Tuesday, 23 December 2014

Healthcare in the Caribbean

The World Health Organization (WHO) published a ranking of global healthcare systems in their World Health Report 2000. According to an article in the June 29, 2012 edition of the Business Insider entitled “These are 36 CountriesThat Have Better Healthcare Than The US”:

 So controversial were the results that the WHO declined to rank countries in their World Health Report 2010...”.

WHO’s 2000 report ranked the eastern Caribbean nation of Dominica at 35, which made it one of those countries that had better healthcare than the United States, which was ranked 37. This was even more impressive considering that US per capita expenditure on healthcare was ranked 1 and Dominica 70.

WHO’s 2000 report also introduced an indicator called DALE: Disability-Adjusted Life Expectancy. DALE combined mortality data with the health and disability status of populations to determine an equivalent number of years in which life was expected to be in full health.

In that report, the US had a DALE rank of 24, which exceeded that of Dominica, at 26. Cuba had a DALE rank of 33, and Jamaica ranked 36. Health expenditures per capita for the latter two were ranked 39 and 89 respectively.

In Competitiveness In Small Developing Economies: Insights From The Caribbean, Professor Alvin G. Wint – former head of the Department of Management Studies at the University of the West Indies, Mona – dedicated an entire chapter to healthcare in Jamaica.

Referring to Jamaica’s ranks for DALE and per capita health expenditure, Prof. Wint stated that: “Jamaica has the second-largest (positive) gap (of 53 ranks) between its DALE ranking and its per capita health expenditure among all 191 WHO member countries”.

In fact, 9 out of the 16 Caribbean WHO member states had DALE ranks of at least 57, which put them in the top third of all the global healthcare systems ranked. So, the Caribbean does have a distinguished reputation to preserve in healthcare delivery.  

However, WHO’s discontinuation of its overall health system performance ranking has made evaluating performance of one system against another and one period over another very difficult. Nevertheless, some very useful observations can still be made without this ranking.

For this purpose, reference is made to WHO’s 2012 world health statistics, which is its most current data. DALE is now referred to as HALE: an acronym for Health Adjusted Life Expectancy; and, per capita healthcare expenditure at purchasing power parity (PPP) is taken for the year 2011.

Globally, HALE is 61.7 years for males and females, but 67.1 years in the “Americas”: the region in which the Caribbean has been grouped. Global health expenditure per capita (PPP) was Int. $ 1,055.20 in 2011, as against Int. $3,540.80 in the “Americas”.

In recognition of the link between healthcare performance and income level, WHO ‘s country data is disaggregated into four income levels: high, upper-middle, lower-middle, and low-income. The HALE and health expenditure per capita for the 16 Caribbean WHO member states is shown in the table below.

WHO Data -  Healthy Life Expectancy, 2012  Health Expenditure, 2011
Per Capita Exp. (PPP int. $)
Country Income         Male     Female         Both        Gov't     Private         Total
Antigua & Barbuda High 63 66 64 652.55 408.40 1,060.95
Bahamas High 62 67 64 1,157.01 1,167.70 2,324.71
Barbados High 64 69 66 1,024.60 425.13 1,449.73
Trinidad & Tobago High 58 64 61 740.63 629.70 1,370.33
Regional Avg. High 67 72 70 3,239.60 1,077.50 4,317.10
Cuba Upper-Mid 65 69 67 406.98 52.84 459.82
Dominica Upper-Mid 61 65 63 535.80 222.41 758.21
Dominican Republic Upper-Mid 65 67 66 260.99 260.24 521.23
Grenada Upper-Mid 60 66 63 333.12 360.64 693.76
St. Kitts Upper-Mid 61 66 63 374.86 671.49 1,046.35
St. Lucia Upper-Mid 60 66 63 325.95 534.04 859.99
St. Vincent Upper-Mid 61 65 63 435.47 83.65 519.12
Suriname Upper-Mid 63 68 66 287.62 215.93 503.55
Jamaica Upper-Mid 62 66 64 211.97 182.95 394.92
Regional Avg. Upper-Mid 64 68 66 360.70 225.70 586.40
Belize Lower-Mid 61 66 63 283.39 150.17 433.56
Guyana Lower-Mid 52 57 55 182.27 34.29 216.56
Regional Avg. Lower-Mid 56 58 57 60.00 104.20 164.20
Haiti Low 50 53 52 40.96 60.01 100.97
Regional Avg. Low 52 54 53 26.60 38.50 65.10

Cuba continues to excel. But, Dominica and Jamaica have not fared as well. Jamaica’s HALE now exceeds that of Dominica; and HALEs in Barbados, Dominican Republic, and Suriname now exceed that of Jamaica, even though they were ranked 53, 79 and 77 respectively in 2000.

Guyana and Haiti remain two of the Caribbean’s worst performers with regard to HALE. The Bahamas, which was formally the other poor performer, has significantly improved its performance, and has subsequently been replaced by Trinidad and Tobago.

Regional averages for the respective income levels of the “Americas” are also shown for comparison in the table above. Regional averages for HALE show a distinct improvement with successive increases in income level, but this pattern is only distinct up to the upper middle-income level for the Caribbean.

Except in the upper middle-income Organization of Eastern Caribbean States (OECS) of Dominica, Grenada, Saint Kitts, Saint Lucia, and Saint Vincent, HALEs in the remaining upper middle-income Caribbean states either equal or exceed that of the high-income ones.

Dependent Caribbean high-income overseas territories are not listed in WHO data. So, a comparison of their performance to these upper middle-income states is not possible. But, the middle-income OECS outperformed Trinidad and Tobago which, with the exception of St. Kitts, was also the case in 2000.

HALEs in the Caribbean are typically lower than wider regional averages. The only exceptions are Cuba, Dominican Republic and Suriname in the upper-middle income category and Belize in the lower-middle income category.

But, health expenditures per capita are typically lower. Excluding Saint Vincent, this is not the case in the remaining upper middle-income OECS, nor is it the case in the lower-middle income and low-income states. Their per capita healthcare expenditures exceed their respective regional averages.

In the high-income category, Antigua and Barbuda had the lowest healthcare expenditure per capita and the Bahamas the highest, although both have the same HALE. In the upper middle-income category, Jamaica has the lowest healthcare expenditure per capita and St. Kitts the highest.

This pattern of lower HALE and per capita health expenditure is characteristic of global performance versus that of the “Americas”. Data from the table was therefore plotted against that of the global average, and is shown in the figure below.

Caribbean HALE vs Expenditure

The box is divided into quadrants. The horizontal line represents the global average HALE, and the vertical line represents the global average health expenditure per capita. Therefore, the point at the intersection of these lines is the global average for HALE and health expenditure per capita.

Points above the horizontal line represent HALEs higher than the global average. Points to the left of the vertical line represent health expenditures per capita lower than the global average; and vice versa. So, the quadrants represent four distinct conditions.

The top left, occupied by 11 states, indicates that their HALEs equal or exceed the global average and their per capita health expenditures are lower than the global average. The top right, occupied by Barbados and The Bahamas, indicates their HALEs and per capita health expenditures are higher.

The bottom left, occupied by Guyana and Haiti, indicates their HALEs and per capita expenditures are lower. The bottom right, occupied by Trinidad and Tobago, indicates that its HALE is also lower, but its per capita expenditure is higher than the global average.

It is now obvious that most Caribbean states have higher than average healthy life expectancies, though at various efficiencies. As stated before, Haiti, Guyana, and Trinidad and Tobago are the worst performers; and Cuba is the best. But, the other states can be organized into three HALE groups.

Dominica, Grenada, St. Kitts, St. Lucia, St. Vincent, and Belize all have HALEs of 63, with Belize being the most efficient, with the lowest per capita health expenditure, and St. Kitts the least. Belize is the only lower middle-income economy in this group of otherwise upper middle-income OECS.

Antigua and Barbuda, the Bahamas, and Jamaica all have HALEs of 64, with Jamaica being the most efficient and The Bahamas the least. As before, Jamaica is the only upper middle-income state in this group of otherwise high-income states.

Finally, Barbados, Dominican Republic, and Suriname all have HALEs of 66, with Suriname being slightly more efficient than the Dominican Republic, and Barbados the least efficient: Barbados being the only high income state in this group of otherwise middle-income states.

For these groups, the trend is for the state (or states) from the lower-income category to be the most efficient at using its health expenditure. But, it is remarkable that the Dominican Republic, Suriname, Barbados and the Bahamas have transformed their systems in the 12 years following their ranking.

It would have been instructive to examine how these four managed this achievement. Instead, reference is made to Professor Wint’s findings on Jamaica from the WHO’s 2000 report, which states:

“...Jamaica’s health system has performed relatively well, and is reasonably competitive, because the structure of the health system places a greater emphasis on primary care than systems that are more driven by a hospital and secondary/tertiary care focus.”

This flies in the face of Caribbean ambitions to offer Medical Tourism, with its emphasis on systems driven by a hospital and secondary/tertiary care focus; and indicates that the Caribbean’s lower per capita health expenditures might not translate into a competitive advantage in Medical Tourism.

The Caribbean has also not performed favourably, in comparison with other nations in the “Americas”, with regard to healthy life expectancy. So, Caribbean governments in general need to improve their respective healthcare systems.

They need to prioritize healthcare delivery to their own populace and leave diversification of healthcare services to the private sector and, better yet, to foreign direct investment. Otherwise, how will the local healthcare system improve, and who else will drive this improvement?

Dominica has already proven that it is possible to have better healthcare than the US with better use of the resources available in the Caribbean. So, why should we be content with simply being above the global average? We have the potential for much better.

Prospects for Medical Tourism in Jamaica

Friday, 23 May 2014

Doing Business in the Caribbean 2014: CARIFORUM needs Reform, part 2

The article “Growth to Accelerate in Latin America and the Caribbean ...”, in the Annual World Economic Situation andProspects 2014 report of the UN Department of Economic and Social Affairs (UNDESA), indicates that Haiti and the Dominican Republic will lead the Caribbean in growth by 2015.

The global competitiveness of both from 2012 to 2013 are recorded in Doing Business2014 – Regional Profile: Caribbean States, a co-publication of the World Bank and International Financial Corporation, which also records the global competitiveness of eleven other Caribbean islands.

Except for Puerto Rico, all these islands are members of the Caribbean Forum (CARIFORUM); and beside Haiti and the Dominican Republic, all are Small Island Developing States (SIDS). In comparing SIDS to non-SIDS, part 1 of this article indicated that non-SIDS performed worse in Doing Business 2014.

The region was ranked 90, of the 189 nations examined.  Ten indicators, across the four stages of the business cycle (i.e. start-up, operation, expansion and insolvency), were evaluated to determine ranks. Figure 1 maps the performance of the Caribbean, and Haiti in particular, across these indicators.

Figure 1: Global Competitiveness Map of the Caribbean
Points closer to the centre indicate better performance. Hence, Haiti which has an overall rank of 177 performed worse in eight of these indicators when compared to the Caribbean region, which has the higher rank. But, it should be noted that performance in each indicator varies about the overall rank.

To improve on overall rank, it stands to reason that the worse indicators need to be addressed as a priority. For the Caribbean, priority indicators starting from the worst seem to be: registering property [143], enforcing contracts [123], resolving insolvency [106], paying taxes [104], and getting credit [102].

As a point of interest, “Getting Credit” is not a priority indicator for Puerto Rico, and Trinidad and Tobago, which have the two highest overall ranks in the Caribbean. Puerto Rico, with the highest overall rank, also has the highest rank in this indicator at 13: followed by Trinidad and Tobago at 28.

When considering only CARIFORUM member states rather than islands of the regional profile, there are marked differences. The priority indicators for the SIDS group do not change, but their order of priority does. For the non-SIDS group, both their priority indicators and order of priority change significantly.

Figure 2 maps the global competitiveness of CARIFORUM SIDS versus non-SIDS. The SIDS group does not include Puerto Rico, and the non-SIDS group includes Guyana, Suriname and Belize - CARIFORUM member states – which were not included in the regional profile.

Figure 2: Global Competitiveness Map of the Caribbean - SIDS vs. non-SIDS
The overall rank for SIDS is 84. The priority indicators starting from the worst are: registering property [147], enforcing contracts [132], getting credit [105], resolving insolvency [101], and paying taxes [100]. Of note, the ranks of the first three priority indicators are worse than they were for the regional profile.

The overall rank for non-SIDS is 135. In this case, the priority indicators are: starting business [155], getting credit [144], registering property [136], resolving insolvency [135], and protecting investors [132]. “Enforcing Contracts” and “Paying Taxes” are not priority indicators for non-SIDS.

Nevertheless, international assistance is needed to address “Registering Property”, “Enforcing Contracts”, and “Getting Credit”. In the former, Guyana ranked highest at 111. Only Antigua and Barbuda was higher than 81 in the next; and, only Trinidad and Tobago was higher than 86 in the latter.

The importance of “Enforcing Contracts” is self evident: especially when considering foreign direct investment. Which foreign enterprise is going to invest in an unfamiliar location where enforcing contracts is known to be a problem?

However, the significance of “Registering Property” should not be underestimated. According to Peruvian social scientist Hernando DeSoto, eighty per cent of the World is under-capitalised because property owners cannot generate capital from their assets.

Using Haiti as an example, DeSoto stated that the total assets held by its poor amount to over 150 times all foreign investment made in that nation since its independence in 1804. This is particularly alarming when considering that Haiti’s rank in this indicator is better than the average Caribbean state.

But, it is incomprehensible that “Getting Credit” is a priority indicator for SIDS, when so many of these states have developed reputations as international financial centres. Is this due to underdeveloped capital markets, an absence of credit bureaus, or do we not consider local businesses acceptable risks?

The remaining priority indicators can be addressed using the model of the Asia-Pacific Economic Cooperation (APEC). As mentioned in part 1, APEC is a forum committed to the liberalization of trade and investment, business facilitation, and economic and technical cooperation.

According to “APEC: Sharing Goals and Experience” in Doing Business 2013: SmarterRegulations for Small and Medium-Sized Enterprises, APEC’s 2009 action plan has shown “encouraging early results” evident in the marked improvement of their members over non-APEC states.

“APEC sets measurable targets with specific time-lines” to facilitate monitoring and evaluation of performance. One set of targets is based on the “Doing Business” indicators. APEC’s 2009 Doing Business Action Plan sets the target of making business 25 per cent cheaper, faster and easier by 2015.

In addition, “… sustained engagement by top government officials from every APEC member is needed to accelerate progress towards the goals it has set for itself”. APEC also encourages capacity building activities amongst its members to support the attainment of these goals.

Five Doing Business indicators are selected, and the respective “champion economies” are chosen to provide capacity building assistance to the other members. These “champion economies” not only share information and experience, but also undertake personalized diagnostic studies.

“Other regional bodies can learn from this model of capacity building”, and CARIFORUM should follow suit. It has at least three states ranked within the top third in global competitiveness for each of the four remaining priority indicators. So, choosing champion economies should not be a problem.

Belize is the only non-SIDS which could be considered a champion economy in two indicators: “Resolving Insolvency”, for which it ranked 30, and “Paying Taxes”, with a rank of 48. Suriname is the only other non-SIDS champion economy and this is also in “Paying Taxes”, for which it ranked 50.

Coincidentally, “Paying Taxes” is the only indicator which has only two possible SIDS champion economies: Bahamas and St. Lucia. Both ranked 45. Otherwise, champion economies are practically all SIDS, which could affect the efficacy of capacity building assistance to non-SIDS.

There are two priority targets unique to non-SIDS: “Starting Business” and “Protecting Investors”. Addressing “Starting Business” is not likely to be a problem for SIDS champion economies. But, it is suspected that addressing “Protecting Investors” could be.

This indicator has six possible champion economies: all SIDS, and all Anglophone. So, the legal systems of the predominantly non-Anglophone non-SIDS will be totally unfamiliar. Consequently, international assistance may also be required for non-SIDS to address this indicator.

This highlights the problem of dealing with non-SIDS as a unit. Their present amorphous nature especially with regard to language and institutions makes this difficult. Probably when other states with like backgrounds join CARIFORUM, this may be resolved.

In “DoingBusiness in the Caribbean: Lessons from Singapore”, I benchmarked “DoingBusiness 2013” ratings of Barbados, Jamaica, and Trinidad and Tobago, in one indicator, against the top ranked Singapore, which is again ranked first in “Doing Business 2014”.

The chosen indicator was “Dealing with Construction Permits”. But, the above indicates that this is not one of CARIFORUM’s priority indicators. In fact, ten possible champion economies could be identified in this indicator: the highest number in any of the priority indicators.

Of the original states benchmarked, only Trinidad and Tobago could not be considered a champion in this indictor. In the 2013 report, they were ranked 101; and in the 2014 report, they were ranked 77: both ranks being below the corresponding non-SIDS rank for the respective years.

Nevertheless, this is a significant improvement in rank. In the 2013 report, this indicator was one of Trinidad and Tobago’s priority indicators. It still is. But, this improvement contributed to Trinidad and Tobago becoming the only CARIFORUM state that has improved its overall rank in the current report.

If CARIFORUM follows their lead, the deterioration of its performance may be halted, or even improved. But, a concerted effort needs to be made to improve the region’s global competitiveness. Otherwise, the growth expected into 2015 will only be short-lived. CARIFORUM needs reform now.

Greater Caribbean Business in 2015

Saturday, 22 March 2014

Doing Business in the Caribbean 2014: CARIFORUM needs Reform

Doing Business 2014: Understanding Regulations for Small and Medium-Sized Enterprises, is one of a long-standing series of co-publications of the World Bank and International Financial Corporation, which records the global competitiveness of 189 nations from 2012 to 2013. Sixteen of these nations are Caribbean: Fifteen are CARIFORUM member states.

The current and previous ranking of these nations is shown in table 1. My immediate observation was that the Caribbean’s longest-standing independent nation – Haiti – was ranked last at 177, while the only non-CARIFORUM and dependent nation – Puerto Rico – was ranked first at 40; and these positions were unchanged from the previous year.

Caribbean Nation
Population (Millions)
Income (US $)
Antigua & Barbuda
Bahamas, The
Dominican Republic
Puerto Rico (US)
St. Kitts & Nevis
St. Lucia
St. Vincent & the Grenadines

In “Political Independence and Economic Development in the Caribbean”, I took a look at the Caribbean phenomenon that larger independent nations, like Haiti, generally have lower-income economies compared to the smaller dependent ones, like Puerto Rico: as it is in this case.

The article concluded that initial obstacles faced by the then newly independent nations were being overcome notably through the effort of the Organization of Eastern Caribbean States (OECS) and the Caribbean Community (CARICOM). However, it is now apparent that much work still remains to be done.

In “Doing Business in the Caribbean: Lessons from Singapore”, I benchmarked the performance of Barbados, Jamaica, and Trinidad and Tobago in one indicator, from “Doing Business 2013”, against the top ranked Singapore, which is once again first in “Doing Business 2014”.

In my article, I indicated that Singapore shared a similar history and, in the 1960s, similar economic structures and institutions to the Anglophone Caribbean islands. But, it has subsequently achieved a greater level of development, and now consistently excels in the Global Competitiveness Index.

Singapore is now host country of the APEC Secretariat. If you have never heard of APEC, neither did I. But, APEC stands for Asia-Pacific EconomicCooperation. Founded in 1989, it is a forum that is committed to three main pillars: liberalization of trade and investment, business facilitation, as well as economic and technical cooperation.

APEC comprises 21 nations whose economies constitute 54% of the world’s GDP and 44% of global trade. If that is not impressive enough, the four highest ranked nations are members of APEC: including USA: on whom Puerto Rico is a dependant.

Regional factors play a part in driving reforms in the business regulatory environment of APEC member states. APEC concentrates reform in institution, regulation, and policy to facilitate more efficient markets and reduced trade barriers in their region.

There is still much variation in the performance of APEC member states: ranging from Singapore at 1 to Indonesia at 120. However, variation in the Caribbean amounts to 137, which has increased from the previous year: because Puerto Rico advanced 1 place and Haiti fell 3 places. But, no member of APEC has a low-income economy, such as Haiti.

The variation is similar but still larger when comparing Puerto Rico to Suriname: which has an upper, middle-income economy and ranked second to last among Caribbean nations. But, Indonesia is a lower, middle-income economy. So, this is no real comparison: especially considering that APEC outperforms the Caribbean by approximately 40 ranks.

“Political Independence and Economic Development in the Caribbean” also focused on the Anglophone Caribbean nations that were long-standing members of OECS and CARICOM. This group comprises twelve of the fifteen CARIFORUM member states ranked, and shows much less variation in their rankings than their non-Anglophone colleagues, who had the lowest ranks.

The CARIFORUM states of Dominican Republic, Haiti, and Suriname had the three lowest ranks in the Caribbean. They speak different languages; their economies vary from low to upper, middle-income; and, they have significantly different population and land sizes: though Haiti and Dominican Republic really occupy a single land mass: Hispaniola.

When the Anglophone nations of Belize and Guyana are added to this group, the five members occupy the lowest six ranks on the Caribbean nations. But, the characteristics of this group, as mentioned above, remain unchanged. For ease of reference, the eleven remaining nations shall be referred to as the small island developing states (SIDS).

The ranks in both groups typically fell from the previous year. Only Suriname improved its rank in the former. But, Puerto Rico, and Trinidad and Tobago improved in the latter. Nevertheless, the SIDS fell in ranks by an average of approximately 5 places compared to less than a place for non-SIDS.

The Dominican Today publication of 13 January 2014, "World Bank Project Aims to Make Companies More Competitive", makes mention of the visit of a World Bank delegation to the Dominican Republic to start a “Competitiveness Project” in conjunction with their Economy Ministry. But, the problem is really a regional one, and CARIFORUM should drive the reform needed for capacity building.

The overall performance in “Doing Business 2014” has deteriorated from last year: both in rank and variation. Puerto Rico is not a member of CARIFORUM, so the variation within CARIFORUM member states actually fell: but, this was due to a faster fall in ratings by the better performing SIDS group relative to their non-SIDS counter parts.

Nevertheless, the United Nations has projected greater growth within the non-SIDS group this year. So, reform is needed for them to sustain this growth. Finally, the naysayers who are opposed to any regional grouping should consider competing against the likes of APEC by themselves.

As before, “we have to acknowledge that Caribbean nations are uncompetitive, be willing to change and apply bold and innovative solutions”. In my next article, I will discuss APEC’s approach, diagnose the Caribbean’s performance, and recommend target areas for CARIFORUM’s action.

Business in the Caribbean 2014: CARIFORUM needs Reform, part 2

Singapore: Example to the Caribbean in Doing Business