By Stanford Conway
The Monetary Council of the Eastern Caribbean Central Bank (ECCB) intimated that the ICC CWC 2007 would signal the start of a new era in the economic development of the region resulting from the benefits that could be derived from hosting the event.
The pronouncement of CWC 2007 potential benefits was among the many issues reviewed and decisions reached at the conclusion of the 55th Meeting of the Monetary Council held last week Friday at the Headquarters of the ECCB under the chairmanship of St. Kitts and Nevis Prime Minister Dr. Denzil Douglas.
A communiqué coming out of the meeting stated the Council recognised that in order for the long-term benefits of the CWC 2007 to be realised, strategic economic management would be required.”Member countries therefore need to have in place the appropriate policy making framework geared at achieving specified overall macro-economic objectives,” the communiqué read.
It also stated that that the Council noted a study was being undertaken by the ECCB to assess the impact of hosting the CWC 2007 on the Eastern Caribbean Currency Union’s (ECCU) economies and agreed to lend full support to the exercise.
In addressing fiscal support for stability of the currency, it was decided that member countries of the ECCU should set annual targets for reaching the agreed fiscal benchmarks, which should be declared and published by the Monetary Council.
Noting the importance of money and capital market development to the transformation of the economies and facilitation of growth, the Council was apprised of recent developments and the listing of firms on the Eastern Caribbean Securities Exchange (ECSE) not organic to the Organisation of Eastern Caribbean States (OECS).
From this backdrop, Council members recommitted themselves to pursue, in their respective countries, the expeditious enactment of legislative amendments to the Securities Act to enable the Exchange to operate in the wider CARICOM.
The Council also recognised the increased efficiency within the Regional Government Securities Market, which it noted could be realised by member governments through participation in the market as well as the opportunities for wider investor participation.
In view of the economic performance, the Chairman declared a 0.9 percent growth for the sub-region; five percent in 2005 and 4.1 percent in 2004.
He also noted the expansion was underpinned by a sharp increase in construction activity, estimated at 21 percent compared with 5.3 percent in 2004, which involved substantial expenditure by both the public and private sectors.
“The main activities were associated with preparations for Cricket World Cup 2007, substantial hotel development in a number of countries and reconstruction in Grenada in the aftermath of Hurricane Ivan in September 2004,” said the Chairman.
He added that while noting the current expansion in economic activity in the ECCU, the Council was cognisant of the risks posed by development in the global economy and also the high oil prices.
Given the current economic circumstances, Dr. Douglas said the Council decided to maintain the 3.0 percent regulated minimum interest rate on saving deposits and 6.5 percent discount rate at the Central Bank.
He also pointed out that during the Council’s deliberation on the statistical development in member states, a number of recommendations was made and agreed upon to raise the quality.
“Council noted the improvements, which were required to raise the quality of statistics in the member countries and agreed to recommend to member governments the appointment of Statistical Advisory Commissions within a reasonable timeframe; the recruitment of the requisite human resource to enhance the statistical capacity in the statistical offices; and the draft Model Statistics Act for review, with the intention of addressing the independence of the statistical offices.”
The Council also deliberated on a policy framework for decision-making in the ECCU and recognised that the importance to growth and development of a strategic approach to policy-making involved the setting of clear objectives for the economic transformation of countries by the year 2010, and the establishment of institutional and policy-making arrangements at the regional and country levels to achieve those objectives by the recommended date.
The Council further agreed to recommend to member governments the full utilisation and strengthening of Policy Units, Planning Units, Debt Units and Statistical Departments within the public sector architecture, and that they should seek to enhance the consultative process in policy-making by operationalising the Tripartite Committees and National Economic Councils.
Among the other areas discussed were the Pension Reform and Administration Commission, the ECCU Oil Pricing Mechanism, Money and Credit Policy and CSME and the Proposed Regional Development Fund.
The 55th Meeting of the Monetary Council was attended by the Anguilla’s Minister of Finance Victor Banks; Antigua and Barbuda Minister of Finance Dr. Errol Cort; Prime Minister and Minister of Finance, Commonwealth of Dominica, Roosevelt Skerrit; Grenada’s Minister of Finance Anthony Boatswain; Montserrat’s Minister of Agriculture Margaret Dyer-Howe; Permanent Secretary, Ministry of Finance, Saint Lucia (Alternate Member), Trevor Brathwaite; Minister of State in the Office of the Prime Minister of St. Vincent and the Grenadines (Temporary Alternate Member), Conrad Sayers; and Prime Minister and Minister of Finance, St. Kitts and Nevis Dr. Denzil Douglas.
The next meeting of the Monetary Council will be held in St. Vincent and the Grenadines on Friday, July 21, 2006.