Debt situations in Caribbean countries need to be addressed
Web Posted - Wed Feb 08 2006
THE debt crisis in some Caribbean countries is reaching alarming proportions and they are being told to fix it. This is one of the worrying signs confronting Caribbean economies and which has drawn the attention of the Barbados-based Caribbean Development Bank.
Yesterday top CDB officials met with the local press to review the performance of regional economies in 2005. CDB President, Dr. Compston Bourne and Country Economist Kelvin Dalrymple said there are serious public debt and public finance issues facing the Bank's Borrowing Member Countries (BMCs).
The debt situation is very critical in several countries, Dr. Bourne told the media.
The ratio of debt service obligations to current revenue is very high, he further said, while noting that this means that the fiscal capacity to undertake other expenditures is reduced.
Dalrymple said that in 2005 the region continued to struggle with public debt and public finances management.
The Economist who had earlier reported that real GDP in the BMCs as a group slowed in 2005 when compared to 2004, said that many of these countries are still above the 60 per cent debt/GDP level.
He maintained that debt sustainability is a large part of the agenda going forward. As such, a closer scrutiny has to be made with respect to debt management.
Acknowledging that CDB and CARTAC were among institutions helping the region to address these difficulties, the problems are serious and their solution require strong and sustained effort by the authorities in each country.
Dalrymple said that as a group, Caribbean countries recorded a slower growth in 2005.
As to whether the economies are in crisis, Dr. Bourne said he does not think so. They are in trouble, but if action is not taken to arrest some of the trends, particularly on the fiscal side, then they will be in crisis, he added.
Dalrymple attributed the lower GDP to slower growth in tourism, and a decline in output of agriculture and manufacturing.
Increases were recorded in construction, financial services, and in mining and quarrying.
Hurricane-related re-building of public and private structures... and preparations for the Cricket World Cup in 2007 accounted for a significant part of the growth, said the Economist.
The countries are still grappling with lack of production possibilities, he said while noting that a number of sectors are either into decline or growing moderately.
It is a concern for those countries and the bank, and therefore, much work has to be done in diversifying the regional economies.
Looking ahead, Dalrymple said that growth in construction will continue.
Construction is a foreign exchange using sector and he suggested that more of the region's capacity be invested in foreign exchange earning activities to enhance the earning of foreign exchange.
He also anticipates more growth in tourism, although there will be some constraints on cruise passenger arrivals.
Web Posted - Wed Feb 08 2006
THE debt crisis in some Caribbean countries is reaching alarming proportions and they are being told to fix it. This is one of the worrying signs confronting Caribbean economies and which has drawn the attention of the Barbados-based Caribbean Development Bank.
Yesterday top CDB officials met with the local press to review the performance of regional economies in 2005. CDB President, Dr. Compston Bourne and Country Economist Kelvin Dalrymple said there are serious public debt and public finance issues facing the Bank's Borrowing Member Countries (BMCs).
The debt situation is very critical in several countries, Dr. Bourne told the media.
The ratio of debt service obligations to current revenue is very high, he further said, while noting that this means that the fiscal capacity to undertake other expenditures is reduced.
Dalrymple said that in 2005 the region continued to struggle with public debt and public finances management.
The Economist who had earlier reported that real GDP in the BMCs as a group slowed in 2005 when compared to 2004, said that many of these countries are still above the 60 per cent debt/GDP level.
He maintained that debt sustainability is a large part of the agenda going forward. As such, a closer scrutiny has to be made with respect to debt management.
Acknowledging that CDB and CARTAC were among institutions helping the region to address these difficulties, the problems are serious and their solution require strong and sustained effort by the authorities in each country.
Dalrymple said that as a group, Caribbean countries recorded a slower growth in 2005.
As to whether the economies are in crisis, Dr. Bourne said he does not think so. They are in trouble, but if action is not taken to arrest some of the trends, particularly on the fiscal side, then they will be in crisis, he added.
Dalrymple attributed the lower GDP to slower growth in tourism, and a decline in output of agriculture and manufacturing.
Increases were recorded in construction, financial services, and in mining and quarrying.
Hurricane-related re-building of public and private structures... and preparations for the Cricket World Cup in 2007 accounted for a significant part of the growth, said the Economist.
The countries are still grappling with lack of production possibilities, he said while noting that a number of sectors are either into decline or growing moderately.
It is a concern for those countries and the bank, and therefore, much work has to be done in diversifying the regional economies.
Looking ahead, Dalrymple said that growth in construction will continue.
Construction is a foreign exchange using sector and he suggested that more of the region's capacity be invested in foreign exchange earning activities to enhance the earning of foreign exchange.
He also anticipates more growth in tourism, although there will be some constraints on cruise passenger arrivals.
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