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MONTHLY NEWSLETTER

LATEST ISSUE

January, 2018
Caribbean Economic Report, January 2018
#EvenItUp Global Growth Strengthens and so does Inequality; Barbados int'l reserves down 44% y/y in Nov; Cuba challenged by availability of foreign currency; DR receives

Caribbean Economic Report, December 2017
#BuildBackBetter building resilience with technology-lessons from Estonia; Bahamas reserves strengthen on borrowing, reserves decline in Barbados, Guyana and Trinidad; Tourism strengthens in Cuba, DR, Jamaica

Caribbean Economic Report, June 2017
Venezuela’s Spills Overs to the Caribbean; New governments in The Bahamas and Cayman Islands; Barbados faces steep fiscal adjustments; Jamaica exceeds IMF reserves target; Reserves

Caribbean Economic Report, April 2017
Reserves expand in Aruba, Bahamas, Suriname; down in Barbados. Cayman Islands grew 2.5% and T&T contracted 10.8% in Q3’16. Guyana oil production by 2020. Curacao

SPECIAL REPORTS

February 15, 2018
Barbados’ international reserves fell at the end of 2017 to the lowest level since January 1996. Meanwhile, the Central Bank has been financing the government

October 4, 2017
Marla reviews top highlights from the 2017/2018 budget statement for Trinidad and Tobago, takes a deeper look at the budget (expenditures, revenue and deficit), evaluates

September 20, 2017
Dukharan evaluates risks and long-term impacts of the BREXIT decision for the Caribbean, geopolitical implications and recommendations for Caribbean governments.

LATEST INSIGHTS

The IMF’s Article IV Staff Report on Trinidad & Tobago published in November 2017 validated Marla's view that around 2021 - 22, if everything continues as is, T&T may run into a Balance of Payments crisis, and have to ask the IMF for support.

Marla reviews the risks and outlook for 2018 on the global and regional scale, reviewing what is driving slow growth globally, and highlighting growth scenarios and top risks for the Caribbean in 2018.

November 27, 2017
With 2017 hurricane damage estimated at USD5 billion, it seems that only now have we collectively woken up to the urgency of building resilience and mitigating natural disaster risks in the Caribbean.

MAKING A DIFFERENCE

Follow the key policies and initiatives Marla is working on to set the Caribbean on a more sustainable economic trajectory.

FISCAL RULES

The Keynesian approach to economic management assumes that higher fiscal spending stimulates growth. But in T&T, instead of running fiscal surpluses and saving energy windfalls, we continue to spend more, at times even incurring fiscal deficits and borrowing to spend when energy revenues are high. When energy prices decline, we are left with insufficient fiscal space or capacity to borrow and compensate for the attendant shortfall in energy derived fiscal revenues. But there is something we can do relatively quickly, to dampen the pro-cyclicality of fiscal policy and make it more counter cyclical…

CARIBBEAN TRANSFORMATION

The Caribbean has come to a point where after some 50 years of independence for most of us, we are in a state of socio-economic decline. And unless we are in a balance of payments crisis, and can appeal for IMF intervention, there will be nobody coming to our rescue. Many of us are classified as middle / upper middle / high income which means we are treated in a manner that is not appropriate for developing countries by the World Bank and other development agencies, an atrocity in itself. We need to recognize that we have to cause fundamental shifts in the way we run our countries as a matter of urgency, lest we deteriorate…

FOREIGN DIRECT INVESTMENT

Because in the Caribbean we generally run fiscal deficits, this behaviour drives deficits on the current account of the balance of payments. The net outflow of USD as reflected in the current account deficit, is financed on the capital account of the balance of payments, usually via sovereign debt and by foreign direct investment. It is argued that in the region we do not benefit from FDI to the extent that we should, based on concessions granted, inadequate transfer of knowledge, etc. We propose an FDI-driven growth model which does not rely on concessions. Instead, the foreign investor pays the usual corporate tax rate, and instead of…

FINANCIAL INCLUSION

While financial inclusion itself is not a sustainable development goal, it underpins 8 of the 17 SDGS including reducing poverty, income inequality, and gender inequality, so much so that the World Bank has a goal of universal financial inclusion by 2020, which is even more aggressive a timeline than the SDGS. Due to ‘de-risking’, as a region, the Caribbean is becoming increasingly financially excluded on a national level. Poverty levels are already around 40%. According to the World Bank, around 2 billion people (40% of the world’s adults, 50% of the world’s poorest) are unbanked. Over one billion women worldwide are…

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