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CDB president warns 7 nations on rising debt

By Rickey Singh Bridgetown

PRESIDENT OF the Caribbean Development (CDB) Dr Warren Smith yesterday warned member countries of the regional institution to avoid facing their own "fiscal cliff"-as happened to the United States-by moving vigorously to reduce their "mounting" debt stock. 

At least seven borrowing countries currently confront this economic challenge.

They range from the Caribbean Community's sole energy-based economy, Trinidad and Tobago, to Barbados (which formerly boasted a record in robust economic management); to current crisis-ridden economies like Jamaica, Grenada, St Kitts and Nevis, and Grenada.

In his more than two-hour-long news conference, supported with printed statements and graphs, Smith discussed and answered questions varyingly related to the CDB's role as more than a provider of financial aid to Borrowing Member Countries (BMCs), as well as how it interacts with international financial institutions and donors involved as partners in this region's economic and social development.

In reviewing the CDB's activities for 2012 and providing the "economic background and prospects" for 2013, he disclosed that the debt levels of the seven BMCs (Jamaica and St Kitts and Nevis (the two highest); Antigua and Barbuda, Barbados, Belize, Dominica and St Lucia) "have become unsustainable".

And, he emphasised, "anchoring investor confidence, both at home and abroad, will require governments to take corrective policy action…"

As analysed by the CDB, "the fiscal policy agenda" of the seven economies identified  with "unsustainable debt levels" must include measures that tackle  improvements in tax yields by reassessing  the range of exemptions and concessions offered.

At a time of high unemployment levels for developed economies in Europe and the US, unemployment levels remain a major factor in the  still "unfolding" global crisis.

Available data provided by four of five borrowing countries disclosed the following jobless scenario for 2012: St Lucia (21.2 per cent; the Bahamas 14.7 per cent; Jamaica 14 per cent and Barbados 12.2 per cent.

In contrast, in Trinidad and Tobago was showing mid-year unemployment of merely four per cent compared with a 5.8 per cent rate at the end of first quarter 2011.

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