Low growth and high debt in the Caribbean

Finance Ministers, Financial Secretaries and Central Bank Governors from the ECCU countries were invited by the International Monetary Fund (IMF) to participate in a two-day high level conference in Trinidad and Tobago. The conference commenced early Tuesday morning at the Hyatt Regency in Port of Spain and saw participants not only from the Caribbean region but also from the international community including countries such as Australia, Ireland and the UK.
High-ranking IMF officials were also present to participate in what they considered to be “constructive dialogue on the economic challenges facing the Caribbean” under the theme, “Rethinking Policy to Address Low Growth and High Debt in The Caribbean.”
In his opening address, Minister of Finance (Trinidad and Tobago) Larry Howai said he is particularly looking forward to discussions at the conference for it allows for policy-makers from around the region to share their experiences and provide some fresh perspectives on the issues that shape the region’s future.
“In the current context the issues of low growth and high debt are high on the agenda. Both the timing and the theme of this forum are particularly relevant and timely given the dire circumstances of the region,” he said.
“The region is clearly at a crossroads and is now called upon to make critical policy choices that will determine our fate in the global economy of the future,” said Howai.
President of the Caribbean Development Bank (CDB), Warren Smith says one of the objectives of the conference is to create policies that will improve the lives of the people of the Caribbean. He adds that this would not be an easy task, while he also noted that the global financial and economic
crises poses clear and
present danger to the livelihoods of most Caribbean people.
“Even with few Caribbean economies which are driven by certain demands in the fast growing economies in the far East and South America where escalating monthly prices and demands now face the prospect of slowing growth as the net prices in Europe and the little growth in the United States begin to adversely affect these dynamic poles of growth.
“For the first time in half a century, our region and the rest of the world face a collective vulnerability whose redress requires collective action. Surmounting this challenge requires that we turn a new page. We must assemble fresh ideas and novel approaches to resolving old issues and for tackling new challenges that are going to emerge,” said Smith.
He went on to share his opinion of a possible strategy that may help alleviate some of the financial burdens of the region if each country were to join in the battle.
“This calls for a broad base, collective and collaborative response. Ultimately, we need the private sector. We need government, civil society, labour and the donor community at the table. We are more likely to succeed as a region if we share our burdens and learn from the experiences of our Caribbean neighbors.
“I am convinced that the challenges confronting our region are surmountable. That said, sustainability of an upward growth trajectory demands that policy-makers commit to pursuing credible policies and to secure full stakeholder support by engaging them in early dialogue.”
Deputy Managing Director of the IMF, Min Zhu says the forum is a great opportunity to exchange views on how the Caribbean region is navigating in the current global economic environment. As he went on to address the participants, Zhu took the time to congratulate the region for its distinct achievements at the recently concluded 2012 Olympic games in London. He
added that while the
region celebrates this success, it must also focus on what can be improved today, as the global environment is making the jobs of policy-makers and advisors very challenging.
“Downside risks continue to be high, reflecting delayed or insufficiency policy action including in the Euro-zone and the United States. In addition, growth prospects in emerging market countries have weakened and commodity exporters are vulnerable to declining prices.
“Looming on the horizon is the spectre of rising food prices that could pose a substantial challenge for the Caribbean, given its high dependence on global markets for food, as well as the large share of food in the final consumption,” said Zhu.
St Lucia’s representative at the conference, Director of Research and Policy in the Ministry of Finance, Embert St Juste says there is much to learn and pull out of this two-day conference.
He says while St Lucia is on the verge of implementing Value Added Tax (VAT)  this October, this presents an ideal opportunity to learn from the wider region and international community, lessons and ideas on how to successfully implement VAT.
“We have a significant fiscal imbalance in St Lucia where we are trying to improve our economy and or revenue, so this forum will definitely provide us the opportunity to engage the wider Caribbean in searching for ways to minimize that problem. St Lucia is also about to implement VAT and that is one of the other initiatives taken by the government to rebalance the fiscal position. A number of countries have implemented VAT and taken fiscal reform so we all can share ideas,” said St Juste.
He added that his presence at the conference came as a result of the Minister of Finance, Dr Kenny Anthony being away in South Africa leaving the Permanent Secretary in the Ministry of Finance, Isaac Anthony next in line to attend. However, with an internal restructuring of the Ministry which resulted in two sections, Anthony was reassigned as the PS in the Ministry of Economic Planning and National Development.
The new Permanent Secretary, Reginald Darius assumed his new post as the PS of Finance on Monday and therefore was not able to attend the Conference.