Caricom urges fiscal reforms for region to rebound

With many Caricom states still reeling from the global economic and financial crisis, regional leaders have identified fiscal policy reforms and more effective communication between the financial sector and the real sector among the measures states need to focus on in their economic recovery efforts.

Caribbean states have been struggling since the crisis to achieve positive economic growth, leaders said, pointing to the sluggish nature of the global recovery from the financial and economic crisis.

They linked the fragile nature of the global economic recovery to persistent credit, home foreclosure and employment crises, saying this resulted in weak aggregate demand and related outputs.

But for the region to bounce back, leaders raised a number of measures in the Communiqué issued at the end of the Heads of Govern-ment meeting in Jamaica, citing issues such as fiscal reforms, including debt management and public expenditure control. They also pointed to financial sector policy reform, indicating that attention needs to be paid to adequate bank capitalisation, adherence to statutory fund requirements for insurance companies, efficient management of private and public sector pension funds and operationalisation of the newly created College of Regulators.

The regional heads said too that there is need for more effective articulation between the financial sector and the real sector for purposes of achieving greater efficiency, productivity and sustainable development.

The Communiqué also made mention of the Caribbean rate of recovery saying that in the short and medium term this is threatened by a number of factors including the region’s own very high level of indebtedness; a non-concessionary status with respect to access to resources of the Inter-national Financial Institutions (IFIs); an increasing rate of erosion of preferential access to the markets of its major development partners; and the place of its offshore financial services industry is in doubt as a result of the OECD-imposed standards for greater transparency and effective exchange information.

Further, heads of government encouraged the relevant national and regional authorities to continue with their economic recovery efforts, but that they pay attention to the measures outlined.

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