Women and gentlemen, good afternoon! It’s an honor for me to speak to you as we speak about my first go to to Grenada.
Earlier than I got here here, I had typically heard the identify "Spice Island" from Grenada. Caribbean destinations. I’ve been curious to know what this time period means. Over the past few days I’ve seen the panorama of Grenada pure beauty and variety, tasted distinctive and seasoned dishes and loved the interplay of intelligent, dynamic and very inviting with the individuals. I am, in fact, simply beginning out learning course of. However I'm already very hungry to know more about the story of Grenada components, together with that which has contributed to the spectacular financial recovery in current years.
I traveled earlier this week to Dominica. I used to be changed by Dominica's change of panorama, which I noticed from class 5 hurricane Maria in 2017. And naturally reminded me of Grenada's own experiments in 2004 during Hurricane Ivan. The significant recovery since then and Dominican over the previous yr bear witness to the Caribbean's willpower to build a better future in the face of outstanding challenges.
I am pleased to satisfy you immediately and Grenada officers, members of Parliament, with companies and improvement companions. That is part of an necessary debate on easy methods to work together to further strengthen natural disasters and local weather change. It’s also part of a broader strategy to realize robust and sustainable progress in Grenada and the Caribbean
This idea of a standard technique to combat local weather change is what I want to take a look at in depth this afternoon. Let us first set the stage for an summary of the economic prospects of the ECCU region and Grenada
Regional prospects are enhancing. Several nations have seen a decide-up in economic exercise as a result of increased demand for tourism. This has been supported by robust progress in the United States. On this context, Grenada has grown strongly by about 5% in 2017. And we estimate that it grew at the similar price as final yr. Demand for fastened tourism is predicted to continue this yr. This could assist to proceed the restoration in the region, including the nations affected by the hurricanes of 2017
. The dangers of natural disasters in the area affect all sectors and are rising because of climate change
Financial risks are still present. Though some progress has been made in this area, long-time period shortcomings must be addressed. The legacy of dangerous loans continues to weigh the financial outlook. Comparable banking relationships must also be monitored.
In the external sector, the current account deficit stays excessive. This highlights the challenges of competitiveness and progress in the area.
Lastly, this area has long fought with excessive public debt when progress is sluggish. ECCU's public debt has just lately declined. Nevertheless, this development in some nations displays short-term elements, including revenue from citizenship packages. In consequence, the ECCU debt dedication, which is 60% of GDP by 2030, remains troublesome in most nations, albeit to Grenada, which has made vital progress. Stronger fiscal policies are essential to realize this objective across the region
Grenada's necessary breakthroughs
Towards this background, Grenada has made vital breakthroughs to deal with its financial challenges.
Let us first take a look at the political response to pure disasters in which Grenada has made vital progress. Hurricane Ivan brought on injury that was over 200 % of GDP. Over the previous decade, your nation has adopted a technique that focuses on infrastructure reconstruction and institutional capacity building. Public investment plans include more and extra flexible infrastructure tasks. The authorities' local weather change policy and national adjustment plan for 2017 are detailed and value-effective. Sectoral plans are progressing. Lately, a particular Division of Climate Sustainability was created. Current assist funding from local weather funds – including the water undertaking – is a serious achievement. And progressive hurricane clauses have been introduced into debt agreements that limit useful resource outflows in the event of damaging storms.
After a deep economic disaster 5 years ago, the government selected fiscal self-discipline – supported by the regulation on tax liability. break the sample of high debt and low progress. This fiscal adjustment helped to scale back the deficit by virtually 10% of GDP. It also lowered public debt from 108% of GDP in 2013 to over 40 proportion points
Regardless of the worry that such excessive fiscal adjustment would injury manufacturing, Grenada's average progress fee was 5% and half a yr. This is constructive compared to other ECCU and Caribbean nations. It is essential that the authorities's robust efforts acquired broad help by way of a social settlement negotiated with domestic stakeholders.
In summary, the Grenada authorities have made vital efforts to scale back debt and enhance public finances for future generations. These essential good points are a nationwide useful resource and a product of arduous work of all Grenadians. They deserve safety.
These are all constructive occasions, however it’s mandatory to acknowledge that Grenada and the wider Caribbean can do extra. The give attention to submit-accident recovery must be complemented by better preparedness. The expertise of the region's hurricanes continues to emphasize the have to build extra versatile infrastructures and use assets to unravel issues immediately.
There are lots of good practices in the world. New Zealand and the Philippines are creating efficient natural catastrophe funds. Japan demonstrates the importance of prioritizing versatile infrastructures and price range mechanisms for contingency planning
Venture Planning and Implementation
Grenada and different Caribbean nations should proceed their efforts to improve undertaking planning and implementation capacity. Giving Caribbean funding, regardless of some successes, remains restricted compared to needs. Donors also needs to give attention to supporting help for preparedness.
Disaster preparedness could be a large difference. It is simpler than responding after an occasion. Preparation not solely reduces the quick effect. Our research exhibits that over time, it promotes progress and personal investment, and reduces emigration and brain drain. Most Caribbean nations can do rather more to develop versatile public infrastructure and to protect key sectors of the financial system.
Subsequently, a comprehensive strategy – or the disaster sustainability strategy we name – to cope with climate points is so essential. This country-specific technique would handle the ongoing efforts to resolve natural disasters, prioritize actions, consensus amongst all stakeholders and progress in capability constructing. An essential objective can be to work in the direction of lengthy-time period financial sustainability
. The technique begins with a sensible assessment of the economic impression and desired policy responses of local weather change risks. Policy makers should also explicitly embrace these evaluations and policies in their operational packages, together with budgetary insurance policies. This technique must be absolutely funded over an extended multiannual period.
A complete strategy additionally requires that coverage actions are practical. On this regard, I see three pillars:
Firstly, more investment in emergency preparedness and response, resembling early warning techniques, protection and security and the distribution of important items and providers
. and social infrastructure. There are a selection of sensible steps that may assist scale back the risks of future storms. For instance, investing in disaster-resistant infrastructure, controlling land use and zoning rules to limit deforestation and coastal publicity and to make sure applicable building requirements
Thirdly, measures to ensure monetary sustainability are essential. These embrace insurance coverage mechanisms and cash reserves that enable speedy and effective catastrophe preparedness and submit-disaster response
What is required to put such a technique into follow in the area? Stronger authorities efforts, particularly in enhancing budgeting and venture implementation capability, are key to this success. It might also imply sustaining a robust fiscal coverage and rushing up reforms to rationalize and streamline all public spending. This might tremendously help nations' credibility with the worldwide group.
The Worldwide Dimension
The implementation of this strategy has an essential international dimension. At the IMF / World Bank / IDB Excessive Degree Conference on Sustainability in the Caribbean, many leaders expressed help for "building an alliance" amongst key stakeholders. Regional coordination is important
And worldwide improvement companions have an essential position to play. They might present help in formulating and implementing such a comprehensive and built-in duty technique to deal with the assets and implementation capacities that each one small nations face. Coordination between the IMF, the World Financial institution, multilateral improvement banks, bilateral partners, insurance coverage corporations, climate funds and business is obvious
The IMF might take part in a flexibility technique in a lot of areas.
We might assist nations develop an applicable macroeconomic coverage framework. One option to obtain this can be a new analytical software developed collectively with the World Bank. This is the so-referred to as. An assessment of climate change policy provides an excellent image of the nation's political response to local weather change. It takes under consideration macroeconomic, fiscal and different coverage requirements and defines key areas for improvement. A number of Caribbean nations and different elements of the world have already carried out these assessments, and one is at present in Grenada.
The IMF might determine fiscal insurance policies that create room for flexibility tasks as effectively as attainable; encourages intelligent climate motion, similar to clear power; whereas making certain debt sustainability. It might also help provide technical help in areas which are flexible.
Lastly, the fund might help develop built-in coverage advice on monetary duty, including the design and use of insurance and debt devices. On this context, we might take part in funding, including by way of donor funds.
These are major challenges. Climate change – in the Caribbean and throughout the world – requires the response of the worldwide group. Grenada and different small states are feeling the results of this looming crisis in a method that could be very totally different from most different nations. You pay the worth you didn't create. So it's time for a worldwide response. Let's work together on solutions that shield my house, house, and way of life.