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Monday 20 May 2019
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ECLAC: HSF vital to TT

THE Heritage and Stabilisation Fund (HSF) remains an important fiscal buffer for this country. This was the view expressed by United Nations Economic Commission for Latin America and the Caribbean (ECLAC) Deputy Director Dillon Alleyne following a teleconference presentation on ECLAC’s 2016 annual report at the commission’s offices in Port-of-Spain .

During the actual presentation of the report, which took place in Santiago, Chile, ECLAC Executive Secretary Alicia Barcena identified TT as one of six countries in the Latin America-Caribbean region that are expected to show economic contraction this year. Those countries are Venezuela (minus eight percent), Suriname (minus four percent), Brazil (minus 3.5 percent), TT (minus 2.5 percent), Ecuador (minus 2.5 percent), and Argentina (minus 1.5 percent) .

Barcena added that regional growth this year will be led by the Dominican Republic (six percent), Panama (5.9 percent), Nicaragua and Bolivia (4.5 percent), and Costa Rica (4.3 percent). In his subsequent presentation, Alleyne focused on the report’s implications for the Caribbean. “The most serious challenge in the Caribbean continues to be the debt problem,” he said .

As he noted that Jamaica and Barbados each have debt to GDP (gross domestic product) ratios in excess of 100 percent, Alleyne also indicated that the debt stock by itself was not the only challenge for Caribbean countries .

He said another challenge is the debt service, which is significant for some Caribbean countries as a share of government spending .

Describing TT, Suriname and Guyana as goods producers that seem to be handling debt issues better than other Caribbean countries which are regarded as service providers, Alleyne said there will be increases in debt stock prices as the prices of primary commodities remain low. In the case of TT, Alleyne said the HSF remains an important fiscal buffer for this country. However, he added that the HSF “needs to be used to finance productive investment rather than consumption .

Speaking in the House of Representatives on June 10, Finance Minister Colm Imbert said the Fund has over US$5.3 billion in it. Imbert also explained there are strict legal rules for drawdowns from the Fund .

Prime Minister Dr Keith Rowley and Imbert have both spoken about legislation being brought to Parliament to divide the HSF into separate heritage and stabilisation components .

In her presentation, Barcena said Latin American and Caribbean countries will show a -0.8 percent contraction in their growth rate in 2016 compared to a decline of -0.5 percent last year. She stated, “The capacity of countries to accelerate economic growth depends on the spaces for adopting policies that support investment.” Barcena added, “These policies should be accompanied by efforts to change the conversation between the public sector and private companies. Increasing productivity is also a key challenge for moving forward along a path of dynamic and stable growth.”

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