Statement on Turks and Caicos Islands' Country Strategy Paper

Transcription

1 AS PREPARED FOR DELIVERY Statement on Turks and Caicos Islands' Country Strategy Paper Dr. Justin Ram Director of Economics Caribbean Development Bank Press Briefing by Turks and Caicos Islands' Minister of Finance on Country Strategy Paper November 5, 2015 Office of the Premier, Providenciales, Turks and Caicos Islands

2 -2- Premier Ewing Minister Misick Other Members of Cabinet Members of the Press Ladies and Gentlemen Good Morning: We are delighted to have completed the first country strategy paper for the Turks and Caicos Islands. Between April and September of this year officers of the Caribbean Development Bank (CDB) held active discussions with the Government, private sector and other civil society stakeholders which resulted in the preparation of the a strategy which has been accepted by Parliament and supports the development goals of the country. The Country Strategy will guide CDB s support to TCI for the period through to Before we expound on the CSP, let me share that the plans and recommendations in the strategy bear global and regional economic factors in mind and chart a path that factors the foreseen elements that affect Turks and Caicos Islands. I will discuss briefly the current economic situation which forms the background and basis of the CSP. Economic Performance The economy of Turks and Caicos Islands performed admirably during the decade preceding the financial crisis that arose in 2008/2009 with growth averaging 8.7% for the years Unfortunately, the onslaught of the financial crisis and the impacts of two natural disasters, exposed

3 -3- significant vulnerabilities in the Turks and Caicos Islands economy including declines in the main sector of economic growth - tourism - and public finance stress. In 2009, economic growth contracted by 19.6% and the fiscal deficit was 9.2% of Gross Domestic Product (GDP). Since then, the Government of the Turks and Caicos Islands (GOTCI) has made bold decisions and has adhered to a path of fiscal consolidation and public financial management reform which paid off with Turks and Caicos Islands turning a corner and achieving economic growth of about 4.6% in Projections show that economic growth has continued at a moderate pace in Additionally, the fiscal accounts are in surplus; debt is on a downward trajectory; and Standard and Poor s Rating agency in July 2015, affirmed Turks and Caicos Islands credit rating at BBB+. CDB commends The GOTCI for its fiscal efforts, the results of which make Turks and Caicos Islands an exemplar for other Caribbean states in this regard. Challenges This performance is commendable and positions Turks and Caicos Islands to confront development challenges which, if not addressed, could curtail its ability to realise its full development potential. These challenges include: 1. Fiscal vulnerability and financing development 2. Economies of scale constraints 3. Infrastructure deficits 4. Weak enabling environment for Medium, Small and Micro Enterprises

4 5. Scarce human resources 6. Natural environment vulnerability 7. The need to improve educational attainment 8. The high cost of energy -4- The Caribbean Development Bank s Country Strategy Support In light of the great progress that the Turks and Caicos Islands has made with its public finances, its economic growth, propelled by the tourism industry; and the need to still address the economic and social challenges alluded to earlier, CDB is optimistic about the development path and looks forward to working steadily with Turks and Caicos Islands as it charts a course to sustainable, equitable growth and development. CDB s strategy includes the allocation of USD100 million to finance development projects in Turks and Caicos Islands in the areas of: 1. Macroeconomic Policy and Development Planning 2. Enhancing Infrastructure 3. Access to finance and provision of business development services 4. Education 5. Environmental Sustainability Turks and Caicos Islands is vulnerable to the impacts of climate change, therefore all of the above projects will need to be screened for climate risks and include measures to improve resilience against these effects. This, in turn, could enable CDB to apply funding to the projects identified in CDB s Climate Action Line of Credit (CALC) offered at a favorable interest rate.

5 -5- In the context of fostering greater private sector involvement in the development of Turks and Caicos Islands, CDB can also provide assistance to GOTCI to adequately structure these engagements with the private sector, including through public-private partnerships (PPP). Earlier this year, CDB launched the first phase of the Regional PPP Support Facility, designed to assist its Borrowing Member Countries (BMCs) in the implementation of PPP policies, programmes and projects. CDB s further support to Turks and Caicos Islands includes the provision of significant technical assistance to: 1. Chart a Medium-Term Development Strategy 2. Structure a sovereign wealth fund 3. Evaluate the feasibility of large infrastructure projects CDB s goal for our BMCs is the implementation of policies and projects that will propel them onto a path of sustainability and resilience. CDB is committed to playing our part and to help make the achievement of growth, and the improvement in the lives of citizens in our BMCs a reality. I thank you.