BASSETERRE, St. Kitts – COUNTRY Economist of the Caribbean Development Bank Elmer Harris says that the implementation of a comprehensive public sector investment programme (PSIP) in the region has been slow to happen.
A PSIP is a programme of investment projects to be implemented with the aim of achieving a country’s medium-term development goals, objectives and strategies.
With the advent of the ongoing global economic and financial crisis, it became necessary for governments of the Eastern Caribbean Currency Union (ECCU) to implement a number of fiscal stimulus packages to mitigate the effects on vulnerable economies.
However, according to Harris, the sub-region’s implementation has not moved ahead as quickly as necessary to achieve the desired results.
“Generally, the implementation rate of the PSIP is low, mainly because [there is an] extensive list of projects included in the PSIP for which funding has not been sought. There are also other weaknesses relating to the PSIP, mainly regarding institutional arrangements of the PSIP… and also the project management cycle,” he noted in a recent interview at the Economic Policy Boot Camp being held at the Eastern Caribbean Central Bank in St. Kitts.
He explained that the selection for a PSIPS’s plans is “weak”, often resulting in unrealistic cost estimates being incorporated into the fiscal plans. He stressed that another cause for the slow implementation is “inappropriate levels of coordination” for staffing and training within agencies.
In explaining the significance of stimulus packages during times of economic crises, Harris stressed that PSIP’s contribute to the growth dynamics in an economy through the investment programmes and projects. It also contributes to job creation and promotes social development, particularly poverty reduction.
He added that a stimulus may contribute to environmental sustainability and disaster management, and can be an instrument of economic management that ensures “macroeconomic and sector strategies are translated into programmes and projects”.
These benefits, according to Harris, must be yielded so they can in turn promote economic growth and development.
“The PSIP is a logical process in the entire financial exercise. When one looks at the entire arrangement, the programme is important in terms of promoting growth and development, but it is [just as] important that you have the available financing for attaining your objectives,” he noted.
The CDB expert encouraged regional governments to correct the weaknesses in their implementation of PSIP’s. He called for a more effective selection process, so that projects that have significant developmental impact would be included in the PSIP.
It is anticipated that, following the Economic Policy Boot Camp, policy-makers and finance ministers would work more aggressively to select appropriate PSIP’s and be more efficient in their implementation.
