"Building the pillars for economic success, resilience and fiscal stability"
Excerpted from the statement by the Hon. Dr. Kenny Davis Anthony, Prime Minister and Minister for Finance, Economic Affairs, Planning, and Social Security:
There are four basic challenges that confront us.
The first fundamental challenge is one of economic competitiveness. It presents through low economic growth rates. We know very well that our natural resources are simply not sufficient to sustain what we would like our standard of life to be. It means that we must, therefore, export products and services that are largely independent of natural resources to be able to afford our quality of life.
If what we produce and the services that we sell are not of sufficient quantity, quality and reliability, then we will not grow. Compounding this problem is that, while we can consume more of what we can produce, we will always remain largely dependent importers. Our ability to trade, how well we do business, will determine our future.
The second nagging and vexing problem with which we are confronted is persistently high unemployment, especially among our youth. We shall discuss this in more detail later.
The third fundamental challenge is that of inherently high vulnerability due to economic and natural shocks. This challenge is amplified; it is made more serious because of our small size and location. Most of our Caribbean countries face this classic problem. Natural events such as Tropical Storm Debbie, Hurricane Dean, Hurricane Tomas and the Christmas Eve Trough are a feature of our lives and often cause massive damage, relative to our size. Economic shocks such as a sharp rise in food and oil prices, 9-11 and most recently the 2008 Economic Crisis qualify as major disruptions requiring replacement of damaged infrastructure or major stimulus requirements.
The fourth challenge is one of fiscal deficits and high debt levels faced by the Government. In effect, the operations of Government are not sustainable in the long run, without adjustments. These operations are characterised by high levels of borrowing; Government is spending much more than it earns in revenue. As a consequence, the debt burden of Government moves upwards, with more and more Government revenue going towards debt repayments.