Debt warning issued for Caribbean countries

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(CMC) – A report by the London-based Commonwealth Secretariat is warning Caribbean countries if they continue on their current development path, by 2050 they will face unmanageable debt, poor growth, and greater socio-economic problems.

The report, which was launched at the Fourth Global Biennial Conference on Small States in Seychelles, looks at the current policies and trends in six Caribbean countries, namely Bahamas, Barbados, Jamaica, St Lucia, Grenada, Trinidad and Tobago, and Guyana.

debtTitled, “Achieving a Resilient Future for Small States: Caribbean 2050,” the report makes a 34-year projection across different sectors and shows five out of the six countries would have a debt-to-gross domestic product (GDP) above 100 per cent – dangerous levels if growth continues to lag.

Projections also suggest interest expenditure on debt is likely to sap public finances, reducing funds for development and giving rise to greater socio-economic problems.

The report warns that the Caribbean faces mounting challenges and unless there are seismic shifts in policy-making, the outlook is stark.

“Sluggish growth, spiralling debt, high youth unemployment, rising crime rates, piecemeal investment, and low productivity all pose serious threats to the region’s future. Climate change also casts a long shadow; small island developing states are most vulnerable to extreme weather, rising sea levels and diminishing natural resources but lack the funds to plan ahead and minimise risks.”

The report challenges the status quo and sets out policy interventions in targeted areas aimed at tackling persistent barriers to the region’s growth.

“This publication offers strategies that seek balance for the Caribbean in the survivability of today and the sustainability of tomorrow,” said Commonwealth Deputy Secretary-General Deodat Maharaj.

“We have taken on board current and future threats facing the region, such as lack of competitiveness, human and financial resource constraints, crippling debt and limited access to development finance and put forward practical steps that set out a new trajectory to help realise the full and rich potential of the region.”

The report provides recommendations on productivity, export growth, increasing youth employment and fiscal reform.

 

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