on the labour market, or indeed that may become so in the future. Many OECD countries have adopted SAA systems. Both employers and trade unions should be involved in these assessments of the needs of the labour market, for example through dedicated councils or committees. In addition, a labour-market observatory can monitor trends in the labour market on a regular basis. Regional assessments, plus a regional labour-market observatory, could facilitate substantial cost savings in the OECS region, as compared to country-specific institutions (OECD, 2019[34]; Blom and Hobbs, 2008[36]).

Skills councils in key industries could, moreover, improve communication between employers, educational institutions, labour unions, and the government, thus helping to close the information gap. In addition to information about the labour market, there is a need for platforms through which employers, educational institutions, and governments can discuss skills needs on a regular basis. This could be done through the creation of skills councils. For example, these could be based on the model of the United Kingdom’s Learning and Skills Councils (OECD, 2019[34]; Blom and Hobbs, 2008[36]).

3.4.7. A larger and better offering of vocational, tertiary and adult education could close the skills gap in the OECS region

OECS countries require a larger offering of technical and vocational education, and one that is better linked to the labour market. The share of 15 to 24 year-olds who are enrolled in vocational education in the OECS region ranges from 0% in Dominica, St. Kitts and Nevis, and St. Vincent and the Grenadines, to 1.8% in Antigua and Barbuda, and this compares to an average of 11.6% in the OECD (2019) (World Bank, 2022[5]). Moreover, there is a need to shift to more vocational education and training at community colleges. Furthermore, existing technical and educational programmes, most importantly at the secondary level, need to be better linked with the labour market (Blom and Hobbs, 2008[36]). To be sure, some efforts to promote more vocational education and training in the region are already underway. For example, the community college in Dominica is trying to encourage more students to pursue technical careers such as agriculture, nursing, or air conditioning. It has also been trying to introduce more internships into its degree programmes, and to build more partnerships for these internships with local businesses, for example in the tourism sector.

To close the skills gap, OECS countries could also focus on improving adult education. The offering of adult education programmes in the OECS region is small, and adults continue to constitute an under-served market. Still, some adult-learning programmes do exist at community colleges in the region, along with initiatives by NGOs, churches and the private sector, and there are also some programmes that target specific groups, such as prisoners. Some countries have specific institutions that deal with adult education and lifelong learning, such as St. Lucia’s National Enrichment and Learning Unit, and St. Vincent and the Grenadines’ Adult and Continuing Education Unit. However, none of the OECS countries have a strategy or a policy for adult learning and education, or indeed a framework that standardises adult learning and education. What is more, financing for adult education remains a challenge across the region, and adult learning and education often are the lowest priority in education budgets. By contrast, however, there is a need to look at adult education as an investment in the future rather than as an aspect of social welfare or as a cost with low returns. Information from assessments of the needs of the labour market could be used to develop adult education programmes that line up with labour market needs, and that focus on the skills that are most in demand. Furthermore, there is also an opportunity to create a regional framework for adult education (UNESCO, 2021[43]).

By generating economies of scale, meanwhile, regional collaboration provides an opportunity to close skills gaps. Due to the small size of OECS countries, it is difficult for tertiary education institutions in the region – essentially community colleges – to offer curricula and courses to educate all of the professions in a modern society. Course development is expensive, and it may indeed not pay off if the number of students per cohort is too small. By creating economies of scale, regional collaboration could make it possible to develop a larger offering of courses and curricula. For example, the establishment of a network of community colleges is one notable opportunity. Collaboration in curricula and course development could be facilitated by online teaching, thus building on the experience that institutions have built up in the context of the COVID-19 pandemic. Regional collaboration could focus initially on courses in areas in which the region faces significant labour shortages, such as tourism management and culinary arts. This should include close collaboration with the private sector. Working together with the University of the West Indies, and with recognised international universities, to offer distance-learning courses could, moreover, make it possible to develop additional courses and curricula that enrol a very small number of students even at the regional level (Blom and Hobbs, 2008[36]).

3.5. High levels of crime in the region could be reduced through crime prevention among young people, a better tertiary education offer, and a strengthened judicial system and police force

Levels of crime are high in the OECS region. Indeed, the average rate of intentional homicide in the region is almost four times as high as in the United States, and five times as high as the average for the OECD. Intentional homicides are particularly high in St. Kitts and Nevis, and in St. Vincent and the Grenadines (Figure 3.19, Panel A). Robberies, meanwhile, are most widespread in St. Lucia, Antigua and Barbuda, and St. Kitts and Nevis (Figure 3.19, Panel B). Criminal gangs and drug trafficking and addiction are particularly important challenges across the region (Figure 3.20 and Figure 3.21). In addition, the use of firearms is particularly widespread in the Eastern Caribbean (IMF, 2017[44]). Moreover, money laundering is also an issue. In St. Kitts and Nevis, 66.2% of the population perceives crime as as the largest challenge, whereas 5-19% of the population take this view in other OECS countries (2016) (Vanderbilt University, 2022[45]).

Figure 3.19. Rates of intentional homicide are high in the OECS region, and robberies are relatively widespread in some countries

Social challenges in the OECS region contribute to high levels of crime. High levels of unemployment, in particular youth unemployment, plus poverty and inequality, have contributed to the proliferation of criminal gangs in the region (Figure 3.21). Moreover, unemployment and poverty also fuel the trafficking of and addiction to drugs (Figure 3.20). Furthermore, vulnerable groups are more likely to be victims of crimes such as threats and assault (World Bank, 2018[1]; IMF, 2017[44]). Violent crime is more frequent in neighbourhoods where gangs are present. It is also more frequent in neighbourhoods that report higher levels of physical disorder, such as trash, abandoned buildings, and graffiti, and where there is lower social cohesion, such as trust among neighbours (IMF, 2017[44]). Gender-based violence is also an issue in the OECS region, and can fuel other types of criminal behaviours. Indeed, experiencing or witnessing violence at home at an early age is a strong risk factor for violence and delinquency at a later stage of life. 22-24% of women in Antigua and Barbuda and St. Lucia reported having been threatened by their spouses, and 10% reported violence by their spouse, which is in line with the Caribbean regional average (2010) (IDB, 2017[47]).

Levels of delinquency and risky behaviour are particularly high among young people. In addition to people from the lowest income groups, it is indeed young people who are more likely to join criminal gangs (Figure 3.21, Panel B). Young people, especially men, are also more likely to be victims of crimes such as assault and threats, and indeed to be arrested and imprisoned for crime. Risk behaviours amongst adolescents aged 13-17 in the Eastern Caribbean, such as drinking, fighting, and, most importantly, drug use are relatively high in comparison to other countries in Latin America and the Caribbean (2016). Rates of drug use among 13-17 year olds range from approximately 16% in Grenada and 19% in St. Vincent and the Grenadines, to 20% in St. Lucia, and 23% in Antigua and Barbuda (2016) (IDB, 2017[47]; Al-Hassan et al., 2020[48]; World Bank, 2018[1]; IMF, 2017[44]).

Figure 3.20. Drug trafficking and addiction are important challenges across the OECS region

Figure 3.21. Social challenges contribute to the success of criminal gangs in the OECS region, in particular among young people

Crime has major economic and social costs. The direct costs of crime include costs from loss, injury and damage, forgone income on the part of victims and prisoners, as well as private and public expenditure on security and the criminal justice system. Indirect costs include costs to victims’ families. Furthermore, violent crime can have a negative impact on tourism and private investment. Public spending can be diverted away from growth-enhancing investment in health, education and productive infrastructure to fight crime and fund the criminal justice system. This can then result in lower levels of economic growth (Al-Hassan et al., 2020[48]; IMF, 2017[44]). A study from the IDB estimates the average cost of crime in the Caribbean at 3% of GDP (IDB, 2017[47]).

In the OECS region, crime is associated with lower levels of both economic growth and tourist arrivals. For example, a study by the IDB shows that reducing the homicide rate to the global average could increase annual economic growth by 5.3% in Dominica, 2.1% in St. Kitts and Nevis, 1.6% in St. Lucia, 0.7% in St. Vincent and the Grenadines, and 0.4% in Antigua and Barbuda (based on data for 1995‑2011). Assuming, for example, that Dominica’s GDP were growing at an annual rate of 3%, this would imply that the country’s annual rate of GDP growth would rise to 3.16% if homicides were reduced to the global average rate.

Crime is costly for private businesses in the OECS region. Indeed, it can increase business costs and have a negative effect on firms’ revenues, as well as on levels of employment and hours worked. It is also a major deterrent to firms that may otherwise wish to enter the market in OECS countries (IMF, 2017[44]). Close to 30% of firms in Grenada, and more than 20% in both St. Vincent and the Grenadines and St. Kitts and Nevis, report that crime, theft and disorder form a very severe or major obstacle to doing business (2014). Furthermore, approximately 20-33% of firms in the region reported having experienced losses as a result of theft, vandalism, robbery or arson in the previous fiscal year (2014)1 (IDB, 2017[47]). In 2014, combined losses and expenses due to security ranged from 3.5-4% of annual sales in Antigua and Barbuda, Dominica, Grenada and St. Vincent and the Grenadines, to more than 5% of annual sales in St. Lucia, and close to 8% of annual sales in St. Kitts and Nevis (IMF, 2017[44]).

A stronger focus on crime prevention among young people is essential. Indeed, early criminal behaviours in young people can more easily turn into established patterns than for other age groups, potentially leading to lifelong delinquency, and contributing to the perpetration of violence. Therefore, young people are a particularly important target group when it comes to the prevention of crime. Currently, however, prevention programmes in the OECS are often under-funded and under-staffed (IMF, 2017[44]). Therefore, it is necessary to dedicate more financial and human resources to crime prevention programmes in the region. Community-based initiatives to support marginalised young people that involve civil society, the private sector, hospitals, parents and teachers have been successful in crime prevention in other countries (Al-Hassan et al., 2020[48]; World Bank, 2018[1]). In Togo, for example, professional integration programmes receive financial and technical support from different actors, including the private sector, line ministries, NGOs and civil-society organisations, and technical and financial partners (OECD Development Centre, 2017[49]). In particular, there is scope for increased private-sector involvement in crime prevention in the OECS region through private financing for, or direct private-sector management of, activities and projects to prevent young people from taking part in criminal activities (e.g. on-the-job training courses for at-risk youths or former prisoners and gang members) (IDB, 2017[47]).

Providing young people with more opportunities that offer an alternative to crime requires improvements in the quality of, and access to education, along with the creation of more good jobs. It would, indeed, be particularly important to enhance technical education and vocational training, and to expand the tertiary and post-secondary offering, both in general, and, in particular, in areas that are subject to skills shortages. Employment and re-integration programmes that are targeted at young criminals and marginalised youths, and that feature private-sector participation and the inclusion of families and communities could, moreover, support the creation of job opportunities for these young people (OECD Development Centre, 2017[49]; OECD Development Centre, 2017[49]).

Another important move across the region would be to strengthen the judicial system, the police force, and border security and control. In the OECS region, the capacity of these institutions tends to be limited in terms of both human and financial resources (World Bank, 2018[1]). Criminal justice is insufficiently equipped to handle the large volume of criminal cases in the region, resulting in high rates of pre-trial detention, and weak legal and supervisory systems. Given that OECS countries are small island states, controlling their sea borders can be difficult. Porous borders have been a challenge, in that they tend to facilitate the illicit movement of drugs, firearms and people through the region (US Department of State, n.d.[50]; IDB, 2017[47]).

Enhanced regional co-operation could make a positive contribution to the fight against crime. The geographical location of Caribbean islands, which makes them the perfect platform for trafficking drugs and guns, is a major vector of crime across the region, and this crime often transcends national boundaries. For example, the US government has identified the Eastern Caribbean as an important trans-shipment point for illicit narcotics, primarily from Colombia and Venezuela, and destined for North America, Europe and the Caribbean (US Department of State, n.d.[50]). For these reasons, efforts to fight crime call for regional solutions, such as close co-operation among OECS countries through information sharing, and also in safeguarding national borders. Harmonised legal and institutional frameworks for tackling crime constitute another opportunity. There have already been some efforts in this regard at the CARICOM level (Al-Hassan et al., 2020[48]).

References

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[1] World Bank (2018), “Organisation of Eastern Caribbean States Systematic Country Diagnostic”, Report Number: 127046-LAC, https://openknowledge.worldbank.org/bitstream/handle/10986/30054/OECS-Systematic-Regional-Diagnostic-P165001-1-06292018.pdf?sequence=1&isAllowed=y.

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Note

← 1. Approximately 33% of firms in St. Kitts, 26% of firms in Grenada, 25% of firms in Dominica, 23% of firms in St. Vincent and the Grenadines, and 20% of firms in St. Lucia and Antigua and Barbuda.

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