Nov 1, 2011
Barbados, IDB discuss fiscal sustainability, public debt and growth in the Caribbean
Government representatives, economists and policymakers tackle fiscal deficits and countercyclical measures
CHRIST CHURCH, Barbados – Government officials, policymakers, economists and members of academia analyzed ways to look at debt sustainability in the context of a complicated international economic outlook, by tackling fiscal problems and implementing at the same time sustainable countercyclical measures.
Diverse presentations discussed with top economic officials and experts a debt sustainability analysis tool kit and template; fiscal adjustment and external shocks from tourism; fiscal rules, purposes, advantages and limitations; and an overview of Inter-American Development Bank—supported fiscal programs in the Caribbean. Economists focused on Barbados specific priorities and identified opportunities on debt management and structured fiscal balances, exploring best ways for the IDB to alleviate the pressures suffered by the Caribbean countries.
IDB economists participating included Valerie Mercer-Blackman, Acting Regional Economic Advisor; Desmond Thomas, Lead Economics Specialist; and Fiscal Lead Specialists Gustavo García and Gerardo Reyes-Tagle. Renowned academics Andrea Presbitero and Ricardo Villasmil also presented. On the government side, Martin Cox, Permanent Secretary of Finance in the Ministry of Finance and Economic Affairs of Barbados, opened the session, and Margaret Sivers, Permanent Secretary Special Assignment in the Ministry of Finance, discussed debt management challenges in the country.
“Fiscal rules based on structural fiscal balances seek to combine the traditional longer-term sustainability objective with avoiding pro-cyclicality in budgetary policies by basing the rule on balances adjusted by external influences,” said Villasmil.
“Policies aimed at reducing the debt burden of the Caribbean countries are a priority and have taken center stage,” said Valerie Mercer. “But flexible policies need to also allow for a medium-term plan to reverse volatility and high public debt.”
IDB and the Caribbean
IDB Caribbean member countries include Bahamas, Barbados, Belize, Guyana, Haiti, Jamaica, Suriname and Trinidad and Tobago. The Bank also partners with the Caribbean Community (CARICOM) to support regional integration and provides financing for the Organization of Eastern Caribbean States (OECS) in partnership with the Caribbean Development Bank.
IDB lending to borrowing member countries in the English-speaking Caribbean and Suriname reached in 2010 more than US$900 million. With an exposure of US$3.5 billion and a pipeline of an additional US$1.3 billion, the IDB is deeply invested in the future of its Caribbean member countries.
The IDB capital increase approved by its members set a target of 35% of lending to the smaller, most vulnerable and the poorest countries by the year 2015.
- Christina MacCulloch