{
  "title": "The Caribbean and the IMF—Building a Partnership for the Future, by Christine Lagarde, Managing Director, IMF",
  "publication": "IMF News, June 27, 2014",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/sp062714",
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  "summary": "Regional legacy: \"low growth, high debt, low competitiveness, high unemployment.\"",
  "publishDate": "2014-06-27",
  "sections": [
    {
      "heading": "A changing Caribbean",
      "content": "- Regional legacy: \"low growth, high debt, low competitiveness, high unemployment.\"\n- Growth performance:\n  - \"Growth has averaged less than 2 percent a year since the mid-1990s\" in tourism-dependent countries.\n  - \"Less than 1 percent in Jamaica.\"\n  - \"The economy grew by 1.6 percent year-over-year in the first quarter of 2014\" (Jamaica).\n  - \"St. Kitts and Nevis... grew by almost 4 percent last year.\"\n- Public debt and fiscal vulnerability:\n  - \"Public debt is still at record highs—almost 100 percent of GDP in tourism-dependent countries, and 140 percent of GDP here in Jamaica.\"\n  - \"Public debt has fallen by 15 percent of GDP in Antigua, and by one third in St. Kitts and Nevis.\"\n- Social outcomes and labor markets:\n  - \"About a third of young people are out of work\" (region-wide).\n  - \"In Jamaica, the poverty rate doubled to 17½ percent.\"\n- Crisis legacy:\n  - \"Six years on, output has still not returned to pre-crisis levels.\"\n  - Natural disaster exposure and macroeconomic volatility exacerbate vulnerability.\n- Jamaica reform example:\n  - Measures included a \"wage freeze on civil servants,\" \"a debt exchange for financial investors,\" \"increases in taxes and tariffs for water and transportation,\" and allowance for the exchange rate to adjust.\n  - Social protection: \"raising cash transfers for poor households by 67 percent for the elderly and 15 percent for others last year, with another 15 percent increase planned for this October.\"\n  - Institutional innovation: Economic Program Oversight Committee monitoring the reform program with representation from \"public sector, private sector, civil society, and trade unions.\""
    },
    {
      "heading": "Completing the Caribbean voyage (policy priorities and structural reforms)",
      "content": "- Overarching goal: \"building on stability to lay the structural foundations of sustained and inclusive growth.\"\n- Competitiveness:\n  - Exchange-rate adjustment can restore competitiveness (\"letting the exchange rate depreciate... has helped restore a good deal of lost competitiveness\").\n  - High energy costs are a binding constraint: \"Electricity costs three times as much in Jamaica as in the United States. It costs even more in Barbados.\"\n  - Policy directions: \"conserving and renewing energy,\" \"bring more competition and dynamism to the energy sector.\"\n- Human capital and labor:\n  - Invest \"more smartly in education and training\" to match skills to labor-market needs and lift youth prospects.\n  - Make labor markets \"more effective in creating jobs.\"\n- Business climate and public sector:\n  - Improve business environment by \"reeling in much of the red tape\" and simplifying fiscal incentives (\"fiscal incentives could be made simpler and less murky\").\n  - Public sector should provide \"greater predictability, transparency, and impartiality.\"\n- Regional cooperation:\n  - Advocate regional approaches to \"transportation infrastructure and the marketing of tourism.\"\n  - Warning against tax competition: \"There would be more revenue for all if countries resisted the temptation to compete with each other on taxes to attract business.\"\n- Climate change and resilience:\n  - Climate change is \"a first-order global priority\" and a direct threat to low-lying islands (example: \"Georgetown, Guyana’s capital, lies entirely below sea level\").\n  - National/regional adaptation priorities: invest in resilient infrastructure; improve water management; better land planning; strengthen institutional disaster management; strengthen catastrophic risk insurance frameworks.\n- Three guiding principles for reform ownership and implementation:\n  - Ownership of the reform program.\n  - Stewardship of the economy, including nurturing resources and investing in people.\n  - Partnership with each other and with the international community, including the IMF."
    },
    {
      "heading": "A changing IMF (how the IMF supports the Caribbean)",
      "content": "- IMF as forum for international economic cooperation: \"owned and operated by its members\" including 188 member countries.\n- Three core functions delivered to members:\n  - Policy advice: convene knowledge and best practices; focus on sustainable and inclusive growth in the Caribbean through high-level conferences (Trinidad 2012, Bahamas 2013, Montego Bay later in 2014).\n  - Lending:\n    - \"Making 159 new lending commitments and disbursing almost $200 billion\" since the crisis.\n    - Partnered with Antigua and Barbuda, St. Kitts and Nevis, Jamaica, Grenada; supported recovery after natural disasters in Haiti, Dominica, St. Lucia, and St. Vincent and the Grenadines.\n  - Capacity building:\n    - Technical assistance and training to members; \"technical assistance to 90 percent of them.\"\n    - Regional engagement through CARTAC (technical assistance center in Barbados) and emphasis on strengthening public financial management systems.\n- Institutional stance and evolution:\n  - Shift toward prioritizing \"growth and jobs,\" addressing \"excessive income inequality,\" climate change, and female labor-force participation.\n  - Increased emphasis on protecting social safety nets and sharing adjustment burdens fairly.\n  - Commitment to listen, learn, and adapt to member needs; reframing the IMF as combining \"head\" and \"heart.\""
    },
    {
      "heading": "Conclusion",
      "content": "- Both the Caribbean and the IMF \"are very different today\" than in previous decades.\n- Progress requires continued reform, ownership, stewardship, and partnership to realize inclusive and resilient growth.\n- Optimistic closing: invoke Derek Walcott—aspiration for \"days when every street corner rounds itself into a sunlit surprise.\"\n\nSource: The Caribbean and the IMF—Building a Partnership for the Future, Christine Lagarde, Managing Director, International Monetary Fund, June 27, 2014.\n\n---\n\n\n References\n\n- Barbados and the IMF\n- Grenada and the IMF\n- Jamaica and the IMF\n- St. Kitts and Nevis and the IMF\n- Trinidad and Tobago and the IMF\n- St. Lucia and the IMF\n- Technical Assistance -- A Factsheet\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/sp062714"
    }
  ],
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    "[Markdown version](/en/news/articles/2015/09/28/04/53/sp062714/index.md)",
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    "Published: June 27, 2014",
    "Regional legacy: \"low growth, high debt, low competitiveness, high unemployment.\"",
    "Growth performance:",
    "Public debt and fiscal vulnerability:",
    "Social outcomes and labor markets:",
    "Crisis legacy:",
    "Jamaica reform example:",
    "Overarching goal: \"building on stability to lay the structural foundations of sustained and inclusive growth.\"",
    "Competitiveness:",
    "Human capital and labor:",
    "Business climate and public sector:",
    "Regional cooperation:",
    "Climate change and resilience:",
    "Three guiding principles for reform ownership and implementation:",
    "IMF as forum for international economic cooperation: \"owned and operated by its members\" including 188 member countries.",
    "Three core functions delivered to members:",
    "Institutional stance and evolution:",
    "Both the Caribbean and the IMF \"are very different today\" than in previous decades.",
    "Progress requires continued reform, ownership, stewardship, and partnership to realize inclusive and resilient growth.",
    "Optimistic closing: invoke Derek Walcott—aspiration for \"days when every street corner rounds itself into a sunlit surprise.\"",
    "[Barbados and the IMF](http://www.imf.org/external/country/BRB/index.htm)",
    "[Grenada and the IMF](http://www.imf.org/external/country/GRD/index.htm)",
    "[Jamaica and the IMF](http://www.imf.org/external/country/JAM/index.htm)",
    "[St. Kitts and Nevis and the IMF](http://www.imf.org/external/country/KNA/index.htm)",
    "[Trinidad and Tobago and the IMF](http://www.imf.org/external/country/TTO/index.htm)",
    "[St. Lucia and the IMF](http://www.imf.org/external/country/LCA/index.htm)",
    "[Technical Assistance -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-capacity-development)",
    "[Speeches](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
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