Caribbean & Central America - December 2017 (ISSN 1741-4458)

*** JAMAICA PLEASES ENVIRONMENTALISTS OVER MINING. On 21 November, Prime Minister Andrew Holness announced a ban on mining in the environmentally sensitive Cockpit Country, an area in Trelawny and Saint Elizabeth parishes. He said that any existing mining licences that allowed mining in the designated zones would be amended. Holness said: “The area is too valuable in terms of its ecological and hydrological importance and uniqueness to allow mining, which may result in permanent and irreversible harm, and deprive future generations of the benefit of the national asset.”

As to the designation of the protected area, this will coincide with the boundary specified in 2005 by the geologist Parris Lyew-Ayee. Holness said: “We are therefore protecting the ‘core Cockpit’, that is areas that have not been degraded and occupied by irreversible human activities, as well as the forests’ flora and fauna that subsist on the core…or surround the boundary of the Cockpit Country and the Cockpit Country Protected Area.”

It is the government’s intention to have the Cockpit Country Protected Area declared a world heritage site by the United Nations Educational, Scientific, and Cultural Organization (Unesco).

*** IMF TELLS REGION TO LOOK TO GRENADA, JAMAICA, AND ST KITTS. In mid-November, International Monetary Fund (IMF) head Christine Lagarde told the 2017 High Level Caribbean Forum that “too often promising reforms have been cut short by policy reversals driven by political pressures”. However, she pointed to Grenada, Jamaica, and St Kitts & Nevis as examples of countries where “well-designed fiscal rules” have contributed to stability. She said: “The experience of these countries, which has been very successful, can provide a good example for other countries in the region”.

Nevertheless, the IMF chief admitted that despite the efforts by “many authorities in the region” to pursue macroeconomic stability and fiscal consolidation, “growth is somehow resisting those efforts”. Lagarde added: “It is actually a bit of a puzzle as to why that is.” External shocks could account for some of this disappointment. Other factors could include high electricity costs, limited access to credit, high rates of violent crime, and the loss of talented youth to emigration.

*** IMF CONTINUES TO FUSS OVER BARBADOS. Barbados appeared to be one of the countries that was in Lagarde’s sights when she urged long term policies that are resistant to short-term political pressures (see above). Over recent years Barbados has introduced and then abandoned a medium-term fiscal strategy, and at the moment it is still resisting turning to the IMF for help. Further to Largarde’s comments, on 20 November Barbados Today published an interview with the IMF director for the Western Hemisphere, Alejandro Werner, in which he suggested that a devaluation of the Barbados dollar, currently pegged at BD$2.00 to US$1.00, could be a sensible option, along with a programme of fiscal consolidation.

Werner’s remarks coincided with warnings from Judith Gold, the head of the latest Article IV mission to Barbados, which ended on 22 November. Gold emphasised in particular the need to reform the country’s state-owned enterprises. She said: “Given the urgency in addressing funding, balance of payments risks, the high debt, and limited policy options, the fiscal adjustment must continue with a focus of accelerating reforms [of state-owned enterprises].” She added that these reforms must include “improved management, cost recovery reduced services, mergers, closures, and privatisation”. Gold added: “Containing other current expenditures, including the wage bill and government pensions is also critical.”