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Press Release: IMF Managing Director Encourages Caribbean Countries to Face Challenges and Push Forward with Economic Reforms
July 5, 2010
Dominique Strauss-Kahn, the Managing Director of the International Monetary Fund (IMF), gathered with Caribbean leaders in Montego Bay, Jamaica, for the 31st Regular Meeting of the Caribbean Community (CARICOM). “Caribbean countries have an opportunity to put an end to the negative cycles of high debt and low growth that have been affecting their economies, and set forth towards a path of long-term, sustainable growth”, Mr. Strauss-Kahn said.
The Caribbean has been significantly affected by the global crisis, Mr. Strauss-Kahn noted in his presentation to the 15 heads of state and officials from the region, the first ever participation of an IMF managing director in the CARICOM meeting. High debt burdens and tight financing left Caribbean leaders with little room for fiscal stimulus, while the room to lower interest rates has been constrained by fixed exchange rate regimes. In some countries, strains have appeared in the financial sector, and the proposed tightening in international standards for offshore financial centers will also pose challenges.
Now that global growth is resuming, the Caribbean mirrors the global trend of a multi-speed recovery. Countries that rely largely on commodity exports may expect, in general, an easier and stronger recovery in economic activity than those depending largely on tourism—which is affected by the sluggish labor trends in advanced economies.
“This reality implies that the road to a sustainable recovery will need to be tailored to your own specific circumstances,” Mr. Strauss-Kahn said. “And, as in the advanced economies, it will be critical for those of you facing high fiscal and debt vulnerabilities to commit to comprehensive medium-term fiscal reforms, and to implement decisive adjustment efforts.”
Mr. Strauss-Kahn emphasized that the IMF is ready to help countries tackle the economic challenges and push ahead with reforms in their economies. The Fund has been expanding its engagement with Caribbean countries on several fronts: close work with member governments on policy support in the fiscal, monetary and financial areas; financial support, including to nine CARICOM countries in 2009/2010; technical assistance, to help countries in the region improve their institutional capacity and resilience to shocks; and a greater physical presence in the region.
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