The report, entitled 'Towards a New Agenda for Growth' highlights the significant benefits that could accrue to the region if steps are taken to address the recent slowdown in growth and mounting debt and fiscal imbalances. However, without action, the study warns that the OECS "risks eroding many of the social gains won over the last three decades". The OECS membership comprises Antigua and Barbuda, Dominica, Grenada, St Lucia, St Vincent and the Grenadines, Montserrat, St Kitts-Nevis, Anguilla and the British Virgin Islands.

The new report, a companion to the Caribbean-wide study 'A Time to Choose', seeks to identify the causes of the slowdown in growth and offers possible options to reverse the trend. In the 1980s, the OECS sub-region experienced a relatively strong decade of growth estimated at 5.9% per year, driven mainly by tourism and banana exports. But growth in the OECS has been slowing down since the early 1990s as a result of a decline in productivity growth and a contraction of private investment. Similarly, the six independent OECS countries rank among the top 16 most highly indebted emerging economies in the world.

The OECS has been extremely competitive in attracting foreign investment (FDI), with relatively stable flows as a share of Gross Domestic Product (GDP) over the last two decades. The average ranking of the OECS as a whole on the UNCTAD (United Nations Conference on Trade and DEvelopment) FDI performance index in 2002 was 20th out of 177 countries.

In contrast, the study finds that the top ten exports from the sub-region are primary commodities with limited value-added and argues that this structure of production and exports has resulted from a reliance on special and differential treatment that has not served the region well over the long term.

"The states that comprise the OECS have considerable potential, but to realize it they must define a new development path and develop the skills, services and technology to leverage their natural advantages of language, proximity to the large US market, stable democracy and the environment," noted Caroline Anstey, World Bank Country Director for the Caribbean.

"Greater regional cooperation, will also be critical to boosting growth and competitiveness both nationally and regionally," she added.

Citing the case of the sub-region's key export, tourism, which has lost market share within the Caribbean and worldwide, the study stated that the outlook for the OECS in the global economy need not be a pessimistic one, and cited the success of other small states which have successfully integrated into the global economy.

"Improving the business environment implies tough choices for the governments of the sub-region," says senior economist and the report's principal author, Camille Nuamah.

"This report does not offer a silver bullet for growth but does suggest strategic agenda for both governments and the private sector to consider if they are to improve their capacity to compete globally."

The study suggests the formulation of a strategic sub-regional vision for the economy and key sectors as well as the pursuit of greater openness, competition and a more level playing field in the domestic market.