MONEY MATTERS
IMF says Caribbean governments need to reduce public debt
Regional governments have been cautioned to tighten their financial regulatory controls. The warning comes from the International Monetary Fund (IMF) as it launched its Regional Economic Outlook released in Bridgetown in October.
“Financial sector fragilities in the region are more troubling. In the Eastern Caribbean Currency Union (ECCU), financial sector health indicators have continued to deteriorate,” IMF Western Hemisphere Deputy Director David Vegara said.
Making specific mention of the intervention of the ABI Bank and the pending resolution to the British American Insurance Company and Clico, Vegara said that these were “trying times.” He added that public debt continues to be a major problem.
“Public debt in most Caribbean countries has increased sharply since the crisis. The increase largely reflects a deep and prolonged economic recession, which has affected debt dynamics,” he said.
According to Vegara, countries carrying a heavy debt burden could feel further pressure by a further slowdown in advanced economies. “Greater resolve is required in reducing public debt (which is up over 9 per cent of GDP since the crisis) and resisting fatigue in some countries, where pressure to increases wages and subsidies have intensified. Fiscal consolidation efforts should, to the extent possible, preserve growth and competitiveness by avoiding step cuts in infrastructure spending,” Vegara said.
14 | BusinessFocus • December/January 11/12
The Washington-based institution singled out Barbados, St Kitts & Nevis, the Bahamas and Jamaica for their spiralling debt, which it says exceeds acceptable levels.
But even as the IMF has issued its prescription from the Caribbean, a regional financial expert has warned that belt-tightening measures should not cause additional burdens for citizens and residents.
“We have to be careful in the region that we do not shoot down the economies of the region by taking very austere measures by attempting to connect fiscal imbalances immediately or for a short period of time,” Executive Chairman of First Caribbean International Bank Michael Mansoor said. Mansoor was among the panellists commenting at the launch of the Regional Economic Outlook.
“In these circumstances what we really need to do is to focus on our ability to improve our infrastructure by buying into major financial resources that we have not been accustomed to and we have to work on the other side of the globe, given the fact that on this side of the universe, those economies Europe, US are very constrained,” he added.
According to the IMF, the region is finally exiting the global recession. However the fund has warned that growth remains slow and tourism- dependent countries are particularly vulnerable to the economic slowdown of larger economies.
By Anika E Kentish Used with permission from the Daily OBSERVER
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88