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Sir Dwight Promotes “One Economic Space” Principle

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Sir Dwight Vennor Governor ECCB

Sir Dwight Vennor Governor ECCB

Friday, May 06, 2005 - Economic growth has returned to the Eastern Caribbean sub-region following “post 9 11” contractions in these economies in 2001. This finding has been published in the recently completed Eastern Caribbean Currency Union (ECCU) 2004 Regional Surveillance Report. The report was prepared by officials of the International Monetary Fund (IMF) following intensive research into the macroeconomic conditions of ECCU member states.

According to the report, the region’s economies strengthened in 2003 by 2.5 percent and there were significant improvements to overall fiscal balances. This reinvigoration of growth was primarily driven by the tourism industry which picked up pace as security concerns for global tourism in the aftermath of 9/11, have diminished. The IMF also notes that several new tourism facilities and tourism related services have been developed in the islands.

According to the report, the weakening of the US dollar against major currencies and fewer natural disasters also contributed to improved of goods and services in 2003/2004. Meanwhile reserve coverage of the Currency Board has continued to increase well beyond the statutory level of 60 percent and inflation remains very low.

St. Lucia and St. Vincent and the Grenadines in particular have been singled out by the IMF
as having maintained respectable levels of output. However the report expresses concern that in other member states, output is estimated well below potential levels.

Those issues and many more factors related to the economic activities of the ECCU states were presented during a video conference for the for media representatives from the Eastern Caribbean region on April 28th. The session chaired by Sir Dwight Venner, Governor of the Eastern Caribbean Central Bank, accompanied by representatives of the IMF’s Western Hemisphere Department Ms. Ratna Sahay.

Sir Dwight says “it is very important from time to time as in these currency union surveys that an assessment is done of the performance of these economies. The Fund’s assessment is, by and large, one would say an objective one. What it does for the region is that it allows us, since we don’t have access to international capital markets, to have a forum where these economic issues can be placed on the table.”

Sir Dwight says the ECCU faces great challenges both domestically and internationally. He says the only way the challenges can be countered is through open economic dialogue between the Fund and member countries. This type of openness will foster integration and serve to strengthen the ECCB’s markets.

“We’ve met with some measure of success in this area and of course you will be aware that recently Grace Kennedy from Jamaica has listed on our market, which is a significant break through for the ECCB or ECCU area. In implementing what we call a wider strategy of economic and financial integration, with the region as a whole, we’ve now established ourselves as the regional stock exchange; and that is a platform complimented by measures of stability, which we hope will push the currency even more forward.” Sir Dwight said.

Some areas which the IMF focussed on in its 52 page report included macroeconomic conditions in the ECCU countries, Public Debt Levels, Caribbean Preferential Trade Arrangements and Fiscal Slippage.

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