## _cvsg - 1. Caribbean Area — Economic conditions 2. Fiscal policy — Caribbean Area.

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### Foreword — historical background and vulnerabilities
- Economic transformation:
  - Traditional crops (sugar, bananas) replaced by tourism and related services as the dominant sector.
  - Agriculture now accounts for just 6!/2  percent of GDP in the ECCU region (with notable exceptions such as sugar-exporting Guyana where agriculture comprises about 30 percent of GDP).
  - Banana production in the Windward Islands is now about one-third of the 1990 level.
  - St. Kitts and Nevis announced closure of its sugar industry in 2005; the sugar industry had previously employed around 10 percent of the labor force there.
- Recent shocks and exposure:
  - Erosion of trade preferences; decline in official foreign assistance; frequent and severe natural disasters; global shocks affecting tourism (example: the September 11, 2001 attacks); volatility and increases in petroleum-related product prices with complete dependence on petroleum imports.
  - EM-DAT based data: the Caribbean had 190 recorded disasters in 1970–2004; the ECCU had 48 events and is highly exposed relative to land area and population.
  - For the ECCU countries as a whole, the reduction in aid flows is of the order of 5 percent of GDP a year, creating a substantial shortfall in government budgets.
- Social indicators:
  - Life expectancy in the ECCU countries averages 74 years.
  - Literacy rates in the ECCU countries average 92 percent.
- Selected ECCU indicators:
  - Population (thousands), 2003 (estimate): ECCU = 567.
  - Poverty headcount index, 2000 (percent): Antigua & Barbuda = 12; Dominica = 33; Grenada = 32; St. Kitts & Nevis = 31; St. Lucia = 25; St. Vincent & the Grenadines = 38; ECCU = 29.
  - Human Development Index rank (2004) among 177 countries: Antigua & Barbuda = 55; Dominica = 95; Grenada = 93; St. Kitts & Nevis = 39; St. Lucia = 71; St. Vincent & the Grenadines = 87.
  - Life expectancy (years), 2003: Antigua & Barbuda = 75; Dominica = 77; Grenada = 73; St. Kitts & Nevis = 72; St. Lucia = 74; St. Vincent & the Grenadines = 73; ECCU = 74.
  - Adult illiteracy rate (percent), 2001: Antigua & Barbuda = 13; Dominica = 4; Grenada = 6; St. Kitts & Nevis = 2; St. Lucia = 10; St. Vincent & the Grenadines = 11; ECCU = 8.
  - Infant mortality rate (per 1,000 live births), 2003: Antigua & Barbuda = 11; Dominica = 12; Grenada = 18; St. Kitts & Nevis = 19; St. Lucia = 16; St. Vincent & the Grenadines = 23; ECCU = 17.
  - GDP at market prices, 2004 (millions of U.S. dollars): Antigua & Barbuda = 815; Dominica = 282; Grenada = 437; St. Kitts & Nevis = 404; St. Lucia = 762; St. Vincent & the Grenadines = 404; ECCU = 3,105.
  - GDP per capita (U.S. dollars), 2004 (estimate): Antigua & Barbuda = 10,375; Dominica = 3,962; Grenada = 4,205; St. Kitts & Nevis = 8,647; St. Lucia = 4,748; St. Vincent & the Grenadines = 3,801; ECCU = 5,473.
  - Share in nominal GDP, 2004 (percent): Antigua & Barbuda = 26.3; Dominica = 9.1; Grenada = 14.1; St. Kitts & Nevis = 13.0; St. Lucia = 24.6; St. Vincent & the Grenadines = 13.0; ECCU = 100.

### I. Fiscal Policy Challenges — diagnosis and recommendations
- Fiscal deterioration and debt:
  - Rapid build-up of public debt since the 1990s driven by a rise in expenditures rather than declining revenues.
  - Since the mid-1990s public debt has grown rapidly to reach over 90 percent of GDP.
  - Example of expenditure-driven pressures: central government employment in Antigua and Barbuda was 40 percent of the labor force at end-2004, up from 30 percent a decade earlier.
- Drivers of expenditure increases:
  - Domestic policy slippages (deterioration in primary fiscal balances) and exogenous shocks (natural disasters, erosion of trade preferences).
  - Tax exemptions and concessions to attract investment eroded the tax base and widened fiscal deficits.
- Policy package for debt reduction:
  - Fiscal consolidation.
  - Active debt management.
  - Asset sales.
  - Lowering domestic (financial sector) vulnerabilities to exogenous shocks.
  - Implementation of growth-enhancing reforms.
- Currency union fiscal dynamics:
  - Evidence of greater fiscal free-riding in ECCU countries relative to countries with other exchange rate regimes, implying need for mechanisms to ensure member fiscal policies are consistent with maintaining a regional fixed exchange rate arrangement.
- IMF engagement and policy directions:
  - IMF stepped up regional analysis and surveillance of the ECCU; intensified surveillance in Jamaica; more comprehensive Article IV consultations; deeper technical assistance; new IMF-supported programs in several countries (including Guyana, Grenada, and Dominica); greater public outreach.
  - Advised multifaceted strategy: integrate island economies with the global economy; facilitate transformation to tourism and services; promote greater regional cooperation in provision of collective government services; implement fiscal policies that preserve macroeconomic stability.
- Responses to shocks:
  - Differentiate policy response by shock type:
    - Temporary shocks (e.g., September 11 attacks): smooth national consumption by borrowing in bad times and saving in good times.
    - Permanent shocks: adjust steadily and decisively, especially when anticipated.
  - Increase savings during good times and ensure access to well-functioning insurance mechanisms (market and official) for natural disasters and other shocks.
  - Restore and maintain fiscal prudence to avoid unsustainable debt accumulation.

### II. Macroeconomic cycles and volatility — features and implications
- Growth trends:
  - ECCU average real GDP growth: Average 1980–89 = 5.7 percent; Average 1990–2004 = 2.7 percent.
  - First two decades after independence experienced strong growth; since then growth has slowed dramatically.
- Cycle characteristics:
  - Periods of expansion typically last much longer than contraction; however, expansions and contractions in trend-adjusted output are much more symmetrical and have no fixed duration.
  - Comovement of output is common in the eastern Caribbean.
  - Strong association between movements in real GDP of ECCU countries and between developed-country output and output of individual ECCU countries.
- Volatility and smoothing:
  - Volatility of output in the ECCU is markedly lower than that of countries at similar development levels.
  - Relative income stability attributed to above-average ability to borrow externally and smooth national income; this ability may be weakening given rapid accumulation of high public indebtedness.

### III. Financial sector issues — conditions and policy measures
- Banking system characteristics:
  - Well capitalized; reasonably profitable; liquid; high levels of nonperforming loans; low provisioning for loan losses; large exposure to the household (mortgage) sector.
- Vulnerabilities:
  - Growing vulnerabilities as public debt accumulated since the 1990s; banking system exposure to the public sector has increased.
  - State-owned local banks perform clearly inferior to foreign bank branches.
- Recommended measures:
  - Institutional-framework reforms to ensure continued financial stability.
  - Reduce banking-sector exposure to sovereign and household risks; strengthen provisioning and nonperforming loan management.

### IV. Economic implications of natural disasters — impact and mitigation
- Frequency and impact:
  - Rising incidence of natural disasters in the eastern Caribbean during 1970–2000s; a natural disaster occurred once every 4!/2 years in each of the six ECCU countries that are members of the IMF.
  - Major disasters cause contemporaneous contraction of output and deterioration of fiscal and external balances, partially ameliorated by uptick in transfers from abroad and accompanied by a rise in public indebtedness over the medium term.
- Mitigation and financing strategies:
  - Recourse to insurance and capital markets.
  - Delineation of the role of international assistance in promoting disaster mitigation.
  - Public policy responses: risk identification and risk reduction; self-insurance; utilization of risk transfer mechanisms.
  - Note: traditional insurance markets and capital-market-based risk-transfer instruments display weaknesses in the Caribbean.
  - Moral hazard from postdisaster external assistance can dampen predisaster mitigation incentives; arrange a mix of financing options for postdisaster expenditure arrayed as a graduated response to increasing disaster risk.

### V. Managing external flows — migration, remittances, and tax incentives
- Migration and remittances:
  - Caribbean countries have lost 10 to 40 percent of their labor force due to emigration since 1970, with strikingly larger emigration rates among the highly educated.
  - The Caribbean is the world’s largest recipient of remittances (worker remittances, compensation of employees, and migrant transfers); in 2002 remittances constituted about 13 percent of the region’s GDP.
  - Welfare calculations indicate official remittance flows are outweighed by economic losses associated with high-skilled emigration, indicating evidence of “brain drain.”
- Tax concessions and FDI:
  - Major forms of tax concessions: corporate income tax holidays and exemptions from import duties and taxes.
  - Reliance on tax concessions in ECCU countries increased significantly over the past decade, resulting in forgone revenues ranging between 9!/2 and 16 percent of GDP annually, with only a modest effect in attracting additional investment.
  - Suggested measure: adopt a regional approach to harmonizing concessions to reduce revenue losses and prevent excessive tax competition.

### VI. Trade integration and tourism developments — trends and policy focus
- Tourism as dominant sector:
  - Tourism now the dominant driver of economic activity and strongly influences public finances and the balance of payments.
  - Sharp contraction in world and Caribbean tourism followed the September 11, 2001 terrorist attacks; the Caribbean has had a gradual recovery of its tourism market share.
- Competitiveness and policy responses:
  - Evidence of erosion of price and nonprice competitiveness in Caribbean tourism.
  - Recommended measures: enhance efficiency and cost-competitiveness of Caribbean tourism enterprises.
  - Greater regional and multilateral integration of trade, labor and capital markets can positively affect growth, but growth is strongly dependent on economic growth in industrial countries.

### Overarching assessment and policy priorities
- Openness and external shocks:
  - Island economies are highly open and strongly influenced by external shocks.
  - Major shocks—steady erosion of trade preferences and decline in aid flows—are more permanent and largely anticipated, requiring strategic planning.
- Policy priorities:
  - Debt reduction supported by fiscal consolidation and debt management.
  - Strengthening financial-sector resilience.
  - Implementing disaster-risk financing strategies.
  - Reducing dependence on inefficient tax concessions via regional harmonization.
  - Enhancing tourism competitiveness.
  - Pursuing deeper integration while recognizing dependence on industrial country growth.

*Source: Foreword and Part summaries, _cvsg - Foreword; _cvsg - 1. Caribbean Area — Economic conditions 2. Fiscal policy — Caribbean Area.*

### 1. Caribbean Area — Economic conditions 2. Fiscal policy — Caribbean Area.

### _cvsg - 1. Caribbean Area — Economic conditions 2. Fiscal policy — Caribbean Area.

### I. Fiscal Policy Challenges
- Overview — Ratna Sahay, David O. Robinson, and Paul Cashin. Page 1
  - I. Fiscal Policy Challenges
- Stabilization, Debt, and Fiscal Policy in the Caribbean — Ratna Sahay. Page 17
- Fiscal Policy: Is the Eastern Caribbean Currency Union a Free-Riding Paradise? — Rupa Duttagupta and Guillermo Tolosa. Page 58

### II. Macroeconomic Cycles and Volatility
- Key Features of Caribbean Business Cycles — Paul Cashin. Page 83
- Islands of Stability? Determinants of Macroeconomic Volatility in the Eastern Caribbean Currency Union — Tobias Rasmussen and Guillermo Tolosa. Page 122

### III. Financial Sector Issues
- The Eastern Caribbean Currency Union Banking System in a Time of Fiscal Challenge — Jingqing Chai. Page 143

### IV. Economic Implications of Natural Disasters
- Natural Disasters and Their Macroeconomic Implications — Tobias Rasmussen. Page 181
- Government Responses to Natural Disasters in the Caribbean — Paul Cashin and Pawel Dyczewski. Page 206

### V. Managing External Flows
- Emigration and Brain Drain from the Caribbean — Prachi Mishra. Page 225
- Tax Concessions and Foreign Direct Investment in the Eastern Caribbean Currency Union — Jingqing Chai and Rishi Goyal. Page 258

### VI. Trade Integration and Tourism Developments
- Eastern Caribbean Tourism: Developments and Outlook — Ruby Randall. Page 285
- Integration and Growth in the Eastern Caribbean — Montfort Mlachila, Wendell Samuel, and Patrick Njoroge. Page 307

*Source: _cvsg - 1. Caribbean Area — Economic conditions 2. Fiscal policy — Caribbean Area.*

### Foreword

### _cvsg - Foreword

### Historical background and structural change
- After political independence in the 1960s and 1970s, Caribbean open island economies initially prospered because of preferential access for traditional agricultural products to European markets and later from tourism.
- Economic transformation:
  - Traditional crops (sugar, bananas) were long dominant but have been replaced by tourism and related services as the dominant sector.
  - Agriculture now accounts for just 6!/2  percent of GDP in the ECCU region (with notable exceptions such as sugar-exporting Guyana where agriculture comprises about 30 percent of GDP).
  - Banana production in the Windward Islands has fallen sharply and is now about one-third of the 1990 level.
  - St. Kitts and Nevis announced closure of its sugar industry in 2005; the sugar industry had previously employed around 10 percent of the labor force there.

### Recent shocks and vulnerabilities
- Adverse external shocks over the last decade include:
  - Erosion of trade preferences.
  - Decline in official foreign assistance.
  - Frequent and severe natural disasters (the region is among the most disaster-prone in the world).
  - Global shocks affecting tourism (example: the September 11, 2001 attacks caused a sharp decline in Caribbean tourism).
  - Volatility and increases in petroleum-related product prices, with large effects due to complete dependence on imports for petroleum.
- Natural disaster exposure:
  - EM-DAT based data show the Caribbean had 190 recorded disasters in 1970–2004; the ECCU had 48 events and is highly exposed relative to land area and population (see Table 1.2 in source).
- Aid and budgetary impact:
  - Official Development Assistance (ODA) flows have remained roughly constant in U.S. dollar terms since the mid-1970s but declined in real terms and relative to GDP.
  - For the ECCU countries as a whole, the reduction in aid flows is of the order of 5 percent of GDP a year, creating a substantial shortfall in government budgets.

### Macroeconomic performance and public finances
- Growth trends:
  - The first two decades after independence experienced strong growth; since then growth has slowed dramatically.
  - Eastern Caribbean Currency Union (ECCU) average real GDP growth: Average 1980–89 = 5.7 percent; Average 1990–2004 = 2.7 percent (Figure 1.3).
- Fiscal response and debt accumulation:
  - Policymakers almost uniformly relaxed fiscal stances when shocks hit, increasing borrowing domestically and externally.
  - Since the mid-1990s public debt has grown rapidly to reach over 90 percent of GDP, placing the economies among the most heavily-indebted emerging market countries in the world.
  - Expansion of public employment is cited as an example (central government employment in Antigua and Barbuda was 40 percent of the labor force at end-2004, up from 30 percent a decade earlier).
  - Tax exemptions and concessions to attract investment have eroded the tax base and widened fiscal deficits.
- Role of remittances:
  - Substantial inflows of remittances from large-scale migration of skilled labor to industrial countries have mitigated some impacts for Caribbean people.

### Social outcomes and indicators
- The Caribbean has maintained strong social indicators and living standards that match upper-middle-income countries:
  - Life expectancy in the ECCU countries averages 74 years (compared with an average of 70 for middle-income countries).
  - Literacy rates in the ECCU countries average 92 percent.
- Selected ECCU social and demographic indicators (from Table 1.1):
  - Population (thousands), 2003 (estimate): ECCU = 567.
  - Poverty headcount index, 2000 (percent): Antigua & Barbuda = 12; Dominica = 33; Grenada = 32; St. Kitts & Nevis = 31; St. Lucia = 25; St. Vincent & the Grenadines = 38; ECCU = 29.
  - Human Development Index rank (2004) among 177 countries: Antigua & Barbuda = 55; Dominica = 95; Grenada = 93; St. Kitts & Nevis = 39; St. Lucia = 71; St. Vincent & the Grenadines = 87.
  - Life expectancy (years), 2003: Antigua & Barbuda = 75; Dominica = 77; Grenada = 73; St. Kitts & Nevis = 72; St. Lucia = 74; St. Vincent & the Grenadines = 73; ECCU = 74.
  - Adult illiteracy rate (percent), 2001: Antigua & Barbuda = 13; Dominica = 4; Grenada = 6; St. Kitts & Nevis = 2; St. Lucia = 10; St. Vincent & the Grenadines = 11; ECCU = 8.
  - Infant mortality rate (per 1,000 live births), 2003: Antigua & Barbuda = 11; Dominica = 12; Grenada = 18; St. Kitts & Nevis = 19; St. Lucia = 16; St. Vincent & the Grenadines = 23; ECCU = 17.
  - GDP at market prices, 2004 (millions of U.S. dollars): Antigua & Barbuda = 815; Dominica = 282; Grenada = 437; St. Kitts & Nevis = 404; St. Lucia = 762; St. Vincent & the Grenadines = 404; ECCU = 3,105.
  - GDP per capita (U.S. dollars), 2004 (estimate): Antigua & Barbuda = 10,375; Dominica = 3,962; Grenada = 4,205; St. Kitts & Nevis = 8,647; St. Lucia = 4,748; St. Vincent & the Grenadines = 3,801; ECCU = 5,473.
  - Share in nominal GDP, 2004 (percent): Antigua & Barbuda = 26.3; Dominica = 9.1; Grenada = 14.1; St. Kitts & Nevis = 13.0; St. Lucia = 24.6; St. Vincent & the Grenadines = 13.0; ECCU = 100.

### Policy analysis and recommendations emphasized in the Foreword
- IMF engagement and responses:
  - The IMF has stepped up engagement in the region with regional analysis and surveillance of the ECCU; intensified surveillance in Jamaica; more comprehensive Article IV consultations with individual countries; deeper technical assistance programs; new IMF-supported programs in several countries (including Guyana, Grenada, and Dominica); and greater public outreach.
  - Recent IMF-supported programs are developed by the authorities and recognize capacity constraints in policy implementation and reform.
- Policy directions advised for accelerating growth and preserving stability:
  - Implement a multifaceted strategy to integrate island economies with the global economy.
  - Facilitate transformation of economies from agriculture into tourism and related services.
  - Promote greater regional cooperation, particularly in provision of collective government services.
  - Implement fiscal policies that preserve macroeconomic stability.
- Responses to shocks and fiscal management guidance:
  - Differentiate policy responses depending on whether shocks are temporary or permanent:
    - For temporary shocks (e.g., September 11 attacks): governments should attempt to smooth national consumption by borrowing in bad times and saving in good times.
    - For permanent shocks: there is a need to adjust steadily and decisively, especially when anticipated.
  - Increase savings during good times and ensure access to well-functioning insurance mechanisms (market and official) to handle natural disasters and other shocks.
  - Restore and maintain fiscal prudence to adjust to permanent negative shocks and avoid unsustainable debt accumulation.

### Intended use of the book and contributions
- The papers in the book:
  - Arise from IMF regional and bilateral surveillance work in the Caribbean.
  - Benefit from discussions with national and regional policymakers and feedback from regional conferences, seminars, and workshops.
  - Set out economic challenges facing Caribbean island economies (with a focus on the ECCU) and present policy options to ameliorate external shocks and support sustained growth.
- Objective:
  - To form a basis for deepening policy dialogue in the region and help achieve the economic aspirations of the Caribbean people.

*Source: Foreword, _cvsg - Foreword.*

### Part  I  of  the  book,  “Fiscal  Policy  Challenges,”  examines  the  prime

### _cvsg - Part  I  of  the  book,  “Fiscal  Policy  Challenges,”  examines  the  prime

### Part I — Fiscal imbalances in the Caribbean
- Rapid build-up of public debt in Caribbean countries since the 1990s is accounted for by a deterioration in fiscal balances driven by a rise in expenditures rather than declining revenues.
- Expenditure increases emanate from domestic policy slippages (largely the deterioration in primary fiscal balances) and exogenous shocks (chiefly natural disasters and the erosion of trade preferences).
- High public debt has heightened vulnerability to economic shocks; reduction in debt stocks should be a priority macroeconomic goal.
- Successful debt reduction requires a combination of:
  - fiscal consolidation,
  - active debt management,
  - asset sales,
  - lowering domestic (financial sector) vulnerabilities to exogenous shocks,
  - implementation of growth-enhancing reforms.
- Evidence of greater fiscal free-riding in ECCU countries (currency union with fixed peg) relative to countries with other exchange rate regimes, implying need for mechanisms to ensure member fiscal policies are consistent with maintaining a regional fixed exchange rate arrangement.

### Part II — Macroeconomic cycles and volatility
- Periods of expansion in Caribbean real GDP typically last much longer than periods of contraction; however, expansions and contractions in trend-adjusted Caribbean output are much more symmetrical and have no fixed duration.
- Comovement of output is common in the eastern Caribbean.
- There is a strong association between movements in real GDP of ECCU countries and a very strong association between movements in developed-country output and output of individual ECCU countries.
- The volatility of output in the ECCU is markedly lower than that of countries at similar development levels.
- Relative income stability is attributed to the region’s above-average ability to borrow externally and smooth national income; this ability may be weakening given rapid accumulation of high public indebtedness.

### Part III — Financial sector issues
- ECCU banking system characteristics:
  - Well capitalized,
  - Reasonably profitable,
  - Liquid,
  - High levels of nonperforming loans,
  - Low provisioning for loan losses,
  - Large exposure to the household (mortgage) sector.
- Growing vulnerabilities as public debt has accumulated since the 1990s; banking system exposure to the public sector has also increased.
- State-owned local banks perform clearly inferior to foreign bank branches.
- Recommended measures include institutional-framework reforms to ensure continued financial stability.

### Part IV — Economic implications of natural disasters
- Rising incidence of natural disasters in the eastern Caribbean during three decades since 1970; a natural disaster occurred once every 4!/2 years in each of the six ECCU countries that are members of the IMF.
- Major disasters typically cause contemporaneous contraction of output and deterioration of fiscal and external balances, partially ameliorated by an uptick in transfers from abroad (including development assistance), and accompanied by a rise in public indebtedness over the medium term.
- Suggested mitigation measures include recourse to insurance and capital markets and delineation of the role of international assistance in promoting disaster mitigation.
- Public policy responses to mitigate disaster risk include:
  - risk identification and risk reduction,
  - self-insurance,
  - utilization of risk transfer mechanisms.
- Traditional insurance markets and capital-market-based risk-transfer instruments display weaknesses in the Caribbean; measuring government risk from natural hazards in developing countries is difficult.
- Moral hazard from postdisaster external assistance can dampen incentives for predisaster mitigation; policy implication is to arrange a mix of financing options for postdisaster expenditure arrayed as a graduated response to increasing disaster risk.

### Part V — Managing external flows (migration, remittances, tax incentives)
- Migration and remittances:
  - Caribbean countries have lost 10 to 40 percent of their labor force due to emigration (largely to OECD countries) since 1970, with strikingly larger emigration rates among the highly educated.
  - The Caribbean is the world’s largest recipient of remittances (defined as the sum of worker remittances, compensation of employees, and migrant transfers); in 2002 remittances constituted about 13 percent of the region’s GDP.
  - Welfare calculations indicate official remittance flows are outweighed by economic losses associated with high-skilled emigration, indicating evidence of “brain drain” in the Caribbean.
- Tax concessions and foreign direct investment:
  - Major forms of tax concessions include corporate income tax holidays and exemptions from import duties and taxes.
  - Reliance on tax concessions in ECCU countries has increased significantly over the past decade, resulting in forgone revenues ranging between 9!/2 and 16 percent of GDP annually, with only a modest effect in attracting additional investment.
  - Measures to reduce revenue losses and prevent excessive tax competition include adoption of a regional approach to harmonizing concessions.

### Part VI — Trade integration and tourism developments
- Tourism has become the dominant driver of economic activity and strongly influences public finances and the balance of payments.
- Sharp contraction in world and Caribbean tourism followed the September 11, 2001 terrorist attacks; the Caribbean has had a gradual recovery of its tourism market share.
- Evidence of erosion of price and nonprice competitiveness in Caribbean tourism.
- Recommended measures to enhance efficiency and cost-competitiveness of Caribbean tourism enterprises.
- Greater regional and multilateral integration of trade, labor and capital markets can positively affect growth, but such growth is strongly dependent on economic growth in industrial countries.

### Overarching assessment and policy implications
- A common theme is the openness of island economies and the strong influence of external shocks on performance.
- Major shocks—steady erosion of trade preferences and decline in aid flows—are more permanent and to a large extent anticipated, calling for strategic planning by policymakers to adjust to the new global economic environment.
- Policy priorities include:
  - debt reduction supported by fiscal consolidation and debt management,
  - strengthening financial-sector resilience,
  - implementing disaster-risk financing strategies,
  - reducing dependence on inefficient tax concessions via regional harmonization,
  - enhancing tourism competitiveness,
  - pursuing deeper integration while recognizing dependence on industrial country growth.

*Source: https://www.imf.org/-/media/websites/imf/imported-publications/external/pubs/nft/2006/cvsg/_cvsg.pdf*

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_Source: https://www.imf.org/-/media/websites/imf/imported-publications/external/pubs/nft/2006/cvsg/_cvsg.pdf_