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Volume No. 1 Issue No. 26 - Friday, August 16, 2002 |
CARICOM to assist Dominica in Negotiating with IMF
by Thomson Fontaine
The Caribbean Community (CARICOM) will send a delegation to Dominica to help it negotiate an aid and stabilization program with the International Monetary Fund - IMF.
The announcement was made by President Bharrat Jagdeo of Guyana, who is currently chairman of CARICOM. The team would include officials from governments in the Region with experience in dealing with the IMF. No date was given for the team's visit. Jamaica, Trinidad and Tobago, Barbados, Guyana, Dominica, Belize and Grenada have all received IMF programs in the past.
Dominica has been facing severe economic problems and recently announced that it was in negociations with the IMF to secure a stabilization program. In preparation for this program,
the government of Dominica imposed a four percent stabilization levy, and embarked on a series of cut cutting measures including trimming the Cabinet from 12 to 9 ministers.
Dominica is a nation of 71,000 people and is now considered to be one of the poorest in the region.
Speaking at a news conference after a one-day economic summit, Jagdeo said some leaders expressed willingness to provide short-term financial assistance to Dominica.
"Dominica does not have much room to maneuver in terms of handling the hardships it is facing," Jagdeo said.
Edwin Carrington, the Caribbean Community's secretary-general, said Dominica's problems were "acute" due to the island's heavy dependence on bananas and its troubles in attracting tourists.
In the past year, Dominica has been hit particularly hard by the U.S. recession and a downturn in tourism after the Sept. 11 attacks. In Addition, the
mainstay of the economy bananas, has been on the decline as the country faces the prospects of the gradual elimination of preferential quotas on Caribbean exports of bananas. Preferential treatment will be completely eliminated by 2006.
During Friday's meeting, Caribbean leaders discussed a proposal to create a stabilization fund to help bail countries out of economic trouble.
Jagdeo said the fund, which would provide loans and grants, would first offer assistance to Dominica.
It was not clear under what terms and conditions the assistance would be granted, and how soon it would be made available to Dominica.
Jagdeo said Caribbean countries could use interest on reserves held by their central banks to contribute to the fund.
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