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Friday, December 4, 2009

CARICOM chairman says poor regional production contributes to impact of global crisis

GEORGETOWN, Guyana -- Guyana's President Bharrat Jagdeo has called on Caribbean Community (CARICOM) countries to increase their levels of productivity, which is key to economic advancement.

Jagdeo, who also chairs the regional grouping, said on Monday at an event in Port-of- Spain that the region’s laid back approach may be one of the factors responsible for it not being able to deal with the financial crisis.

“Our (Caribbean) inability to deal with this crisis, I am not speaking about every country, but we have for a long time in this region been less productive. If you look at the productivity in our overall economy it has been declining steeply,” Jagdeo said

He believes poor production, along with high debt overhangs, has caused many countries to face hardship due to the global economic crisis.

He noted too that Caribbean countries have borrowed so much from the lending agencies that every year the servicing of their external debts has been racking up and is now getting to a stage where some countries are using too much for this purpose.

Jamaica, he says, is one such country, which at one point has been using over 100 percent of its gross domestic product (GDP) to service external debts.

Jagdeo noted that such a situation spells trouble for the regional economy.

“How can you build a viable medium term strategy with a debt overhang in the region that is about 90 percent of GDP and includes commercial debts at high interest rates?” the president asked, adding, “It's almost impossible, sucks the life out of the economy.”

Jagdeo, who also chairs the CARICOM economic task force, noted that it is now time to create a new model, which he says will place heavy emphasis on debt relief for Caribbean countries.

He noted that Guyana was no exception from this high debt overhang as at one stage this country was using over 90 percent of its GDP for this purpose.

This has changed and the country is now using just about 4 percent of its GDP for servicing of external debts.

December 4, 2009