{
  "title": "The Caribbean and the IMF: Building on a Strong Partnership",
  "publication": "IMF Blog, June 14, 2022",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2022/06/14/the-caribbean-and-the-imf-building-on-a-strong-partnership",
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  "summary": "Together we can define the right economic policies that can tame inflation, protect the most vulnerable, address debt, and fight climate change—so as to reinforce the economic recovery, and build resilience to future shocks.",
  "sections": [
    {
      "heading": "Regional economic context and recent performance",
      "content": "- Caribbean economies were especially hard hit by the pandemic and lockdowns, contracting three times as much as the rest of the world in 2020.\n- While tourism remains below pre-COVID levels for most countries, it is on the rebound and gaining momentum.\n- Growth projection: the region is expected to grow by about 3.7 percent this year.\n- Major near-term pressures:\n  - Higher global food and fuel prices, exacerbated by the war in Ukraine, are putting upward pressure on inflation.\n  - Tightening global financial conditions will increase the costs of servicing current debt and of acquiring new financing.\n  - Elevated government debt for most countries in the region, in part due to pandemic-response spending.\n  - Significant threat from climate change: more frequent and intense natural disasters, and the relentless rise in sea levels."
    },
    {
      "heading": "Policy recommendations and country examples",
      "content": "- Social protection and targeted support:\n  - Governments should target support to families in need by strengthening the adequacy and efficiency of social assistance.\n  - Example: Grenada scaled up cash transfers through their main social assistance program to ensure households were adequately compensated for increased living costs.\n  - Cash-transfer programs are presented as better support than measures like price controls on imported products, while conserving limited fiscal resources.\n- Health measures to support recovery:\n  - Upgrading COVID-19 testing and reducing vaccine hesitancy will strengthen health systems and give tourists the confidence to return.\n- Monetary policy and financial stability:\n  - Central banks with independent monetary policy should act decisively to address inflation and communicate clearly.\n  - Added vigilance is needed to preserve financial stability as debt suspension programs from earlier in the pandemic expire.\n- Disaster resilience and climate adaptation:\n  - Disaster resilience strategies that incorporate climate risks and adaptation plans into budgets and infrastructure investments are essential.\n  - Examples: Dominica and Grenada developed disaster resilience strategies to integrate climate risks into planning.\n- Novel debt and financing instruments:\n  - Contract clauses that allow for delayed debt repayment when disaster strikes (such as those introduced by Barbados and Grenada during public debt restructurings) are promising for financial resilience.\n  - Debt-for-nature swap example: Belize agreed to specific marine protections in exchange for a reduction in its international debt to private bondholders."
    },
    {
      "heading": "IMF engagement, instruments, and partnership",
      "content": "- Technical assistance and capacity building:\n  - The Caribbean Technical Assistance Center in Bridgetown celebrates 20 years of delivering technical assistance and training to help governments across the region.\n- Financial support and program examples:\n  - Barbados: an IMF-supported program since 2018 helped stabilize the government and deploy macroeconomic policies to counter the pandemic and support vulnerable people.\n  - Jamaica and Grenada: restored stability and reduced debt through IMF-supported programs before the pandemic, positioning them better to respond to COVID-19.\n  - Suriname: a recent IMF-supported program to restore macroeconomic stability is described as off to a strong start.\n- New financing to address structural challenges:\n  - The IMF’s new Resilience and Sustainability Trust (RST) provides affordable, longer-term financing designed to help countries address structural challenges—like climate change and pandemics—and build resilience to external shocks and ensure sustainable growth.\n  - All Caribbean IMF member countries are eligible for the RST, including countries in the region that have previously not had access to concessional IMF financing.\n  - The RST is intended to catalyze financing from international financial institutions and the private sector.\n  - The RST development is noted as owing in part to Prime Minister Mottley’s advocacy."
    },
    {
      "heading": "Strategic priorities for building resilience",
      "content": "- Define and implement the right economic policies to:\n  - Tame inflation.\n  - Protect the most vulnerable.\n  - Address debt.\n  - Fight climate change.\n  - Reinforce the economic recovery and build resilience to future shocks.\n- Mobilize climate financing and safeguard debt sustainability affected by climate-related and natural disasters through a more comprehensive financial framework, including novel financing solutions.\n\nOp-Ed published in The Nation, Jamaica Observer, and Caribbean Media Corporation (CMC).\n\n---\n\n\n References\n\n- adaptation\n\nSource: https://www.imf.org/en/blogs/articles/2022/06/14/the-caribbean-and-the-imf-building-on-a-strong-partnership"
    }
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    "Authors: the pandemic, lockdowns, contracting three times as much as the rest of the world in 2020.",
    "Published: June 14, 2022",
    "Caribbean economies were especially hard hit by the pandemic and lockdowns, contracting three times as much as the rest of the world in 2020.",
    "While tourism remains below pre-COVID levels for most countries, it is on the rebound and gaining momentum.",
    "Growth projection: the region is expected to grow by about 3.7 percent this year.",
    "Major near-term pressures:",
    "Social protection and targeted support:",
    "Health measures to support recovery:",
    "Monetary policy and financial stability:",
    "Disaster resilience and climate adaptation:",
    "Novel debt and financing instruments:",
    "Technical assistance and capacity building:",
    "Financial support and program examples:",
    "New financing to address structural challenges:",
    "Define and implement the right economic policies to:",
    "Mobilize climate financing and safeguard debt sustainability affected by climate-related and natural disasters through a more comprehensive financial framework, including novel financing solutions.",
    "[adaptation](https://www.imf.org/en/Publications/staff-climate-notes/Issues/2022/03/16/Planning-and-Mainstreaming-Adaptation-to-Climate-Change-in-Fiscal-Policy-512776)"
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