Deputy Governor of the Central Bank of Trinidad and Tobago, Dr Alvin Hilaire, has described the prevailing macroeconomic situation in the region as “delicate”.
However, despite the individual economic problems of each Caribbean island, countries had demonstrated “a clear understanding of the interdependent nature of the [Caribbean] Community and the need to draw even closer to support regional partners,” he said.
Dr Hilaire gave this assessment today as he addressed the fifth meeting of contributors and development partners of the CARICOM Development Fund (CDF). He was speaking in his capacity as chairman of the board of directors of the CDF.
“The macroeconomic situation in the Caribbean remains delicate. We have existing fiscal and balance of payments difficulties, which limit the space for maneuvering in many countries. Commodity prices have been very weak and the uncertain prospects of tourism also create problems for certain countries,” he observed.
“For most Caribbean countries, which are energy importers, the dramatic decline in oil prices has reduced their import bill. However, countries like Trinidad and Tobago which is an oil exporter and has been a major contributor to the CDF, this presents a very challenging situation,” he said.
Dr Hilaire later told Barbados TODAY that countries in the region first needed to recognize what their specific challenges were and do what was necessary to correct them.
Pointing to the recent International Monetary Fund (IMF) High Level Caribbean Forum in St Kitts & Nevis, Hilaire said out that he was confident solutions were being developed in each country “not only to get adjustment going, but also to develop growth”.
“… It is no point that an economy is just contracting. It may be doing well in terms of balancing its books but if people are not getting jobs, employment is weak, there is no growth, then that wouldn’t be durable. So I think this is the challenge now and certainly CDF is trying to assist in that area,” said Hilaire.
Trying to stay clear of commenting specifically on the Barbados situation, Hilaire said he was aware of “some issues to be worked out” but he was not aware of the details. He also said he was conscious that governments have historically recognized the issues and have worked to develop a high quality tourism product that attracted high net worth individuals.
“High-end tourism, that is the focus over time to have an efficient product, and to develop other sectors [including] the financial services. I think this is the right approach. To the extent that you have to keep your fiscal situation in order, that is also necessary. But Barbados has always been very serious about its economy and I think they will continue to develop policies to improve the situation,” said Hilaire, adding that tourism dependent economies were being affected due to “the global uncertainty, particularly tourists that are coming from Europe”.
He also singled out Trinidad and Tobago which he said was being adversely affected by lower oil prices, as well as Suriname and Guyana, which have witnessed a slowdown in some of their commodity exports.
“So I think overall there are economic challenges around. It is not a situation that is insurmountable. There is a lot of experience, a lot of will [and] a lot of coming together by the international community to work solutions out,” said Hilaire, adding that Jamaica was being successful with its IMF programmes.