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Opening Remarks by Deputy Managing Director Tao Zhang at the 2019 Caribbean Forum

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Via IMF (Den Internationale Valutafond)

Opening Remarks by Deputy Managing Director Tao Zhang at the 2019 Caribbean Forum







November 6, 2019















The Most Honorable Prime Minister Mia Mottley

Prime Ministers, Ministers and Central Bank Governors

Representatives of International Organizations

Public and Private Sector Participants

Friends and Colleagues:

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Good morning.

Welcome to the 2019 Caribbean Forum on Regional Transformation. I am very
glad to see old friends, and new faces. Thank you all for sharing your time
with us today. I would also like to thank the Government of Barbados for
its warm hospitality, and Prime Minister Mottley for her strong support for
the Forum. I would also like to thank the Caribbean Development Bank for
their great effort in co-organizing this event with us.

The annual Forum—the ninth in the series—is an important platform for
brainstorming and collaborating with key stakeholders on the challenges
facing the region and the possible solutions to address them.

This is the first time I have the pleasure of visiting this beautiful
country. Let me congratulate Barbados on its excellent progress in
implementing the Barbados Economic Recovery and Transformation Program, or
better known to some of you as simply “BERT.” Public debt is now on a clear
downward trajectory, which is one welcome indicator of the progress being
made under “BERT.”

Hurricane Dorian

I also want to express my deepest sympathies to the government and people
of the Bahamas for the loss of life and devastation caused by Hurricanes
Dorian. The recent hurricane has once again highlighted the special
vulnerabilities of the Caribbean, and the continued need to strengthen
resilience. I am glad that this forum will devote a special session to
explore a better way to build resilience.

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Regional Transformation

The theme of this forum is regional transformation. I think this is
important, because regional transformation is essential to support higher
economic growth for the Caribbean. For too long, economic growth in the
Caribbean has languished, offering too few opportunities, in particular,
for its young people. This has led to rising social and economic
challenges—including poverty, inequality, unemployment, and crime.

Transformation is the “T” in Barbados’ BERT program. It is about exploring
the opportunities that new technology offers, and overcoming obstacles that
have held back the region for too long. So what can be done to move
forward? That is what brings us together this morning.

As reflected in our agenda, to those of us working in this area, three
areas are vital to regional transformation: (1) regional integration and
leveraging common institutional arrangements; (2) working towards a
disaster resilience strategy; and (3) improving tax policy. Let me offer a
few brief thoughts on these topics, before passing the baton to our
panelists.

The first is Regional Integration

Deeper economic integration within the Caribbean has been a priority since
the establishment of CARICOM in 1973, but progress has been limited. Recent
work by IMF staff found that greater intraregional trade and mobility of
people and capital could generate significant macroeconomic benefits.

Today’s discussion will look at possible actions to boost the regional
integration process. One example would be reducing non-tariff barriers and
trade costs stemming from the absence of harmonized customs laws. Another
would be removing legal restrictions that constrain the free movement of
people and capital.

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Second, Climate Change and Disaster Resilience Strategy

As I mentioned earlier, climate change is expected to intensify the impact
of natural disasters and worsen the vulnerabilities of small states in the
Caribbean. Rising sea levels increase risks of erosion and flooding, and
warmer water temperatures heighten the potential for more intense
hurricanes. We must come together to address the challenges posed by
climate change, and help those most affected by it.

Recent IMF analysis identified a three-pillar strategy for building
structural, financial, and post-disaster resilience.

Structural resilience
will require infrastructure and other investment to limit the impact of
disasters.

Post-disaster resilience
aims to facilitate a speedy recovery after an event, supported by
contingency planning such as emergency response planning and related
investments.

Emergency relief and financing the reconstruction effort following
catastrophic events like Hurricane Dorian is a key responsibility of the
global community. Soon after the hurricane hit, leaders of the CARICOM
showed strong solidarity with The Bahamas, including by deploying security
forces.

Financial resilience
is built based on fiscal buffers and using pre-arranged financial
instruments to protect fiscal sustainability and mange recovery costs.
Recognizing the need to support our members in the event of a natural
disaster, the IMF has recently increased access to both our Rapid Financing
Instrument and to our Rapid Credit Facility to 50 percent of quota per year
and 100 percent of quota on a cumulative basis. Several countries in the
region, including Dominica, Saint Lucia, and Saint Vincent and the
Grenadines, have made use of the RCF over the last decade.

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Two countries are piloting a Disaster Resilience Strategy: Grenada and
Dominica. I look forward to hearing their experiences, including more about
their challenges and constraints.

Lastly, Improving Tax Policy

All Caribbean countries face the challenge of how to maintain a tax system
that is competitive, while also raising adequate revenue. In the regional
context, avoiding a race to the bottom could provide substantial collective
benefits. But how to achieve this is a problem that has challenged the
region for decades—in particular, in light of the bargaining power of large
tourism services providers. Today’s discussion provides an opportunity to
hear views from policy makers, taxation experts, and industry
representatives on these points.

Conclusion

To conclude, I would like to highlight the great importance I place on
today’s discussions, which I am confident will benefit all of us. I would
also like to emphasize that the IMF remains fully committed to assisting
and supporting the Caribbean countries. I look forward to fruitful
discussions and engaging with all of you on the important
topics before us. Thank you very much.


IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Randa Elnagar

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson








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