Searchlight Logo
special_image

    • News
      • Front Page
      • News
      • Breaking News
      • Press Release
      • Features
      • Special Features
      • From the Courts
      • Sports
      • Regional / World
    • Opinions
      • Editorial
      • Our Readers’ Opinions
      • Bassy – Love Vine
      • Dr. Fraser- Point of View
      • R. Rose – Eye of the Needle
      • On Target
      • Dr Jozelle Miller
      • The World Around Us
      • Random Thoughts
    • Advice
      • Kitchen Corner
      • What’s on Fleek this week
      • Health Wise
      • Physician’s Weekly
      • Business Buzz
      • Hey Rosie!
      • Prime the pump
    • ePaper
    • Obituaries
      • In Memoriam / Acknowledgement
      • Tribute
    • Contact Us
      • Advertise With Us
      • Letters To The Editor
      • General Contact Information
      • Contact our Webmaster
    • About Us
      • Privacy Policy
      • Interactive Media Ltd
      • St. Vincent & the Grenadines
    • Subscribe
    • News
      • Front Page
      • News
      • Breaking News
      • Press Release
      • Features
      • Special Features
      • From the Courts
      • Sports
      • Regional / World
    • Opinions
      • Editorial
      • Our Readers’ Opinions
      • Bassy – Love Vine
      • Dr. Fraser- Point of View
      • R. Rose – Eye of the Needle
      • On Target
      • Dr Jozelle Miller
      • The World Around Us
      • Random Thoughts
    • Advice
      • Kitchen Corner
      • What’s on Fleek this week
      • Health Wise
      • Physician’s Weekly
      • Business Buzz
      • Hey Rosie!
      • Prime the pump
    • ePaper
    • Obituaries
      • In Memoriam / Acknowledgement
      • Tribute
    • Contact Us
      • Advertise With Us
      • Letters To The Editor
      • General Contact Information
      • Contact our Webmaster
    • About Us
      • Privacy Policy
      • Interactive Media Ltd
      • St. Vincent & the Grenadines
    • Subscribe
One Region
November 12, 2013

Leaders in self-denial as Caribbean economic crisis worsens

St Lucia’s Prime Minister Dr Kenny Anthony says that there is a grave economic crisis gnawing away at Caribbean countries and “governments are busy looking inward – each busy with their own agenda rather than pursuing a Caribbean solution to the economic crisis”. Not for the first time, Dr Anthony has dared to tread where many other Caribbean leaders have shied away.{{more}}

Describing it as a “tragedy of the times”, he charged that governments are “engaged in one form or another of self-denial” while the Caribbean is “in the throes of a major crisis like it has never ever experienced before”.

Dr Anthony did not say something not previously said by regional commentators, foreign aid agencies and multilateral institutions. But now it has come from a Prime Minister who was previously legal counsel to the Secretariat of the 15-nation Caribbean Community and Common Market (CARICOM) and, earlier, a lecturer at the University of the West Indies, deeply immersed in the many challenges and limited prospects of small States. His remarks, therefore, come with a special authority and should be a reality jolt for all Caribbean leaders in government, opposition political parties, the private sector and the labour movement.

Dr Anthony’s comments are of greater significance because they were a spontaneous response to a question after a lecture he delivered on “Education in the Caribbean” at the Barbados campus of the University of the West Indies on 29 October. In this context, his observations have to be regarded as coming from that inner place in the soul that confronts reality when all other options have been exhausted.

Dr Anthony has sounded these alarm bells before. Almost a year before, on 31 October 2012, he had spoken similarly to the Barbados Chamber of Commerce when he said: “Make no mistake about it, our region is in the throes of the greatest crisis since independence. The spectre of evolving into failed societies is no longer a subject of imagination. How our societies crawl out of this vicious vortex of persistent low growth, crippling debt, huge fiscal deficits and high unemployment is the single most important question facing us at this time”.

With the exception of Trinidad and Tobago, where oil and gas revenues keep the economy buoyant, and Guyana with its broad agricultural and mineral base, the economic picture of the majority of CARICOM countries is grim. Yet, some governments try to airbrush from the portrait rising poverty, rising unemployment, rising debt and declining economic growth. The few encouraging words in country reports of the International Monetary Fund (IMF) and World Bank are inflated in government statements to try to conceal the more damaging assessments of the condition of many economies. The objective seems to be to try to persuade their populations that all is well, when all is far from well and to convince people against the reality of their own day-to-day experience.

In almost every country, except Trinidad and Tobago (37.30 per cent) debt to GDP ratios are high and expenditure on education and health has declined, either in real terms or as a proportion of governments’ total budget.

Generally, government debt as a percent of GDP is used by investors to measure a country’s ability to make future payments on its debt. When debt is high in relation to GDP, the country’s borrowing costs and yields from government bonds are adversely affected.

Worryingly, a UNDP report says: “There is a recent trend amongst several Caribbean nations of domestic debt increasing as a percentage of their total debt burden. Large amounts of sovereign debt are typically held by domestic banks and a sovereign’s default can often be followed by a domestic banking crisis. This means that shifts in the composition of the debt (from foreign) towards domestic debt can increase rather than decrease debt vulnerabilities for

governments”.

Many governments in CARICOM have high domestic debt, owed mostly to local commercial banks, and in some cases, to statutory corporations. The failure of any of these governments to service their domestic debt or to require restructuring would cause havoc for local savings and also for state-run pensions and health schemes.

While this problem exists in the larger countries of CARICOM, including The Bahamas, Barbados and Jamaica, it bedevils the subregional group of seven territories that comprise the Organisation of Eastern Caribbean States (OECS). These territories and the British dependency, Anguilla, form the Eastern Caribbean Currency Union (ECCU), which has a single currency and a common Monetary Authority that also regulates the Union’s domestic banks.

Dr Anthony shortly assumes the chairmanship of the ECCB, when governments are pursuing insular policies that, in many instances, conflict with stated goals for the fiscal stability of the area. A snapshot of recent reports compiled by the IMF, World Bank and the United Nations Development Programme shows these December 2012 debt-to-GDP ratios in OECS members: Grenada 104 per cent; St Kitts-Nevis 92 per cent; Antigua and Barbuda 89 per cent; Dominica 72 per cent; St Vincent and the Grenadines 70 per cent.

Dr Anthony’s own St Lucia is the largest economy in the ECCU, but the IMF says that “external and domestic uncertainties led to a broad-based decline in activity in 2012” and public debt increased to 78 per cent of GDP.

Given that the members of the OECS already have a single currency and many shared institutions such as the ECCB, the deeper integration of their economies and the establishment of binding decision-making machinery would improve their economic circumstances. Each government could reduce expenditure through the expansion and deepening of functional co-operation in a range of areas. They could also widen and deepen areas for production integration in the development of their natural resources through cross-border investment and by joint backing of loans raised on the international market for economically sustainable projects in food production and geothermal energy.

But this would call for a greater element of political integration than OECS governments have been willing to undertake.

The picture is no more encouraging on the wider CARICOM front. On the debt-to-GDP ratio, at the low end is The Bahamas at an all-time high of 49.9 per cent, Guyana 60 per cent (but with the second lowest per capita income after Haiti), Belize 78 per cent, Barbados 116 per cent, and Jamaica highest at 147 per cent.

In April 2011, at the very meeting when CARICOM leaders decided to put the development of a Single Economy on “pause”, they had before them a paper, Re-Energising Caricom Integration, produced by a group of CARICOM experts that identified areas of joint investment that could considerably reduce costs to governments and spin off new economic activity. Three key areas were: agriculture and food sovereignty; renewable energy; and maritime transport. That paper is well worth revisiting as one way of addressing the crisis that Dr Anthony has highlighted.

He is to be congratulated for his courage in speaking up for a second time. A third occasion would be less convincing. Now, action is required by all.

(The writer is a Consultant, Senior Research Fellow at London University and former Caribbean diplomat)

Responses and previous commentaries at: www.sirronaldsanders.com

  • FacebookComments
  • ALSO IN THE NEWS
    Villa woman in  hospital after being stabbed over 20 times
    Front Page
    Villa woman in hospital after being stabbed over 20 times
    Webmaster 
    September 9, 2025
    Police are said to be carrying out investigations into the stabbing of Rafia Sardine, a 20-year-old female of Villa. Reports are that Sardine, a FLOW ...
    RSVGPF most hacked of gov’t agencies
    Front Page
    RSVGPF most hacked of gov’t agencies
    Webmaster 
    September 9, 2025
    In St Vincent and the Grenadines (SVG), an analysis has found that the most hacked government entity was the Royal St Vincent and the Grenadines Polic...
    Event staged locally to mark Africa/ Caricom Day
    Front Page
    Event staged locally to mark Africa/ Caricom Day
    Webmaster 
    September 9, 2025
    Leaders of Governments and institutions from countries of the Caribbean Community (CARICOM), and the continent of Africa, gathered at the weekend for ...
    PM, proud of his constituents
    Front Page
    PM, proud of his constituents
    Webmaster 
    September 9, 2025
    Prime Minister, Dr Ralph Gonsalves, is proud of the persons in his constituency who continue to aim for higher education. Dr Gonsalves is the parliame...
    Van conductor to be sentenced for beating pregnant ex-girlfriend
    Front Page
    Van conductor to be sentenced for beating pregnant ex-girlfriend
    Webmaster 
    September 9, 2025
    A van conductor, who beat his five- months pregnant ex-girlfriend after she refused to get back with him, has been remanded pending sentencing. Onez J...
    King selected again for the ULP in West St George
    News
    King selected again for the ULP in West St George
    Webmaster 
    September 9, 2025
    To the haunting timeless reggae melody of Jimmy Cliff’s classic ‘Journey’, Curtis King, who was selected as the candidate for the Unity Labour Party (...
    News
    King selected again for the ULP in West St George
    News
    King selected again for the ULP in West St George
    Webmaster 
    September 9, 2025
    To the haunting timeless reggae melody of Jimmy Cliff’s classic ‘Journey’, Curtis King, who was selected as the candidate for the Unity Labour Party (...
    Steel wielding Lowman’s Hill man to be sentenced tomorrow
    From the Courts, News
    Steel wielding Lowman’s Hill man to be sentenced tomorrow
    Webmaster 
    September 9, 2025
    A Lowman’s Hill man who struck another villager in his head with a piece of steel will know his fate tomorrow, September 10, 2025. Kevin Roberts, 25, ...
    Minister of Information Technology  emphasises the importance of Cybersecurity
    News
    Minister of Information Technology emphasises the importance of Cybersecurity
    Webmaster 
    September 5, 2025
    Robust cybersecurity must be at the heart of the digital transformation that is currently taking place in St Vincent and the Grenadines (SVG) says Min...
    Entities team up to boost disaster communication capacity
    News
    Entities team up to boost disaster communication capacity
    Webmaster 
    September 5, 2025
    The Climate Change Resilience Network (CCRN) in collaboration with the Youlou Radio Movement (YRM) recently embarked on a disaster preparedness initia...
    Ministry of Health to get more dialysis machines
    News
    Ministry of Health to get more dialysis machines
    Webmaster 
    September 5, 2025
    The Ministry of Health, Wellness and the Environment, is to obtain three more Heamodialysis machines as part of the revolution in the healthcare secto...

    E-EDITION
    ePaper
    google_play
    app_store
    Subscribe Now
    • Interactive Media Ltd. • P.O. Box 152 • Kingstown • St. Vincent and the Grenadines • Phone: 784-456-1558 © Copyright Interactive Media Ltd.. All rights reserved.
    We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.Ok