BASSETERRE, St. Kitts – REGIONALLY renowned financial researcher, analyst and Director of Caribbean Centre for Money and Finance Dr. DeLisle Worrell commended the governments of the Eastern Caribbean Currency Union (ECCU) and the wider Caribbean in their “swift and appropriate” response to the global financial crisis.
Dr. Worrell also noted that the developments are beyond the region’s control.
“Central Banks and governments in the Caribbean, and specifically those of Trinidad and Tobago, Barbados and the OECS, have reacted swiftly and appropriately to the financial crisis which has its roots with CL Financial. It is clear, from the speed with which the authorities acted, and the nature of the measures taken, that they are aware of what needs to be done to maintain confidence in the financial system, and are determined to do what is necessary.
Dr. Worrell hastened to caution against unrealistic expectations as the region would not be unscathed by the global crisis and uncertainty.
“It is not that Caribbean institutions are especially fragile. Rather, the Caribbean is being affected by the spread of the global financial crisis. We should be comforted by the fact that governments and Central Banks have shown, in their responses to the CLICO problem that they are alert to their responsibility to respond appropriately to the impact on the Caribbean of global economic and financial shocks.”
He informed that the financial systems of the Caribbean are no more or less at risk than are those of the US, Europe or the rest of the world and made it clear that “it is not a failure of Caribbean markets that we are witnessing, but a failure of markets the world over”. Worrell explained that since the triumph of Reaganomics in the 1980’s, the dominant view has been that free markets are efficient. He however stated that today that notion stands “exposed as an illusion, and we are faced with a global crisis as a result”.
Already, many ECCU Member States have seen widespread lay-offs and significant reduction in economic growth due to the impact the crisis has had on the most prominent income earner for the region – tourism.
Although regional economists expect the ECCU to be adversely affected by a deepened recession, the Organization of Eastern Caribbean States (OECS) Authority in conjunction with the Eastern Caribbean Central Bank (ECCB) Monetary Council has been working to maintain the stability and credibility of the region’s currency, while at the same time attempting to stimulate economic activity.
Both bodies have identified the tourism, construction and fisheries sectors as the areas of greatest concern, while many efforts have been made to establish more entrepreneurial and capital market development initiatives.
