The global financial crisis and its impact on tourism and foreign direct investment in the region were among matters discussed at the 24th Meeting of the Bureau of the Conference of Heads of Government of the Caricom Community in St. John’s, Antigua Saturday.
Prime Minister the Rt. Hon. Hubert Ingraham participated in the Meeting, along with Bureau members the Hon. Baldwin Spencer, Prime Minister of Antigua and Barbuda and Chairman of Conference, and the Hon. Dean Barrow, Prime Minister of Belize.
During the meeting, the Bureau received a report from the Committee of Central Bank Governors on the implications of the global financial crisis for the region. The Committee recommended to Heads that Caricom Governments continue appropriate prudential measures regarding foreign exchange reserves, deposit insurance, capitalization ratios, local asset ratios, cross boarder supervision and supervision of non-banks such as insurance companies and pension funds.
The Committee also urged Governments, where appropriate, to encourage a change in the composition of bank lending toward more productive and export-related activities, to streamline contingency planning with respect to financial and non-financial sectors and to undertake public investment programmes that create jobs and facilitate production of tradable/export goods.
It was noted that the Caricom banking sector was spared many problems because it does not hold toxic mortgage-backed securities and holds very limited forms of other types of exposure.
The Bureau urged multilateral financial institutions (IFI) to show greater sensitivity toward small vulnerable economies in this period of turmoil. In particular, the IFIs were urged to reverse the practice of graduation based solely on GDP per capita.
Members of the Bureau meantime reiterated the call for increased democratization of the international financial architecture and encouraged the Committee of Central Bank Governors to continue its work with respect to contingency planning in the financial and non-financial sectors.
Tourism and Foreign Direct Investment
Regarding the impact of the financial crisis on tourism and foreign direct investment in the region, Members took note of the World Tourism Organization’s (WTO) report indicating that tourism worldwide had grown by 7% in 2007 but is expected to grow by only 2% in 2008.
Tourism from the United States – the region’s principal market – is expected to be down by 6% over thanksgiving.
It is projected that Caribbean tourism will experience negative growth next year. Heads discussed measures being taken by some resorts in the region to attract guests including price slashing exercises.
The Bureau also took note that a number of development projects, particularly tourism and hotel related projects, have been deferred or postponed as a result of the international financial crisis, and expressed support for the efforts of the Caribbean Tourism Organization (CTO) and Caricom Tourism Ministers in mounting an enhanced marketing programme for regional tourism.
As for trade, Heads discussed the implementation of the EU-Caricom EPA, indicating that Heads expect to endorse the negotiating mandate that will guide Caricom negotiators in discussions leading to a Canada-Caricom trade and Development Agreement.
2008 Atlantic Hurricane Season – Assistance for Haiti
The Bureau also discussed the impact of the 2008 Hurricane Season on members of the Community and agreed to recommend to the Conference of Heads that notwithstanding assistance already extended to Haiti by a number of member states, consideration be given to a further contribution of $2 million from member states to the country severely impacted by four hurricanes and tropical systems this summer.
Members noted that there remained an urgent need to assist the Haitian Government in the delivery of food, particularly to communities left isolated by roads and bridges washed away during this year’s storms.
The recent presidential election in the United States was also discussed by The Bureau, which identified priority issues for engagement with the new administration.
Additionally, the Bureau reviewed preparations for upcoming scheduled summits: a Summit between the Heads of Government of Caricom and the president of Cuba on December 8; a Summit of Latin American and Caribbean Presidents and Heads of Government to take place in Bahia, Brazil December 16-17 and the 5th Summit of the Americas scheduled for Port of Spain, Trinidad and Tobago in April, 2009.
Prime Minister Ingraham completes his Bureau term on December 31. President of Guyana Bharrat Jagdeo joins the Bureau in January 2009.