CARICOM SG presses the case for Debt Relief and Concessional Financing for the Region

The issues of debt and the criteria for access to concessional financing need urgent attention in the context of financing for development if the Caribbean is to achieve the 17 Sustainable Development Goals (SDGs).

So said Secretary-General of the Caribbean Community (CARICOM) Ambassador Irwin LaRocque as he addressed an Interactive Dialogue at the United Nations Summit on the Post 2015 Development Agenda at UN Headquarters, New York, USA on Saturday 26th. Among participants in the dialogue were the Presidents of Ireland, Argentina, Ghana and the Cameroon, the Prime Ministers of Sweden and Denmark, the Foreign Ministers of Australia and Austria as well as the United Kingdom’s Secretary of State for International Development and Mr Mark Zuckerberg, the CEO of Facebook.

Speaking on the topic “Fostering Sustainable Economic Growth, Transformation and Promoting Sustainable Consumption and Production”, the Secretary-General stated CARICOM welcomed any initiative for strong collaborative action to address these issues urgently “if our Region is to continue on the path to sustainable economic growth.”  He recommended that action could include all Small Island Development States (SIDS) and development partners such as the UN and its agencies, the International Financial Institutions, and the Organisation for Economic Co-operation and Development (OECD).

Ambassador LaRocque outlined the major challenges threatening the Community’s development gains. These included “decade long persistent low or negative growth performance barely averaging 1 percent over the last five years; the lingering, debilitating impact of the global financial and economic crises  of 2007 and 2008; the reality of geographic location in a region described as one of the most natural disaster prone in the world; and a crushing public debt burden of more than US$24 billion, attributable mainly to external shocks and climatic events – a debt burden  which will require growth rates between 6 and 10 percent.”

The Secretary-General pointed out that CARICOM’s high level of debt was of particular concern and constituted a major drag on sustainable economic growth in the Region. “Five of our Member States are among the most highly indebted countries in the world, while ten (10) are considered as having unsustainable levels of indebtedness, with debt to GDP ratios ranging from 65-140%,” he said. He also noted that a significant portion of that debt was due to factors outside the control of the Region and to reconstruction after natural disasters.

Ambassador LaRocque commended a proposal put forward by United Nations Economic Commission for Latin America and the Caribbean to alleviate that debt burden to the international community for serious consideration.  That proposal called for the conversion of multilateral and bilateral debt into special funds to address external economic shocks, natural disasters, and education and human resource development. He said it had “the potential to create much needed fiscal space and assist in fostering inclusive economic growth.”

He told the session that given the limited domestic and regional resources were not sufficient to meet the financing needs for the Region’s sustainable development, there was need for external concessional financial resources.

“However, CARICOM States have been graduated out of concessionary development financing due to their classification as middle income countries, based on the criterion of GDP per capita,” the Secretary-General added. He argued that the criteria for concessional financing must not be based solely on GDP per capita, and must be changed to include economic and environmental vulnerability.

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