Jagdeo says Caribbean is on the verge of bankruptcy

Jagdeo. Photo credit: gabpc.org

GEORGETOWN, Guyana, CMC – President says the Caribbean is on the verge of bankruptcy as many countries were spending more on servicing external debt and has reiterated his call for urgent debt relief by the international financial institutions (IFI).

Jagdeo, who heads a special Caribbean Community (CARICOM) task force to assess the financial crisis in the region, told a media conference that the debt situation is worsening.

“The region is heading towards bankruptcy if countries could be declared bankrupt, many of the countries simply cannot pay their way and they can’t meet recurring cost and pay their debts,” the Guyana head of state warned, adding “unless there is radical restructuring or increase sources of revenue, the situation will get worst”.

Jagdeo said that poor productivity and the heavy debt were the main factors contributing to the financial crisis in the region, adding that the situation as further exacerbated by the global financial crisis, the reduction in exports, remittances and tourist arrivals.

“We hope with the abatement of the crisis, not that we are out of the  woods as yet and it is still very tenuous, but this may improve the macro-economic fundamentals of these countries, but they simply  can’t sustain their large quantity of debts.” he told reporters on Friday.

Jagdeo said during the CARICOM heads meeting with top officials of the World Bank, the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB) in Dominica earlier this month, the region took the opportunity to highlight its case.

World Bank president Robert Zoellick said his organization was willing to sending experts to the various Caribbean countries to assess their debt management strategies.

But Jagdeo told reporters there is a huge challenge in crafting a regional debt strategy since individual countries have unique debt problems and this must be address on a case by case basis.

“Many countries will not have a good future unless their debt problems are tackled,” he said, noting that Guyana had faced similar problems in the past.

“We had that when the debt burden use to suck up over 94 per cent of our revenue, it sucked the life out of our economy, and we had tough period of dealing with that.” Jagdeo added.

Earlier this week, a senior St Lucia government official said that high debt levels had become a feature of most countries in the region.

“If you look right across the region the story is essentially the same. Revenues have declined substantially, while expenditure has remained pretty high, particularly given the needs of the government to provide much needed social safety net programmes,” said Director of Finance Isaac Anthony told a Caribbean Development Bank (CDB)/Institutional Investor Roundtable discussion.

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10 Comments

  1. only
    March 30, 2010

    Bankrupting countries is what the IMF and World Bank under Mr. Zoellick specialize in. He has the perfect background from Goldman-Sachs.
    Lets see, Iceland, Greece, working on U.S. and if it fails, down come all the countries tied to it and the dollar.
    Then tthese bankers come around acting as saviors.
    Stay out of their game. Just say N
    Just know that Mr. Zoellick was here several weeks ago for a purpose. These people have an agenda of owning the world.
    Ever heard of the U.N.? They are its bank.

  2. Debt- burdened
    March 30, 2010

    What hypocrisy. World Bank, IMF, IDB officials were present at the recent CARICOM Heads of Govt meeting in Dominica. Suggested to the leaders that the World Bank/IMF will dispatch teams across the Caribbean to assess their debt management problems. Manufacturing is low down, agriculture in shambles, tourism revenues decreased, crime and drugs increase. Begging has become a policy, instead of hard work, innovation and vision,

    Do we learn anything at all from history? Do we try to understand the world in which we live? Many reports have documented that in the African, Caribbean and Pacific countries, The IMF and World Bank have worsened the situation because of their lending policies. Added to that bad governance, mismanagement, bad politics, greed, corruption, and lack of integrity among leaders and others in public and private sectors have done much harm also. The relationships Caribbean Gov’t have had over the years with those institutions have not made the standard of living better.

    The international Financial System is so designed that the Caribbean will forever be indebted to World Bank/IMF. Free Trade a la capitalist order will further open up our markets to cheap goods. The approach and practice throughout excludes people from taking meaningful part in their countries development. Self-sufficiency through agriculture development, creation of our own wealth using our natural resources are on the back-burner. Dependency syndrome have crept in. Working for the common good is not the goal. The rich get richer while the poverty levels grow.

    The solution being touted is to go to those institutions for loans to bail out Caribbean economies. But history will reveal that the same World Bank/IMF have been partly responsible for the countries being in so much debt with hardly anything to show for the money borrowed to boost economies of those Caribbean countries. .

  3. Cesare Bonventre
    March 30, 2010

    First: The finance crisis is NOT global!

    The only ones affected are those countries that allow an international cartel of private bankers to print (and regulate) their money, (out of thin air).

    For example, Norway, who does not let the international cartel of private bankers print, manipulate nor lend money; and, are doing extraordinarily well – Best in Europe! That is why my retirement monies are in Norwegian Kroners.

    Other successful economies without any troubles include BRIC nations who don’t even use the US dollar to trade amongst themselves anymore. And the BRIC nations GDP is skyrocketing despite the decline in (fake) US dollars.

    Most European & American state aid is interlocked into the International Bank of Settlements, which is tied to World Bank, which is tied into the IMF, which is like all things: Tied into Goldman Sachs!

    AIG is run by Edley of Goldman Sachs!

    All roads lead to: Goldman Sachs!

    Most European & American lives are dictated to by a bunch of arbitrage wielding sycophants & sociopathic criminals who profit by destroying the system!

    Keep your eyes on the Greeks and French whose workers are poised to throw-off the shackles of their international banking masters, (refer to Moody’s new “country revolution rating”)

    There are several new alternatives to the IMF-World Bank now! Why deal with the IMF?

    The IMF (World Bank) admits it is bankrupt! So it has little or no real resources to act as lender very soon – In fact, even the IMF is scrambling to replace the US Dollar as the world currency because the Chinese are about to unfold their new alternative to the IMF! One CURRENT alternative permitted by the IMF is alternative currency swaps between Asian countries without the US Dollar, (google: Chiang Mai Initiative)

    http://www.larouchepub.com/other/2001/2847imf_bankrpt.html

    Joe Stiglitz is a leading critic of international development organizations — especially the International Monetary Fund, (IMF & World Bank). And yet, in his book, Globalization and its Discontents, he points to one country that got it right — Botswana. How did it succeed? By ignoring advice from Washington-based institutions, as Mr. Stiglitz explains. He also speaks how Botswana beat the criminal Diamond monopoly De Beers:

    http://www.theglobalist.com/storyid.aspx?storyid=2507

    Here is news on the developing Asian alternative to the IMF & World Bank:

    http://www.globaleconomicgovernance.org/blog/2009/05/watch-out-imf-and-watch-out-washington-dc/

    60 Questions about the World Bank debt scam:

    http://www.cadtm.org/60-Questions-on-the-IMF-World-Bank

    Actually, there are several excellent books on the World Bank debt scam here:

    http://vakindia.org/shop-online-page4.html

    How the World Bank caused America & European financial bankruptcy (free download):

    http://vakindia.org/pdf/IE.pdf

    How Malaysia dumped the World Bank (IMF) & thereby prevented economic and social chaos:

    http://www.twnside.org.sg/title2/gtrends1.htm

    Another interesting book on the topic – World Bank & IMF, Fifty Years is Enough:

    http://www.alternativeradio.org/programs/KEND001.shtml

    In summary, the IMF and World Bank will only extend loans if countries agree to accept ‘structural adjustment programmes’ (SAPs). SAPs are forced down the throats of the people of the former colonial world. To pay off the loans, the IMF and World Bank demand governments raise money by selling off public assets and companies (privatization) and cutting state expenditure on social services like health care, education, and pensions. SAPs require countries de-regulate and “open up” their economies by cutting subsidies to local industries and creating bogus trade barriers and tariffs. Countries must open up their economies to the multinationals (usually based in Western countries), remove restrictions on foreign investments, and allow corporation’s access to the workers and natural resources of the country at bargain basement prices.

    The vast majority of the profits made by the multinationals are taken out of the country and brought home (repatriated) to the West. SAPs encourage export-oriented growth (selling cheap raw materials or commodities on the world market, like cash crops, garments, or computer chips) to generate hard currency. All in all, the IMF and World Bank SAPs turn countries into loan repayment machines, generating easy profits for the world’s biggest companies and banks. IMF policies also both directly and indirectly impact on workers in, for example, Europe and the US. Because they are partially funded with public money, the IMF and World Bank redistribute wealth from working people in the West (through their taxes) and funnel it to programmes which benefit the multinationals.

    The effects of IMF/World Bank programmes are to lower wages and working conditions worldwide, which exerts a downward pressure on workers’ living standards in the industrialised countries as well.

    The IMF and World Bank loans have created a huge debt trap. This overwhelming debt has led to the poorest countries in the world allocating enormous portions of their national incomes towards paying interest. Debt is one of the most important weapons with which the big capitalist powers dominate poor countries. It is used as a means of blackmailing the poorest countries and tightening the screw on the vast majority of the people in Africa, Asia and Latin America.

    However, due to the collapse of the US Dollar & all Central Bank controlled European nations, many alternatives to the World Bank have opened up! Dominica will be wise to use an alternative to the World Bank – Besides; even the World Bank admits it & the US Dollar are bankrupt!

  4. March 30, 2010

    Tell em Jagdeo tell em the truth, the OECS is debt ridden.
    Abolish the ECCB. And let every island manage their currency individually.

    • Lucian
      March 30, 2010

      OECS islands are far better than Guyana. You don’t see all of them Guyanese covering Antigua,St. Lucia and Barbados.

      • Prophet2
        March 31, 2010

        The OECS will be a force to reckon with, so keep on dreaming Hugo, we are small but united we can perform great feats, so long live the OECS.
        Jamaica, Guyana and Haiti are all failed states and their past and present governments had a lot to do with it.

  5. Gary
    March 30, 2010

    The question I would like to ask Mr Jagdeo who’s interest does he have. Why is he proposing to bring the CMC members to the IMF and World Bank as a savior to reliving and solving their debt, it clearly shows who’s interest Mr Jagedo is serving, and it is not the CMC.

    The situation Mr Jagdeo outlined facing regional Governments cannot be denied, the Governments are in debt and struggling and need a solution, the big question is what kind of solution is needed, I do not proclaim to have all the answers to the solution, especially a problem of this magnitude but what i can say for certain, coming out of debt needs innovation, discipline and sacrifice, and it has to come from the Governments and the people working hand in hand. What Mr Jagdeo is seeking to do is enslave people in CMC member States to the International Bankers.

  6. Cassandra
    March 30, 2010

    If the quality of the sugar we are buying from Gyana is representative of their industrial output I am not surpised the country’s economy is in the “doodoo”.

  7. tell me
    March 30, 2010

    Why is it that Jagdeo is seeing the imminent but our PM and his Goverment isn’t??
    We all know that we tread a thin thread with the venezuelan handouts,for if that tap is closed we will
    die of thirst.

    • deception
      March 30, 2010

      Ask yourself:

      Are not those who do not learn from history are doomed to repeat the mistakes of the past?

      Was this not how Haiti was put into the trap by France that forced them to buy their freedom.

      Well who is the Chairman of CARICOM? :-)

      A French/EU citizen who is allowed to hold a Dominica/Caricom passport in order to be able to hold the post as PM EC cental bank chairman and Caricom chairman….

      Mastery of strategy

      LOL….
      LLLOOOLLLL :-(@)

      click on this link to see how a picture tells a thousand words at the ??Joyful?? swearing in ceremony of the PM.

      http://dominicanewsonline.com/wp-content/uploads/2009/12/oath2.jpg

      facial expressions (affect) tell the true story of the mood that the person is in.
      This fact cannot be hidden except if that person is schitzophrenic….

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