From Caribbean360

Representatives from across the region will attend the meeting organised by the Permanent Secretariat of the Latin American and Caribbean Economic System (SELA) with the General Secretariat of the Association of Caribbean States (ACS).

PORT-OF-SPAIN, Trinidad, Thursday February 13, 2014, CMC – A meeting aimed at analysing the debt situation in Caribbean countries and the policies for debt relief will be held here on February 24.

Representatives from across the region will attend the meeting organised by the Permanent Secretariat of the Latin American and Caribbean Economic System (SELA) with the General Secretariat of the Association of Caribbean States (ACS).

The event will also focus on different approaches that respond to the particular characteristics of the economies in the region, exchange experiences among countries in the sub-region related the subject of debt relief and disseminate information about this reality among countries and integration organizations in Latin America and the Caribbean.

It is also aimed at identifying debt relief policies, particularly measures to promote investment and to spur economic growth, reach conclusions and recommendations with operational use for affected countries, as well as strategic information for other Member States.

A representative from St. Kitts and Nevis has been invited to make the first presentation during entitled “National experience for overcoming debt burden.” Presentations will also be made by representatives from Jamaica, Grenada and Barbados.

Debates will be based on the document “Debt Burden and Fiscal Sustainability in the Caribbean Region” prepared by the Permanent Secretariat of SELA.

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Barbados debt levels will hopefully stabilise by 2016 – IMF

From Caribbean360

The IMF said “a comprehensive and sustained fiscal effort” was needed to reduce vulnerabilities and lower public debt.

WASHINGTON D.C., United States, CMC – The International Monetary Fund (IMF) says fiscal measures recently introduced by the Barbados government will, if fully implemented, should stablise debt levels by 2016.

“However, downside risks are considerable and failure to implement corrective policies could result in a disorderly adjustment process. Even with full implementation, fiscal financing pressures and external sector sustainability would remain challenging,” the Washington-based financial institution said Wednesday.

It noted that the island’s economic performance has been weak and public debt is high.

“Foreign reserves are under pressure as fiscal and external imbalances widened in 2012 and further in 2013. Recognizing the need for urgent action, the authorities announced ambitious budget consolidation proposals in 2013 aimed at strengthening the fiscal position and arresting the slide in reserves,” the IMF said.

It said that Freundel Stuart administration “stated clearly their desire and intention to preserve the exchange rate peg-a position supported strongly by the private sector and civil society in Barbados”.

The IMF said that as a result of this strategy, the discussions with the IMF delegation focused on the fiscal measures needed to address immediate pressures, making monetary policy consistent with the nominal exchange rate anchor, a medium-term fiscal framework, and reforms to boost competitiveness.

The IMF said “a comprehensive and sustained fiscal effort” was needed to reduce vulnerabilities and lower public debt.

“There is scope to raise tax revenues by strengthening revenue and customs administration and by reducing widespread exemptions. However, spending reductions will be critical, especially targeting the wage bill and inefficiencies in public enterprises where stronger governance is needed.”

The Washington-based lending agency said that the social safety net must be preserved, but benefits should be better targeted to strengthen protection for the most vulnerable, raise efficiency and lower costs.

“A medium-term fiscal anchor is needed to guide policy formulation and accountability. A debt-to-GDP target of 85 percent is recommended by 2018/19. Monetary policy should be more consistent with the fixed exchange rate regime,” the IMF said, adding that closer monitoring of the financial system is required in view of elevated non- performing loans (NPLs) and the risk of a deeper sovereign-financial feedback loop

It said that the growth strategy should focus on reducing business and labour costs.

The Stuart government has adopted a strategy of laying off at least 3,000 public servants this year as it seeks to reverse the ailing economy. In addition, the government has said it would reduce expenditure in other areas.

Meanwhile, the Barbados Central Bank said that the recommendations outlined by the IMF were in keeping with the policies of the Barbados government.

The Central Bank said revenue administration was being strengthened with the establishment of the Barbados Revenue Authority and that non-statutory revenue exemptions which do not support foreign exchange earning sectors or support the society’s most vulnerable were being reduced.

It said the public sector wage bill is being reduced as a result of the layoffs and a programme of attrition and that a medium-term strategy for the further reduction in the fiscal deficit remains in place;

“The Central Bank of Barbados’ lending to Government will be reduced as the lower deficit is funded from domestic liquidity,” the bank said, adding that monitoring of the financial system was being intensified in line with the recommendations of the Financial Sector Stability Assessment (FSSA).

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