IMF’s listening ear
Barbados now has the opportunity to have its economic strategy clearly understood by the International Monetary Fund (IMF) which has promised it will listen to local and regional views.
This opportunity emerged yesterday at the start of the high-level forum hosted by the IMF in collaboration with the Ministry of Finance in?Trinidad and Tobago and the Caribbean Development Bank (CDB) at the Hyatt Hotel & Resort in Port of Spain.
And Governor of the Central?Bank of Barbados, Dr Delisle Worrell, indicated he would sieze it with both hands.
“In Barbados, we are very clear about the strategy for stabilization and growth. Our beef is that it is not well understood in Washington, so we are determined that we will be conveying that message at this meeting, and we hope that they will be listening,” he told the MIDWEEK?NATION during a break in the intense two-day talks.
Worrell added that deputy managing director of the IMF, Min Zhu, had indicated the Fund’s intention to listen to the region’s views on the way forward; and as a result, it was necessary for Barbados and its neighbours to articulate their economic strategies strongly during this forum entitled Rethinking Policy To Address Low Growth and High Debt In The Caribbean.
“The most important thing and what will really make this meeting valuable is the dialogue, and the point that Mr Min Zhu made, which we are going to be focusing on, is that he wants to listen to what the region believes is the way forward,” Worrell explained, adding that he had just published an article on stabilization and growth policy for small states which would be circulated to the IMF group as well.
Earlier, Min Zhu, in the forum’s opening speech, declared that while the Caribbean compared well with other countries in the Western Hemisphere in terms of political stability, sporting achievements and a business-friendly environment, there must be a focus on what could be improved in light of the looming spectre of rising food prices, delayed and insufficient policy action in the Eurozone and United States and weakened growth prospects in emerging market countries.
“How can we get policies right to deal with these challenges? First and foremost, we want to listen to your views, and also share with you what has worked in other parts of the world and could work in the Caribbean,” Zhu told the audience of over 70 participants, including regional leaders Prime Minister Dr Ralph Gonsalves, of St Vincent and the Grenadines, Prime Minister Dr Denzil Douglas, of St Kitts-Nevis, and Anguilla’s Chief Minister Hubert Hughes.
Min Zhu advised firstly that in order to boost growth and competitiveness in the region, countries needed to get to the root of why growth has been elusive, especially in tourism-intensive countries such as Barbados, Jamaica and The Bahamas.
“It will be important to ensure that growth is inclusive and does not only benefit a privileged few. Further, building on the social cohesion that prevails in the Caribbean, we need to pay attention to those that may be left behind and improve the social safety net systems. This applies especially to the high level of unemployed youth in the region,” he stated, adding that “ambitious reforms” would be needed.
He also noted that beside coping with the global crisis, the Caribbean was emerging from its own financial sector crisis, and emphasis must therefore remain on “bolstering supervision and regulation of banks and insurance companies to prevent another major crisis, as well as to avoid contagion”.
In terms of lowering debt and ensuring fiscal sustainability, Min Zhu said the high indebtedness of several Caribbean countries, despite their middle to high income status, had constrained policy options; and all parties would therefore have to discuss ways to build sustainable fiscal frameworks – including via structural reforms and fiscal consolidation – to lower debt and improve creditworthiness.
Adding that “the Fund is open for business,” he said he hoped this forum would allow more avenues to be explored for the IMF to help, alongside its longstanding support through the Caribbean Regional Technical Assistance Centre, which is one of eight such IMF agencies in the Caribbean, Pacific, Africa, Middle East and Central America.