Robust Financial System Vital For Growth – IMF Official

Deputy Managing Director of the International Monetary Fund (IMF), Dr. Min Zhu, says a robust financial system is vital for sustainable growth in the economies of Caribbean countries.

“We have seen from crises elsewhere, how difficult it is for countries to grow if the banking system is under threat. Hence, maintaining strong banks and safeguarding financial stability are key prerequisites for delivering better Caribbean growth,” Dr. Min said.

He was addressing the opening ceremony of the two-day High Level Caribbean Forum, which opened on October 23, at the Montego Bay Convention Centre, in Rose Hall, Montego Bay, under the theme: ‘Unlocking Economic Growth’.

Addressing some of the important inputs to financial robustness, Dr. Min said effective financial sector regulation and supervision are critical.

He noted that the recent global financial crisis brought to the fore, the importance of financial interconnectedness. The Caribbean, he observed, experienced first-hand, the downside impact of financial interconnectedness with the Colonial Life Insurance – British American Insurance Company (CLICO-BAICO) meltdown.

The IMF, Dr. Min said, is collaborating closely with the region to gain a deeper understanding of regional interconnectedness.

“We are aware that a part of your economic diversification strategy is the development of international financial centres (IFCs). Potential benefits include local employment opportunities, labour skills development and technological advances to the communications infrastructure,” he said, noting that these fruits will be realized only if IFCs find an acceptable place in the global financial community.

Dr. Min also cited the high cost of energy and its debilitating effect on both production and the expansion of the economies of Caribbean nations, and called for greater levels of collaboration with the private sector to access cheaper energy.

The Deputy Managing Director said the Caribbean Forum is an important platform for collaboration and for advancing solutions to the key challenges facing the region.

Finance Ministers and other government officials from Caribbean countries,  including Antigua-Barbuda,  The Bahamas, Barbados, Belize, Dominica, Grenada, St. Lucia, Surinam,  Trinidad and Tobago,  as well as officials from the Inter-American Development Bank, the World Bank, and the Caribbean Development Bank are taking part in the forum.

The forum ends today (October 24), with sessions on: ‘Opportunities and Constraints for Caribbean Growth’; and ‘Building Financial Sector Resilience’.