The Deputy Prime Minister and Minister of Finance, the Hon. Peter Turnquest addressed the regional workshop “Rules-Based Fiscal Policy Frameworks for the Caribbean Region,” presented by the Inter-American Development Bank (IDB). The two-day event was held at the British Colonial Hilton, December 4 and 5, 2017 and brought together stakeholders including representatives of the IDB, government, Central Bank officials and regional policymakers for finance. Topics for discussion included — International Experience with Fiscal Rules: Criteria of Good Practice and Effectiveness, The Long View: Fiscal Anchors, Medium-Term Fiscal and Budget Frameworks and Growth, Fiscal Institutions to Ensure Fiscal Sustainability and Stability, Design and Implementation of Fiscal Rules, Stabilization Funds and Transparency, Credibility and the Role of Independent Fiscal Institutions.
Mr. Turnquest on Monday said the workshop brings together an “outstanding” group of fiscal experts, policymakers and other practitioners who provide the ingredients for a “fruitful” and “rich” exchange on the topic of rules-based fiscal frameworks. He said while some regional countries are further ahead than others in undertaking fiscal consolidation, there is “broad” acknowledgment of the need for stronger and more durable measures, equal to addressing the state of the country’s fiscal affairs. Fiscal and debt sustainability are topical issues on the agenda of regional policymakers, especially Ministers of Finance, both of which are important for promoting stable macroeconomic growth, said the Deputy Prime Minister.
“By virtue of our responsibilities, we grapple with the challenging dimensions of our budgetary choices—considerations such as: whether we are obtaining value for monies spent; their impact on future generations from the standpoint of equity; the need to build up buffers to deal with sure and certain adverse shocks; and maintaining credibility in external markets, partly because of our dependence on foreign direct investment. “The need to accelerate our fiscal sustainability efforts has become more imperative, given the less than desirable state of our finances and the ongoing external vulnerabilities we face. To be sure, for most of us, the fiscal space we enjoyed prior to the onset of the recent global financial crisis has been depleted,” said Mr. Turnquest.
He remarked that deterioration in the overall deficit and the public debt levels are key sources of risk to the country’s maintaining economic stability, and the general view is that it cannot continue along the same path. The country’s current state of affairs has crystalized the need for “urgent” measures to restore medium-term budget and debt sustainability, and a more credible fiscal consolidation programme.
“The path to recovery which, because of the nature and extent of the reforms necessary, will not happen overnight. Nor will it in any sense be easy or painless. Instead, it requires a multi-year approach and a well-designed framework, to take account of all of the considerations and the tension between the pursuit of the necessary reforms and the economic growth agenda. And it takes political will, resolve, and leadership. “At this stage, what is important is that the Government has identified and is moving, with a sense of urgency, to execute on a concrete strategy that will: bring stability to the public finances by reducing the deficit and the debt to sustainable levels; grow the economy and provide jobs; and remove obstacles to growth and competitiveness.”