Similarly in bananas, the Caribbean countries are the highest cost producers in the world, rooted in low land productivity and high labour and transportation costs. Given the impending further erosion of preferential arrangements for sugar and bananas, in the next five years, few (if any) of the current regional exporters will be able to export profitably.
This means that if exports are to be maintained, government subsidies to cover losses could rise to unsustainable levels. This brings us to the imperatives of economic restructuring: With the current open trade regime, the challenge for the Caribbean is to quickly develop new high productivity sectors that could drive the region’s developmental thrust.