Sir K Dwight Venner
Governor, Eastern Caribbean Central Bank

Good Evening Ladies and Gentlemen.

I address you at the beginning of the New Year on the economic circumstances,
performance and prospects of the Eastern Caribbean Currency Union, as we move forward in the stability and adjustment phase of our response to the economic and financial challenges that we continue to face.

The recent performance of our economies has to be seen against the background of two factors:
1. The unprecedented global financial and economic crisis which began in 2007; and
2. The structure of our own economies.

This global crisis has been the worst in the last eight decades since the Great
Depression of 1929 – 1933. It has had a global impact, starting as it did, in the
United States of America (USA), which is also our main trading partner and source
of investment, tourist arrivals and remittances.

To read the full transcript of the Governor’s presentation please visit this link.

2010EconomicReview
A video of the presentation can also be view here: http://www.eccb-centralbank.org/media/videos/webmovie1.wmv

One Response to “The 2010 Eastern Caribbean Currency Union Economic Review”

1. CaribbeanMan
   January 28th, 2011 @ 12:52 am

   Having been present for the Governor’s address, read and indeed listened to it a second time, I am left wondering why there appears to be so much smoke and mirrors. Why is there so much technical double-talk or mumbo jumbo?

   Could it be that speaking plainly and frankly would blow a hole in the myth that the saviour of the Caribbean in the form of tourism isn’t going to ride in from the west or any other direction to save us?

   Many of our Caribbean economies have to some extent diversified from dependence on single crop agricultural economies based on, Banana’s, Cotton, Nutmeg or Sugar. To economies which stand solely on the frail leg of Tourism – a fickle and wholly discretionary service – propped up by the crutch of remittances (money or goods sent by family and friends overseas), a policy which to me seems ludicrous.

   The Governor spoke with concern about the high levels of US unemployment, but it was almost in passing. Perhaps it was because it would spook the horses or embarrass the political leaders who have been propagating the Anansi story that “tourism is working”.

   However, it’s clear that with unprecedented levels of unemployment in the US and swingeing cuts in the public service in the UK, that both tourism and remittances have already been seriously affected and are likely to continue to be adversely affected, but here again there was hardly any mention of this.

   I thought the lady in Anguilla made the point very well, that for years Anguilla had been held up as the blue print that other Caribbean islands should follow as they had a high value tourism product. Her point, that with the decline in the global economy and the increase in US unemployment, their tourism industry and the economy that it underpinned had stalled seemed to go unanswered.

   The Governor responded that other industries such as Agriculture, Financial Services and IT could form linkages to tourism. I would like to think that I am not the only one wondering that if the tourists are not coming what is there to link to?

   The Governor spoke of tourism having a comparative advantage. However, it is clear that whatever advantage Caribbean tourism is perceived to have, it is under threat if it hasn’t already been lost in Anguilla and many of our islands as we all chase the same tourism dollar, Euro, Pound, Yen or even the Russian Rouble! As each island has the same sun, sea and sand as do Cancun and Miami, I am struggling to find the comparative advantage.

   From my vantage point, the advantage tourism enjoys, are the excessive subsidies and attention our governments give it at the expense of potential income earners, such as Financial Services, Business Process Outsourcing and IT. It appears that we like the foolish builder have built our house – our economies – on sand.

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