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President of the Caribbean Development Bank, (CDB) Dr. Compton Bourne and Governor of the Eastern Caribbean Central Bank, Mr. Dwight Venner, opened the meeting with presentations.
Presentations were made to the Heads while discussions were held on the state of the economies of Dominica and Barbados.
The meetings in St Lucia come at time when there is a risk of a meltdown in Caribbean economies.
This has been precipitated first of all, by the loss of income due to low commodity prices, and secondly, with special reference to the small islands in the Eastern Caribbean and their loss of the preferential banana market.
The mainstay of the economies of the Eastern Caribbean territories is bananas.
Some time ago the United States had taken the banana issue to the World Trade Organisation (WTO), contending that the European banana import regime was unfair to U.S. banana exporters and that it breached WTO rules.
The WTO ruled in favour of the Americans, and consequently, since that time the banana industry in the Caribbean countries has been experiencing grave difficulties.
Another main plank of Caribbean economies is tourism. Almost all Caribbean countries pride themselves about their sun, sea and sand.
However, since the September 11 terrorist attacks in the U.S. last year, the tourism industry in the Caribbean has suffered tremendously. There has been a drop-off in tourist arrivals, and this has also affected the airline industry in the region.
As a result, many workers lost their jobs in the islands and this had a negative effect on the economy of the region.
There have been other factors contributing to the downturn in the regional economy.
According to President Bharrat Jagdeo, the external factors have not been helpful since many decisions affecting the Caribbean are made in foreign boardrooms, where Caribbean concerns are hardly ever featured.
Many Caribbean countries are now at the stage where Guyana was 10 years ago - very low capital accumulation.
However, due to prudent fiscal management, the Guyana economy has met all its mid-year targets.
It has been successful with further debt reduction. The revenue base has also expanded.
Barbados is slipping into recession while in Trinidad and Tobago, the budget deficit is a whopping TT$1.7 B. In The Bahamas the downturn in the tourism sector has hit the economy and there are signs that the economy may contract this year.
Even in the U.S., the economy has been experiencing a double recession.
Corporate failures and low consumer spending, indicating weak consumer confidence in the economy, are an illustration of this second recession.
One of the topics on the agenda of this weekend's CARICOM meeting is the establishment of a Regional Stabilisation Fund.
While Guyana is facing some challenges, it is one of two countries that recorded a positive growth rate last year. The other is Jamaica.
Many of the countries today face the problem that Guyana faced about 10 years ago, when their wages and salaries and debt service accounted for all of the revenue.
In Guyana's case, the debt servicing took 94 per cent of the revenue and wages and salaries another 20 per cent - representing 114 per cent of revenue.
The Government had to borrow to finance debts and wages and salaries.
Many CARICOM countries are bordering that kind of situation, because they have been running fiscal deficits for the last four years and they have had to engage in commercial debts to finance the deficits. This raised the debt servicing payments because they are very short and the next year's budget becomes problematic.
The countries need cash injection and the multilateral financial institutions are not going to put that money in unless there are some tough decisions made, which will require a lot of sacrifice by the people of those countries.
Even if the financial institutions decide to do that it is not going to come soon, as the processes take a long period.
The ongoing meeting in St. Lucia will also examine ways to deal with the crisis.
In Guyana's case, the situation is much better in terms of cash flow and financing deficits, because the Government does not borrow on commercial terms, or the domestic market to finance deficit.
Expenditure is financed from revenue, grants and soft loans with 40 years repayment and some of them at less than one per cent interest.
St. Lucia is one of the countries that have been drastically affected by the drop in banana exports. The recent changes in the European Union import preference regime and the increased competition from Latin American bananas, have made economic diversification increasingly important in St. Lucia.
Improvement in the construction sector and growth of the tourism industry, helped to expand the GDP in 1998-99. The agriculture sector registered its fifth year of decline in 1997 primarily because of a severe decline in banana production.
The manufacturing sector is the most diverse in the Eastern Caribbean, and the government is beginning to develop regulations for the small offshore financial sector.
The country's GDP composition by sector is agriculture, industry and services. (Government Information Agency - GINA)