The International Monetary Fund (IMF) has pledged to assist Caribbean countries to deal with their economies, urging governments to continue focusing on improving exports and reduce external current deficits.
In a communiquè issued recently after a two-day high level forum attended by CARICOM foreign ministers and central bank governors in Port of Spain, Trinidad, the Washington-based financial institution said the region had “important strengths” on which it could build on.
“Reforms to address structural impediments will also help in that regard although the implementation of such reforms is challenging in the short term, in the long run they could bring undoubted benefits for the economies of the Caribbean and help create jobs.
“Political stability, strong investor protection and observance of the rule of law have made it an attractive destination for investment,” the communiquè noted.
The IMF said that countries with high debt ratios will benefit from pursuing fiscal adjustment in the contest of weak growth can be difficult to sustain, the cost of pursuing unbalanced policies can be more disruptive economically and socially then gradual and credible adjustments.
According to the IMF, there has been an increase in financial-interconnectedness in the region and this is an issue which presents large benefits but also carries risks.
“To help minimize systemic and contagion, it would be advisable to deepen cooperation among supervisory authorities, harmonize relations, meeting international best practices and strengthen the crisis resolution and deposit insurance frameworks,” the IMF said, adding that calls for a broad-based collective and collaborative approach.
“Multilateral financial institutions as well as donor partners will need to work closely and coordinate their assistance to maximize the benefits to the region,” the IMF said.
Saul Izondo of the IMF Western Hemisphere Department said the region is recovering slowly from the economic recession and the forum has now given the financial lending institutions with much information for supporting the Caribbean.