Local economist Arthie Martin said the recent report from the International Monetary Fund on the Dominican economy has indicated to a certain extent that its programme in the country has failed.
According to the IMF report, Real Gross Domestic Product is estimated to have declined by only 0.3 percent in 2009.
It said also stated that the total tourism receipts contracted by 16 percent during 2009.
“The economy is now more vulnerable, even more vulnerable than it was 2000…we followed their instructions blindly because our policy makers did not have a plan of their own and the net result is that we now have an economy that’s flat on its back,’ he said.
According to Martin, “there are no jobs, growth in the import sector is on a high, Dominicans have less income and they can’t save. In fact, people are consuming their savings in order to live,” he said.
Meantime Martin said he was not at all surprised by the recent report.
“The latest adjustment programme under the IMF did not pay attention to growing the economy. I had warned about that because it could only lead to a much more vulnerable situation. In the final analysis, the only way that you can come out of a financial and fiscal crisis is that you have to produce,” he said.
He said Dominica has “simply, religiously and blindly” followed the instructions of the IMF “which has never worked anywhere else in the world”.
Martin said government never stopped to pay attention to what was going on in the country.
“Agriculture was declining, tourism was becoming more fragile, manufacturing was declining, the new services of technology had not yet taken off…we had become much more dependent upon more borrowing, more debt, even while we were going through the fiscal adjustment,” he said.
@IMF Is Martin Fault? Never: u hit the nail on the head i hope some of those who wrote meaningless comments atleast took the time off to read it. Thanks alot
When did Athie Martin become an economist?
graduated from Harvard in 1968 with first class honors in international economics, honored by Cambridge for long and outstanding work in building and directing the economies of the western hemisphere. oh, he just forgot the global economic crises that’s going on.
what a shame!!!!!!
Who graduated from Harvard?? Lol
athie graduated from harvard? okay……..
Athie has a point but you can’t blame Government, all countries are going through economic down turn and it’s up to DOMINICANS AND NOT GOVERNMENT TO PLANT MORE TO PROVIDE FOOD FOR THEMSELVES. YOUNG PEOPLE DONT WANT TO PLANT NOW.
Athie needs to get the water project on and also government need to invest in the energy sector, that’s where we have to head right now, energy is in the demand right now.
“local economist”, Arthie? Hardly. Pure politics!
I am hardly a labor partyist but:
Isn’t he one of those wronged by the gov’t and want to take the gov’t down na? I think he studied agriculture but not sure if he finished. What economist? More like voodoo economics from an environmentalist. He should just stick to environmental activism for the good of all of us.
Economies all over are hurting, from 2009 to today. IMF gets their money but at least Dominica is trying to balance its books. What’s new about any country not doing well in 2009 – 2010?
Greece didn’t undergo an IMF restructuring. Arthie does better when he sticks to saving the whales.
On May 10, 2010, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Dominica.1
Background
The global downturn has adversely affected the Dominican economy through lower tourism arrivals, foreign direct investment inflows and remittances, although less severely than other Eastern Caribbean Currency Union (ECCU) economies. Real Gross Domestic Product is estimated to have declined by only 0.3 percent in 2009. Total tourism receipts contracted by 16 percent during 2009. This decline reflected falling stayover arrivals after the Reunion 2008 event and greater discounting in 2009 partly offset by growth in cruise arrivals. FDI and remittances inflows dropped by 51 percent and 18 percent respectively in 2009.
In response to the global slowdown, the government decided to maintain capital spending in 2009 at the high post-hurricane level in 2008. Despite high capital spending, the overall fiscal position remained in surplus during FY 2008/09 (July–June) and so far in FY 2009/10. This reflects primarily continuing strong performance of the VAT introduced in 2006.The strong performance also helped finance a scaling up of social assistance to protect the poor from the effects of the 2008 spike in food and fuel prices and the global economic slowdown.
Consumer price inflation has picked up recently. The Consumer Price Index (CPI) increased by 4.4 percent (yoy) through February 2010, as increases in world food and fuel prices were passed through. This reflected a pick up in the later part of the year. On a period average basis, inflation was close to zero.
The external current account deficit decreased to 28 percent of GDP in 2009. In 2008, the deficit had widened to 32 percent of GDP due to higher reconstruction-related and fuel imports, which were mostly financed by external grants and FDI. Lower FDI-related and fuel imports in 2009 are estimated to have more than offset lower tourism receipts and remittances. To mitigate the adverse impact of the global downturn on the balance of payments, the Executive Board on July 10, 2009 approved a disbursement of SDR 3.28 million (about US$5.1 million) under the Rapid-Access Component of the Exogenous Shocks Facility.
Monetary aggregates show steady growth and the banking system has remained resilient. In the 12 months to December 2009, banking sector credit to the private sector grew by 6.9 percent and broad money by 10 percent. Prudential indicators suggest that banks are liquid and well capitalized, with declining nonperforming loans. The average nonperforming loans ratio and capital-based soundness indicators remain above prudential norms, although returns on assets have declined markedly in recent years.
The collapse of the Trinidad and Tobago-based CL Financial Group has exposed regional weaknesses in the regulation of nonbanks. The eight KPMG judicial managers appointed in each ECCU jurisdiction for the British American Insurance Company (BAICO) issued a joint report in October 2009 finding that the company is insolvent and illiquid. The ECCU member authorities are making progress in the creation of a new company to take over BAICO’s operations in the region.
The near to medium-term economic outlook is modestly positive. With the recovery of the global economy and expected improvements in international trade and tourism activities, the Dominican economy is expected to grow by 1½ percent in 2010. The downside risks are related to a potentially very slow recovery in advanced economies, which would adversely affect tourism activity. In addition, a rebalancing of global demand could imply weaker demand for tourism services from Dominica’s main source markets.
Executive Board Assessment
The Executive Directors noted that the Dominican economy has been more resilient to the global crisis than other ECCU countries and that its near- to medium-term outlook is positive. Directors welcomed the authorities’ Growth and Social Protection Strategy, which is appropriately aimed at guiding the economy toward fostering growth and reducing poverty while lowering public debt. Downside risks relate to a slower global recovery, possibly implying weaker demand for tourism.
Directors commended the authorities’ prudent fiscal policy stance in recent years, which has placed public debt on a declining path and allowed the government to respond to the global downturn by keeping capital spending in 2009 at high levels. They encouraged the authorities to reduce the debt-to-GDP ratio further, thus maintaining the ability to respond to external shocks.
Most Directors expressed concern that the large externally financed projects could significantly slow the pace of decline in the debt-to-GDP ratio. While the likely departure from the fiscal anchor of a primary surplus of 3 percent of GDP implied by a loan for education and infrastructure projects is expected to be temporary, it risks undermining fiscal performance in the coming years. Directors encouraged the authorities to return rapidly to the fiscal anchor that has served the economy well. The expenditure that the authorities have contemplated on a large new tourism project carries considerable commercial risks. Directors recommended conducting an objective and independent assessment of the project, obtaining financing on concessional terms where feasible and— if the project proceeds—exploring partnerships with the private sector. A few Directors were of the view that some flexibility in borrowing and a temporary deviation from the declining debt trend with prudent policies should not be ruled out.
Directors stressed the importance of strengthening the supervision of the financial sector, including on-site examination of the insurance companies and credit unions. They welcomed the establishment of a single regulatory unit for the nonbank sector. Directors also welcomed the authorities’ regional approach to address the collapse of the Trinidad and Tobago-based CL Financial Group and recommended that the resolution strategy should avoid systemic spillovers while minimizing fiscal costs.
Directors recognized the recent considerable progress with structural reforms and noted that sustained efforts, geared toward improving the business climate, will be critical for achieving the growth target.
In Agreement I applaud you for taking time to have a reasonable discussion not one of derision and insult. It is sad that our people can’t have an intellectual conversation without resorting to insult and personal attacks. Back to the our discussion- I am not disagreeing with you on the point that we need to be more independent and self sufficient. I also notice that you are in agreement with me on the issue that the government is not doing anything substantial to allow people to become more enterprising. You suggest for example that the farmers could form some type of corporation but the vital element is dearth- Where is the market. The securing of the market is the government’s responsibility- This has not been done by the present administration.
The government must work towards empowering the people Mamo had some degree of success doing that. The leadership has shown us how to remain reliant on hand outs. People were fooled into believing that Pawen Chavez would be there always and that a red clinic would be perpetual, more little pink houses would help creat another cite Soleil.
A leader who does not seek to empower those who he or she leads is self righteous, a dictator and narcissistic
Athie got a $25M project to bottle water…..what has he done with it????
I too appreciate the civil, intellectual conversation.
However I think we disagree on a philosophical level with regards to the government’s role in market factors and forces. I do not think that the government should be responsible for “securing” a market for farmers. By “securing” I mean the suppliers or their agents should be responsible for looking for and engaging the consumers and the market. I do agree though, that the government should play a limited role in protecting those suppliers.
I too think that the government needs to do more to empower individuals. We have gotten too used to living off of hand-outs. But that’s a whole other discussion…
GO AHEAD MAKE MY DAY PPLS WITH ALLYOU RIDICULOUS COMMENTS. I DID NOT KNOW MR MARTIN WAS AN ECONOMIST. CAN SOME ONE PLEASE EDUCATE ME ON THAT ONE?
No kidding……
Nothing the IMF does is a success story for the people of a particular country. It isn’t meant to be.
But it is always a success for the IMF. They get their money or property one way or another.
They buy up other countries under the guise of “investing” in them and they buy their resources.
Athies water project is a front for the buying of DA’s water by the U.N. and the IMF is attached to it.
So are the “world heritage sites.” Wake up people.
When they take down or attempt to take down the larger more powerful countries they will dragging every other lesser country behind them. Every country will be affected. So shore up now. Start being self sufficient. Put agriculture first and stop worrying about tourism.
I agree with Athie. The IMF has not helped. Dominica’s economy is in shambles. High unemployment. Increased cost of living. Tourism is down. Agriculture is dead. The question is what can be done to improve the situation
Oh please. What has changed? We will always have our naysayers — the usual suspects.
Will DNO do its readers a favour and having quoted the “local economist”, now publish at least the first 2 1/4 pages of that IMF report? This will give readers an opportunity to read first hand what the IMF Board has to say. They can make up their own minds.
In agreement I acknowledge and respect your response however the government is the first line of facilitation for the country. The government must create the means and ways for people to become productive. The government must insure a market be it local or external for the farmers- Has this government done that ? Obviously not..
In defense of the present government you have noted that agriculture had been on a downward spiral from the 10 years and I could not be more supportive of you. You have just supported my argument- The DLP has not done anything substantial to support or develop the agricultural industry.
I respect your response as well. But you too add credence to my point.
You’re of the belief that the government is the first line of facilitation, and while you are right, that still does not negate the responsibility of private individuals.
People complain that the government begs China and Venezuela and only vies for hand-outs, but that is true for Dominicans on a whole. It is true on an individual level. Too many times do I hear young AND old people complaining that there are no jobs. But so few people take the initiate to develop business ideas and the like. Now the challenge of getting adequate credit is a whole other issue… But the initiative (and a solid, valid, well thought out one at that!) is lacking. And that, more than anything else, is my point.
So the bottom line is forget about the government for one second… and develop ideas that can stand the up against the scrutiny of critics and nay-sayers.
Take for example our farming situation. We are conducting farming practices in a very inefficient manner. It displays poor allocation of land and the other factors of production. In this day and age there is no way farmers can live farming on one plot pieces of land as so many do. The only viable solution is for farmers to amalgamate and so the costs of production would be shared over fewer but larger farms. Yes, that would mean that some farmers would go out of business (very unfortunate) but that is the only way.
Just one example… there are many others…
government should not have anything to do with market forces
Readers please read the IMF report yourselves and understand what is written. Athie” hatred is trying to twist things around. The report is indicating that the Government has managed creditably in light of the global economic meltdown.
Athie indicated that Dominicans cannot and do not save in these times. Well read this week’s edition of the Sun News paper. The article about the Roseau Credit Union indicated that members savings increased by over 10 million dollars in 2009. to be exact $10,797,211. Where does that savings come from Athie? you must answer that. Savings Deposits at the NBD also increased considerable Athie must indicate where he got his facts.
the entire world going through extreme hard times, does mr martin what the ECCB to print money and risk increase inflation? Or does he want to allow mining companies to dig Dominica up to export to China like Australia, or maybe we should allow massive deforestation like Brazil to export Soy Beans.
Instead of blaming the IMF he should focus on how self sufficiency in agriculture can be materialized, the fact is that inputs to agriculture (fertilizer) is a major cost, when it comes to other industries in Dominica energy is a major cost, and how are we going to solve those problems
Dominicans will never see the light. Athie warns of preserving our environment. he is a jack to say so. athie talks f conserving our natural resources, he is a fool to say so. athie talks of developing the Whale Watching industry, he is mad. Agriculture in trouble, Athie reminds us to put more resources, finance and otherwise into that industry so that production of crops could increase as well as the income of farmers, you demonize the man. Gardakhan initially without a license from Planning, orders and bring in equipment, begins building asphalt plant against the wishes and concerns of the people of Layou, then he is given the permission from the same Planning Division, Dominicans have not come to the support of their poor fellowmen and women crying for help against the BIG MONEY MAN, but wish that Athie should shut his mouth as a born Dominican. Geothermal exploration given to a foreign company with the manager of NBD being the Chairman of that company, Dominicans , like you all have said nothing. Wiltshire and others WEF worked for years, came up with the innovative idea and raised funds for the Waitikubuli National Trail. The project was given to a french company while WEF and Wiltshire have been virtually cast aside. Is so we come? Our Sovereign is at stake.
Dominicans your navel string bury here, but you have to struggle hard to be Dominican. Freedom of speech will be seriously dealt a major blow if people are not allowed to express their opinions. There is a fear of discussing the real issues that pertain to our development. instead Dominicans recently behaving like Beggars are no Choosers, have come to accept begging and mendicant behaviour as a recipe for improving their lives. It just will not work. Stop fooling yourselves. Now internet is at our doorsteps. Make a google search and read about the destruction of economies and the increase in poverty in Asia, Africa, the Caribbean, Europe, the Middle East, wherever the IMF has prescribed structural Adjustment programmes. How many times have Dominica borrowed from the IMF? What has those funds been used to do? Why is agriculture in that sad state. Our markets are opened for all kinds of goods from outside, yet we cannot produce to ship[ anything substantial to the outside markets. All now, in the 21st century, Dominica imports vegetables, carrots, cabbage, tomatoes, just name it from Miami. In Dominica our farmers are reeling and going through hell. Farmers are living their farms in droves, but we are making the farmers in the US richer by sending monies away to them for crops that we could produce here. What is needed is a proper plan to boost our agriculture and improve our FOOD SECURITY. Dominicans are hard working but farmers are not encouraged and mobilised to undertake or continue in that important area of work and development. POVERTY IS ON THE INCREASE, and there are no signs that things will be better. Unemployment is rising with no signs of people, the youth gaining any meaningful work here. They are flying away to ‘GREENER PASTURES’ to make a living. Do we show love and respect to our fellowmen. Do we love our hard working farmers who do what they do to put food on our tables? Which IMF programme has helped boost our economy and emphasis increased production and less dependence on foreign goods that are not as healthy as what we grow here? We prefer to die in ignorance instead of reading more, trying to listen to good advise and changing negative attitudes towards those who wish Dominica well.
well said i could’ent have say it better tell them i like u man u care about dominica and i love that some of those people love skero and hate dominica
I agreed with your comment.
We don’t have to suck anybody butt whether you support them or not.
Wrong is wrong . Right is right . SPELL IT OUT!
Political ho.Right time 2B heard before the by election.This guy is a total failure when it comes to pushing the country forward.
Sometimes dominicans can be so narrow minded in their thinking. What Athie is reporting is fact, not fiction or to score political points; the election is over. We need to listen objectively and see the facts of such a fragile economy.Athie has been there for dominica throughout, during the hard times in the seventies and beyond.he could make a good living elsewhere, but he loves his country and wants to make it better; i know him personally as a friend of the family since the seventies.
He can help with the water project…Arthie what happened to the water project?
First things first… when did Mr. Martin become an “economist”???
I think we use these terms loosely. Around the world an “economist” is usually a PhD laureate, not an “observer of economic conditions and phenomena”. Granted, I may be mistaken; maybe Mr. Martin is actually Arthie Martin PhD….
Secondly, I usually cringe when I hear politicians blame the Great Recession and the recent financial crisis for our lack-luster economy. But in this instance, when reviewing the initial forecast and suggestions made by the IMF, I am sure no provision was made for the meltdown of the world’s Financial system and the trickl-down effects that directly impacted our ecomony. There was no way to tell what was coming. So now that our economy did not live up to their predictions and our expectations it should be NO surprise.
I hate making excuses but sometimes they are warranted.
Still the IMF does not have a A+ track record with helping small developing nations and their advice and suggestions should be taken with a pinch of salt.
Nice try Mr. Martin, but please focus on the $20 million water project in Marigot.
It is clear Athie had to shelve the 25 million water project as he forsaw our economic situation today.
Athie u are a prophet man.
U are correct alot of Dominicans don’t have a savings.
Athie what about the water project??
Staying Tuned are you kidding me? Why are you attacking Arthie on an issue that is absolutely important to all D/cans. subterfuge does not help us at this point. Why not tackle the problem from it’s root. We all know that the problem is really a bad government- a government without a plan. A Prime Minister and cabinet who leave on hand downs from Venezuela or China . While the leaches getting reach the economy is under performing and a bunch of idiots are chanting “ Good Things are happening”- Show us the good things.
The decline in agriculture , the demise of local businesses is not Arthie’s handy work. Deal with the reality of the situation- Be honest to yourself.Only then the politicians will respect you.
Let us not make those excuses –let us not associate our failing economy with that of other regions because the PM told us 6 months ago that D/ca was Kicking A$$$$$ so much so we were appropriating funds to Antigua and Angulla. Maybe the PM should tell us what changed between December 18 and now.
Let us not forget ( Memwi Pool) that last week the PM said that the economy was doing fine . Show me the moneyyyyy!!!!!!!!!
I agree with you; let us tackle the problem at it’s root.
The problem is many-fold. One definite problem is that WE as a people (Dominicans) are too used to relying on the government to do this and do that on our behalf. We need more out-of-the-box thinkers to get to work OUTSIDE of government.
Yes agriculture is and was on a decline. But it has been that way for more than 10 years now. Is it the government’s job to prop-up or subsidize or protect farmers forever?? Or should farmers come together and advance their causes as a unit or co-operative. Is it asking too much for farmers to learn more about their craft and prevailing practices and/or take examples from other countries where farming was once in decline but is now thriving?
This is just one example; there are many more. Yes the government plays a huge part, but let us not count ourselves and out contribution out completely.
The report commented on by DNO recently is for the 2008-2009 period. It is not for the period after December 18, and yes, we did fair better than most other countries in the region! I agree we’re not in the land of milk and honey but Rome was not built in a day. The decline in agriculture and others started before this present administration. I think then they would deserve some time to sort of the problems we may be facing now, and i think sometimes we’re up to our necks in them.
The GLOBAL financial crisis has affected countries the world over. What the report also says is that Dominica, through its strategic relationships, has managed to do better than most of the countries in the region. There isn’t anything we in Dominica could have done to avert the demise in the world economy. However, political decisions have minimized the impact on us in the Nature Isle.
Although people like Mr. Martin are very knowledgeable I have difficulty believing the things they say sometimes, because they can be so politically biased.
Putting politics aside, i am beginning to understand where this man is coming from. His view makes sense in this case.
Economist are a vital part in any economy, however, some of the statistics are often prompted by the lack of or the information that is percieved, in lieu of the report initiated by the economist many of the large economies became trapped my the mismangement of resources due to iregulation, that impacted smaller economies as a result, the very currency that’s in circulation in Dominica is not just the Dominican currrecy but a shared trading medium between serveral countries which is governed by other banking regulators within the region, therefore all the economies within the region is a subject of growth challenges, the question that will have asked is whether Dominicans as a whole can become creative inovators in a depressed economy.
Arthie, what about the $25Million project that was supposed to employ 16 people in the Marigot area and generate real revenues.
Arhie when are you going to stop this political game. I can guarantee that their were other investors that would have started doing something already.
When foreigners come and do it all you complain.
DNO please ask Arthie for us, what about the water project? PLEASE
you seeing and hearing the level of allu stupidity?
allu refuse to see the point the man making…..allu attacking the messenger by asking about water project…..like as if that one water project would have made everything different….
that is why allu will stay and Calay yeh yeh in Dominica….those that doh reach that stage yet….its coming…just carry on with the same mentality…
Peace out!
thank u for seeing the light
You are in Dominica under the same economy. Don’t hink you will be speared calaying yeh yeh
hahahaha….HMMMMMM…..
Athie what about the water project?