This presentation was delivered by Carl Howell, Chief Economist (Ag.) at a Seminar on Public Sector Debt in the Caribbean: An Agenda for Reduction and Sustainability. The event took place on May 23, 2013 in Saint Lucia. For more information about this subject, visit www.caribank.org.

1. Public Debt in the Caribbean:
An Agenda for Reduction and
Sustainability
Carl Howell
Chief Economist Ag.
Economics Department
May 23, 2013

2. The main effort of the publication
covers..
• Assessment
• Decomposition
• Projections
• Institutional foundations
• Recommendations

3. Debt/GDP (Middle-Income
Countries)
0 20 40 60 80 100 120 140 160
St. Kitts & Nevis
Lebanon
Jamaica
Barbados
Grenada
Antigua & Barbuda
Sri Lanka
Belize
Egypt
Nicaragua
Dominica
Bahamas
Guyana
St. Lucia
St. Vincent & Grndnes
Jordan
Brazil
Mauritius
Seychelles
Morocco
Bhutan
Vietnam
Phillipines
Uruguay
El Salvador
Malaysia
Argentina
Turkey
Columbia
Mexico
Trinidad & Tobago
Panama
Suriname

4. Debt/GDP (Middle-Income
Countries)
0 20 40 60 80 100 120 140 160
St. Kitts & Nevis
Lebanon
Jamaica
Barbados
Grenada
Antigua & Barbuda
Sri Lanka
Belize
Egypt
Nicaragua
Dominica
Bahamas
Guyana
St. Lucia
St. Vincent & Grndnes
Jordan
Brazil
Mauritius
Seychelles
Morocco
Bhutan
Vietnam
Phillipines
Uruguay
El Salvador
Malaysia
Argentina
Turkey
Columbia
Mexico
Trinidad & Tobago
Panama
Suriname

5. Debt/GDP Progression
0
50
100
150
200
250
2000 2005 2010

6. Debt Restructuring Agreements
 Antigua & Barbuda: Debt rescheduling &
exchange (2010)
 Belize: Debt exchange (2006, 2012)
 Dominica: Debt rescheduling & exchange (2004)
 Grenada: Debt rescheduling & exchange (2005,
2013)
 Guyana: Debt relief (2003 & 2006)
 Haiti: Debt forgiveness (2009)
 Jamaica: Debt exchange (2010, 2012)
 Suriname: Debt rescheduling (2008)

7. Debt Mix (Non-ECCU)

8. Debt Mix (ECCU)

9. Debt Mix (Overseas Territories)

10. Decomposing Changes in Debt
Δ
𝑑𝑒𝑏𝑡
𝐺𝐷𝑃
= pri bal + interest – growth + exch rate + cont liab
    
   
Decomposing
Projecting
?

11. Sources of Debt
 Basic balance
 Capital balance
 Interest payments
 Revaluations
 Off-budget events

12. Debt to GDP Ratios

13. Debt to GDP Ratios

14. Belize: 1996 - 2004

15. Grenada: 2001 - 2010

16. St Kitts / Nevis: 1995 - 2006

17. Antigua / Barbuda: 1994 - 2004

18. Barbados: 2000 - 2009

19. Jamaica: 1997 - 2003

20. Main Sources of Debt Growth
 Capital expenditure
 Debt service
 Off-budget liabilities

21. Scenarios

22. Baseline Projection

23. Target Projections

24. Main takeaways
 (Promised) reforms improve debt
trajectory
▫ Most of the heavily-indebted Caribbean countries
have implemented policies that reduce default risk.
 More concrete measures are
required to generate larger primary
surpluses!

25. The Role of
Institutions/Recommendations
 Need to improve debt management
structures
 Broaden fiscal responsibility
Frameworks
 Expand the use of risk transfer
mechanisms
 Promote broad base economic growth

26. Thank You