By Robin Wigglesworth From Financial Times

PHOTO:  ©AP

Caribbean countries are lobbying furiously for an extensive international debt relief and investment programme, as politicians become increasingly anxious over the social impact of the region’s economic crisis and the resulting government austerity.

Most of the dozen anglophone countries in the tropical archipelago off the coast of the US are struggling with large government debts and lacklustre economies after the global financial crisis hurt tourism, the dominant industry of the Caribbean.

Since 2010, St Kitts and Nevis, Grenada, Belize, Antigua and Barbuda and Jamaica – twice – have had to restructure their debts and enter International Monetary Fund programmes. Others, including Barbados, are also being forced to impose austerity.

This is causing social hardship, exacerbating already high crime rates and even endangering the health of their democracies, some senior politicians fear. Government debts of the Caribbean as a whole amounted to roughly 70 per cent of the region’s GDP last year, or $47bn, according to the IMF.

“There is not much more we can ask our people to do, so the international community has to help,” said Denzil Douglas, prime minister of St Kitts and Nevis. “We are highly indebted because we are so small and so vulnerable that even small shocks – whether financial or natural – can have a huge impact.”

The lobbying efforts are primarily happening under the aegis of the Commonwealth, the group of former UK colonies that has 12 Caribbean coastal and island members. They hope to get something akin to the IMF and World Bank’s “Highly Indebted Poor Countries” programme.

HIPC, first established in 1996, has provided $75bn of debt relief and concessional loans to 36 poor, mainly African countries in return for economic and political reforms. But HIPC is only available to low-income countries, while most of the Caribbean is classified as middle-income or higher. That is not deterring local politicians and officials, who have pressed their case at a series of private bilateral and multilateral meetings with Christine Lagarde, the IMF managing director, and Jim Yong Kim, the World Bank president.

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