AS I SEE THINGS: The banking revolution
As concerned citizens of Caribbean countries, how many times have you heard finance ministers and other government officials complaining about the negative effects the 2008/2009 global economic and financial meltdown had on their respective economies?
How many times have you heard those same persons directly blaming the said global recession for the economic ills now plaguing our small and highly vulnerable countries?
How sympathetic are you to those officials and the challenges they are forced to confront as a result of the fallouts from external shocks of the type cited in the questions posed?
I have absolutely no idea how anyone would respond, and that is fine.
But, let us be real. In an era of rapid technological advances – information on almost anything is accessible with a simple click of a computer mouse – should our governments and business leaders ever be caught with their pants down when it comes to developments taking place internationally? Developments that have the potential to virtually cripple our local economies? I think not. How about you?
You see, effective management of our Caribbean economies calls not only for the raising of taxes or the cutting of expenditure to lower a fiscal deficit, but for the incorporation of the effects of regional and international developments on our fragile countries.
In other words, to strategically reposition our countries along lines of sustainability, our planning must reflect the realities of the changing times and all of the associated dynamics in international economic relations. If we fail to do so, the consequences can be dire.
Case in point: How are Caribbean countries preparing themselves for the pending revolution in banking based on developments in relation to digital currencies? What if our countries fail to get on board with the many and rapid changes taking place in this arena?
In reference to the looming revolution in banking, one pundit summarised: “A profound technological shift that will change how the world does business – and everything else – using Blockchain technology, which powers the digital currency Bitcoin.”
Further, a colleague sounded this warning: “The Blockchain/digital money developments have implications not only for the likely extinction of the traditional banking sector as we know it today, but also for issues like money laundering, tax evasion, tax avoidance, de-risking, offshore banking, trade settlements and capital markets’ loans for developing countries.
Add to these the IMF and World Bank inter-facing with developing countries (that is, the new forms that some conditionalities may take) as well as many other issues.
We need to study everything carefully, with an eye to seizing opportunities from which our countries can benefit by being a few steps ahead of the “competition”, instead of our usual role being so late that something else has taken over by the time we catch up to the previous innovation.
Can the message be any clearer?
Will our financial managers and planners take heed and start putting mechanisms in place to prevent our Caribbean countries from falling behind as this revolution in banking unfolds?
Will our financial leaders allow our economies to suffer from the imminent banking revolution in similar fashion to that of the 2008/2009 global economic and financial crisis? Time alone will tell.
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