EC countries to curb debt crisis

With debt financing consuming some 22 percent of this country’s current revenue, this country along with other OECS states would be looking to shave the public debt to a benchmark 60 per cent before the year 2020.

The countries reaffirmed their commitment to the achievement of the fiscal benchmark at the 56th meeting of the monetary council of the Eastern Caribbean Central Bank, held last Friday at the Ministry of Foreign Affairs conference room.{{more}}

At close of the meeting on Friday, the council revealed that member countries would adopt a Structural Adjustment Technical Assistance Programme (SATAP) in their efforts to ensure their fiscal policies are supportive of the stability objectives for the Union’s financial system and the EC currency.

The ECCU authorities have already expressed their intention to reduce the high public debt levels through a combination of fiscal consolidation, growth, asset sales, and debt management, and a number of member countries have already been working towards achieving this goal.

According to this country’s Prime Minister Dr. Ralph Gonsalves, who hold responsibility for Finance, member countries would be working closely with the Eastern Caribbean Central Bank to achieve this medium term target.

“At the moment the public sector debt is in excess of 60 per cent. The idea is that we have a quest to reduce it to 60 per cent. This would be done over the medium term before 2020, and we are going to begin the process of doing this by using our budgets on an annual basis between now and then,” the Prime Minister said.

With this country’s public debt increasing from less than 50 percent of GDP in 1997 to some 85.2 percent at the end of last year, reducing public debt is something government would have high on its priority list.

The public debt has risen in most countries within the union. IMF figures last year, given by Assistant Director of the IMF Western Hemisphere Department, Ratna Sahay, showed the debt rate of ECCU member countries averaging nearly 115 per cent of the Gross Domestic Product (GDP). According to the IMF official, the public debt per person in Antigua stood at EC$40, 000, Grenada between $15, 000 and $20,000, St. Lucia close to $10,000 and St. Vincent and the Grenadines, by far the lowest, was around $5,000.