BASSETERRE, St. Kitts – REGIONAL leaders concluded roundtable consultations with the International Monetary Fund (IMF) late last week, ending a day-long discussion on fiscal and debt sustainability in the region.
Prime ministers, chief ministers and ministers of finance, along with IMF representatives convened to discuss issues under the theme Growth, Adjustment and Integration in the ECCU/OECS.
The meeting, chaired by St. Vincent and the Grenadine’s Prime Minister Hon. Dr. Ralph Gonsalves, was centred on the policy initiatives in the Eight Point Stabilization and Growth Programmes signed onto by the regional heads. Gonsalves urged all country representatives to find practical ways to address the economic challenges in their respective countries.
“It was noted that debt management was a critical component of the Eight Point Stabilization and Growth Programme. Participating ministers acknowledged that reducing the debt burden through fiscal adjustment was critical to supporting the currency union. Accordingly, member countries agreed to implement measures to ensure that debt is placed on a sustainable path,” Gonzalves told a gathering of media representatives.
The ministers decided to approach the Canadian International Development Agency funded Debt Management Advisory Service Unit for support in the form of technical assistance, training and advice, thus improving the debt management capacity of each country.
The meeting also considered options for improving fiscal policy coordination, including the adoption of annual fiscal targets consistent with debt sustainability analysis.
Similar plans to what St. Kitts-Nevis Prime Minister Hon. Dr. Denzil Douglas recently announced for the Federation have been announced as guiding points for the way forward for the region. These include reviewing the role and size of government, improving the prioritization of capital expenditure, implementing pension reforms, rationalizing social assistance and improving the oversight of statutory bodies.
Chairman Gonzalves said, “Enhancing the resilience of the financial system was deemed paramount to the stability of the Currency Union.... The participants recognized the urgent need to complete the legal and regulatory infrastructure for the financial sector, and in particular, the non-bank sector by the establishment of the Single Regulatory Units in all the member territories and the enactment of the outstanding legislation governing the sector.”
The ministerial consultations with the IMF were preceded by technical discussions on fiscal and financial sector issues with financial secretaries and senior staff of the IMF and the ECCB last Thursday (Jun. 24).
IMF Deputy Managing Director Murilo Portugal said the discussions were “very successful” and “productive”, reaffirming the IMF’s commitment to assist the small and vulnerable islands of the region.
Portugal said it is necessary for countries to set objectives regarding debt reduction, adding that the IMF will monitor their progress as they reduce their debt to acceptable levels.
“I leave very encouraged by the discussions that we’ve had and the frank and constructive exchange of views that we’ve had.
“There is a substantial degree of variance in debt levels here in the region, some at more difficult levels than others, so it is normal that some countries are more on track to achieve the objectives, while others are still in the process of taking measures to grow and achieve that same objective,” he stated.
The talks came one week after the historic signing of the revised Treaty of Basseterre establishing the OECS Economic Union. The IMF and the OECS Authority are looking forward to similar meetings, as each member state continues to return their economies to stable paths of growth.
