Speech

Opening Remarks by IMF Deputy Managing Director At the 2015 High-level Caribbean Forum on “Financing Growth”

September 2, 2015

As prepared for delivery

Honorable Prime Minister Timothy Harris,

Honorable Prime Ministers and Heads of Government, Ministers,

Governor Venner and Central Bank Governors,

Development partners and other stakeholders,

Friends and colleagues,

Good morning. On behalf of the IMF, I would like to welcome all of you to the 2015 High-Level Caribbean Forum, Financing Growth. In its fourth year, the Forum is still relatively young. I can tell you that it is a tradition close to my heart, and one that I am convinced will contribute to stronger cooperation and better outcomes for the region over time.

First I would like to thank the government and people of St. Kitts & Nevis for their warm hospitality, and for hosting the 2015 forum in this beautiful spot. I had the opportunity yesterday, thanks to Prime Minister Harris, to get to know a little bit more about the country—from a different perspective than what is in the reports my staff writes for me. I was able to visit quite a lot of these beautiful islands and meet with a broad cross-section of people.

I would also like to express my appreciation to our development partners from the international community, and especially Caribbean policymakers, for providing us with the opportunity to continue this important dialogue.

The Caribbean Forum is a key platform for us: for listening, for expanding our mutual understanding, and for collaborating. These are essential ingredients for advancing―together― solutions to the key challenges facing the region. Indeed, global macro risks have not gone away. This region faces, among other things, possible consequences from the impending rise in U.S. interest rates, the slowdown in China and South America, the opening of Cuba to U.S. tourists, as well as other competitiveness challenges.

And of course, we have been cruelly reminded of the ever-present natural disaster risks facing the region following the loss of life and severe damage that Tropical Storm Erika caused to Dominica last week. I know that our staff has reached out to the Dominican authorities with assurances that we stand ready to provide emergency financial assistance if they should need it, but I want to personally reiterate here the Fund’s commitment to support the region in circumstances like these.

I am pleased to note the strengthening of economic growth in the Caribbean over the past year—this is what all of us are working towards. However, growth is still a challenge here and in the rest of the world. It remains fragile and uneven in the region. And, although the recovery in the United States looks robust, growth prospects have deteriorated in many parts of the globe compared to a year ago: in many emerging markets, notably in Latin America, but also for example in Canada – a key tourism market for this region; and Europe still looks fragile.

It is good then that the 2015 Caribbean Forum keeps the focus on growth, this year in particular on financing growth. This is exactly in line with efforts by the international community right now to secure sustainable development. Indeed, our quest for growth must be cast firmly in the context of “sustainability” ―growth that is durable and equitable, and that safeguards the environment. If you will allow me, I would like to discuss briefly the Fund’s role in this global push for sustainable development, and how this is relevant for the Caribbean Forum.

During the Third Financing for Development Conference in July in Addis Ababa, the world committed to support a broadened post-2015 development agenda based on concrete Sustainable Development Goals― SDGs―and to mobilize resources in support of these universal goals.

I attended the Conference, the first of three summits in support of the sustainable development campaign: the next two are the UN Summit this month in New York—where the agenda will be finalized—followed by the UN Climate Summit in Paris in December.

The IMF is strongly committed to this global partnership. As you know, the IMF’s key mandate is to promote global economic stability, a precondition for sustainable development. We have also started deepening our focus on aspects of economic, social, and gender inclusion, and environmental protection, which are core SDG objectives and vital for balanced and inclusive growth.

We have identified several initiatives to enhance our support for the post- 2015 agenda. These aim to boost economic resilience in our members while they seek to attain their growth objectives—and will have a direct impact on our work in these areas here in the Caribbean. Specifically, we will:

• Deepen our policy advice on the macro-aspects of key topics related to achieving and financing the SDGs—infrastructure provision, inclusion, and vulnerabilities facing small states;


• Enhance our technical assistance to strengthen domestic revenue potential; build capacity and institutions in this and other relevant areas, including to address the special needs of fragile and conflict-affected states—and those susceptible to natural disasters; and boost access to our concessional resources for developing countries.


• In addition, since we last met, the Fund also continued analytical and policy work focused specifically on Small States. As you know, the Executive Board met to discuss the second policy paper in February, and work is ongoing to integrate the substantive findings related to fiscal policy frameworks and competitiveness into our program and policy work.

And here we meet again at the annual Forum. While the 2014 conference program focused on unleashing growth, this year, as promised, we are concentrating on areas of importance that you flagged to us at the 2014 Forum in Montego Bay related to financing growth: meeting the energy challenge and financial sector issues.

Session I will kick off the conference with a presentation on the global and regional outlook that will set the stage for subsequent policy discussions.

Session II will focus on the energy sector, opening with an exposé on the macroeconomic challenges related to energy production and distribution in the Caribbean. We will then drill down into the important role of regulatory reforms in the sector and consider whether and how to boost foreign investment in the sector. We are privileged that Prime Minister Gonsalves has agreed to present the experience of St. Vincent and the Grenadines, which is a very interesting and instructive case study of a comprehensive energy reform underway.

In addition to policy-makers, the private sector and development banks have a critical role to play in this area and we are grateful for their participation in the discussions. I will be particularly interested to hear views on how these three entities—governments, private sector, donors—can best collaborate to achieve policy makers’ objectives for better energy development.

On day two, we will turn our attention to the financial sector in Session III. We will consider ways to improve access to credit, and whether commercial banks can and should be doing more in this regard and what other types of financial institutions or structural reforms are needed to address this problem, which we hear from policy makers all over the developing country world. We will also review recent developments with correspondent banking relationships and implications from the global regulatory environment for the region.

These are critical issues in the region given the importance of the financial sector, both domestic and international, in many Caribbean countries, as well as the significant efforts underway, and progress achieved recently, to restore financial soundness and sustainability in some parts of the Caribbean.

Maintaining strong banks and safeguarding financial stability are key prerequisites for delivering stronger Caribbean growth. Like last year, let us aim to leave the Forum with practical and concrete recommendations to help reduce constraints to financing investment and strengthening growth in the Caribbean.

With respect to format, we looked closely at the feedback we received from you last year regarding the program and scope of discussions in Jamaica, as well as the feedback we received following the Bahamas Forum in 2013. First, we have invited a broad range of experts from the region and further abroad to share their insights and expertise. Second, we have tried to design the program in a

way that allows more time and space for interactive discussion and exchange of views with participants and the audience. That said, I would ask you now at the outset to please jot down ideas as we proceed about how we can continue to improve the format and content going forward.

In closing, let me say how pleased I am that the Caribbean Forum has become an annual tradition. My assurance to you is that we will continue to work to improve it, to deepen our dialogue still further, and strengthen the partnership between the region and development institutions.