Chastanet calls on IMF to reclassify small states' disaster expenditure debt

Wednesday, November 29, 2017

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ROSE HALL, St James — St Lucia Prime Minister Allen Chastanet is calling on multilateral organisations such as the International Monetary Fund (IMF) to reclassify the disaster expenditure debt of small island developing states.

Making the argument at the United Nations World Tourism Organization (UNWTO) international tourism conference yesterday, Chastanet noted that Caribbean countries have been forced to spend heavily on building resilient infrastructure to protect the State and private sector assets from natural disasters such as the three major hurricanes experienced in the region this year.

“We are saying to the IMF, we don't believe that this expenditure should be classified topically as debt because we are being forced to make this expenditure. So, if you already have high debt, where are you going to find the fiscal space to be able to borrow the money, even if it is on a concession basis?

“So we are saying either that money will have to be off the balance sheet or amortise it over a longer period of time and it only smaller portions of it every single year, but it cannot be business as usual. We cannot work in the existing protocal. Otherwise, the Caribbean and the states in particular will not be able to help themselves,” Chastanet argued.

His comments follow those he made Monday afternoon during a Multi-destination Tourism in the Caribbean Current Trends and Future Prospects round-table discussion, which formed part of the opening session of the conference.

The three day conference, which comes to end today is being held at the Montego Bay Convention Centre in St James.

In addition to the appeal for the reclassification of disaster expenditure debt, Chastanet said there are some “critical things that must be focused on” if the region is to progress.

They are: reclassifying small island developing states away from per capita GDP to allow them to receive concessional financing; establishing a dedicated recovery fund; and building resilience.

“When you look at the overall level of damage done in the Caribbean, the amount of money that has been allocated or the support given was really to get the countries open for business,” stated Chastanet.

He continued, “But in terms of building resilience — and what do I mean by building resilience? Slope stabilisation, widening our rivers, raising the bridges, putting in bigger drains, putting utilities on the ground, no longer using schools as shelters and having dedicated shelters, that's just an example.

“The opportunity cost: all the money that has been lost everyday because businesses have been closed and nobody, no tourists have been coming in. Cruise ships can't come in to the eastern Caribbean because of the problems in Puerto Rico. Where is the recovery for that? So that's why I say there are four critical things that we have to focus on,” added Chastanet.

This year has been the most costly hurricane season on record, with a preliminary total of over US$367.56 billion in damages, nearly all of which was due to hurricanes Harvey, Irma, and Maria.




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