On Wednesday on St. Michael Barbados, the CDB held its annual press conference reviewing the performance of its 19 member countries in 2014. One issue they addressed was the growing debt profile of a number of those countries - and no small part of that is owing to the PEtrocaribe programme. IT's debt on concessionary terms, but we asked the economics expert if it is sustainable:..
Jules Vasquez
"It is two things; it is both extremely concessionary terms. As far as debt goes, it's the best that you can get. But at the same time, it's also debt. It has to be repaid. How do you see Belize's taking of quite significant sums, it's in the hundreds of millions, from the Petro Caribe initiative."
Dr. Justin Ram, Director of Economics, Caribbean Development Bank
"Petro Caribe can have a debt burden, but if it is manage properly, I am sure the authorities in Belize can find ways to manage it so that this debt is a sustainable debt and can rebound to the benefit of Belizeans."
Jules Vasquez
"Now, you spoke about the infrastructure projects as investments. Indeed they are, but shouldn't investments be recoupable? Shouldn't they recoup some return?"
Dr. Justin Ram
"If a government invest in a new road, that's not going to be yield financial returns, but certainly, the economic returns associated with that road, as you allow greater efficiency and ease of goods and people to move around, that that will rebound to overall economic output."
And that overall economic outlook is hampered by how hard it is to do business in the Caribbean. A recent World Bank survey found that in this region it takes a lot of time and money to start up a business - a standard far form the best in the world. Dr. Ram explained:..
Dr. Justin Ram, Director of Economics, Caribbean Development Bank
"A sample of the latest doing business indicators, taken from the World Bank's Doing Business Report, suggest that the region is lagging behind. When compared to the top ranked economy, Singapore, where cost of starting a business is an average 37 times that of what it is in Singapore here in our region. Our taxes and profits are 38% on average, while in Singapore, it is only 18%. And the cost to export a container is $460 and in the region it is in excess of one thousand dollars on average."
According to the survey - shipping that container out of Belize cost 892 dollars.
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