A number of public and private sector officials in finance and banking, as well as media representatives in Anguilla, joined their counterparts in the other member territories of the Eastern Caribbean Central Bank on January 12, for a live video presentation by Governor Sir K. Dwight Venner.

Public & Private Sector Officials and media representatives in Anguilla

The address, covering an Economic Review of the Eastern Caribbean Currency Union for 2005, and a number of major issues in 2006, was delivered to listeners in the eight-member territories via a video-conference link. In Anguilla the address was listened to at the ECCB’s Representative Office at the Fair Play Complex. The link up also allowed those in attendance, as well as other persons at the offices in the various islands, to participate in a lively interactive discussion following the Governor’s address when there were shared opportunities for questions.

The meeting in Anguilla was coordinated by ECCB Representative in Anguilla, Marilyn Bartlette, assisted by the Secretary, Patricia Webster.

Governor Venner, known for his excellent delivery in public speaking and sharpness in replying to questions, made his presentation from the ECCB Headquarters in Basseterre, St. Kitts.

He said that in 2005 the Currency Union had experienced growth at 4% which was approximately the same as in 2004. “This growth was attributed to a sharp expansion in public and private sector construction activity, partly due to the preparations for the Cricket World Cup 2007,” he explained. “Increased activity in wholesale and retail trade, transportation and communications and the banking sector, also contributed to growth in 2005.”

The ECCB Governor went on: “The performance of tourism in 2005 was somewhat weaker than in 2004. Stay-over arrivals to the Currency Union as a whole declined marginally, mainly due to the lingering effects of hurricane Ivan on Grenada. However, most of the other countries recorded increases in stay-over arrivals. The numbers of cruise ship visitors declined, but this followed a record level of cruise passengers in 2004.

“Output in the agricultural sector, which on average contributed 6.4 percent of GDP in 2004, declined significantly in 2005 due to the weak performance of the traditional export crops. Production of bananas, sugar, nutmegs and cocoa fell sharply.

Sir Dwight Venner in video presentation

“The rate of inflation in the Currency Union for 2005 has been provisionally estimated at 3.5 percent. This is explained by a surge in the international price of oil and other commodities such as cement, steel, lumber and other building materials.

“In the monetary sphere, the ECCB paid particular attention to its objectives of maintaining currency and financial stability in the Currency Union. The low rate of inflation ensured the maintenance of the purchasing power of the currency, while the high level of foreign exchange reserves enhanced the external stability of the EC dollar.
“The banking system experienced growth in its assets, as well as an increase in capital and high levels of liquidity. No threats to the stability of the financial system emerged in 2005.”

Governor Venner spoke of what he saw as some of the major issues for 2006. He was of the view that the year “will witness some very specific events and circumstances.” These, he pointed out, “will require new and strategic responses from us as individuals, families, business firms, trade unions, civic organizations, countries and as a closely connected group of countries, the OECS.”

He continued: “The major challenges in the international area will come from the new trading regimes which are now being negotiated under what is called the DOHA round. The major issues involved would be liberalisation in the trading of agricultural commodities and services. These will have a major impact on the future prospects of our economies for which we will have to be prepared.

“The Caribbean Single Market and Economy (CSME) will in all probability come into existence during the course of this year. This arrangement will pose a major challenge for the OECS countries as deeper forms of integration are proposed, which will require substantial structural and institutional changes at the political and economic levels for their successful participation.

“These events will be taking place against the backdrop of a world economy which experienced significant growth in 2005 and by all accounts will continue to do so in 2006. The economy of the United States has continued to grow at an average rate of 4 percent despite significant trade and fiscal imbalances; the Canadian economy is experiencing a boom due to its thriving commodities sector; the United Kingdom and European Union economies are experiencing moderate growth; and Japan has experienced a major upsurge of growth after a decade of stagnation. However, it is the two most populous countries in the world, China and India, which continue to experience explosive growth rates and are having a major impact on the world economy.”

The Central Bank’s Governor noted that the expanding global economy continued to face such threats as international terrorism, rising interest rates, high oil prices and the management of the twin deficits in the US economy. He pointed out that a growing global economy was vital for the progress of the small economies of the sub-region which depend on tourism as its leading foreign exchange earner as well as sustainable global growth.

Governor Venner further stated: “On the domestic front, there are economic and social challenges, which our countries will have to confront in 2006 before they become endemic and completely out of control. On the social front, the following seem to stand out: increasing levels of crime and violence; the apparent state of social alienation of the young male population; higher levels of drug use and abuse; and higher levels of HIV/AIDS infection.”

He emphasised that 2006 would pose significant challenges to policy-makers in the Currency Union, but there would be some very positive activity during the year, particularly in the construction sector.

He said however that the islands must extend their horizons beyond the next 18 months to 2010. He explained that this would be necessary “because we will have to manage our economies, which will be subject to a significant upturn in growth in 2006/2007 to bring them into soft landings and sustained growth in the period 2010.”

The ECCB Governor outlined a number of steps that the member territories should take to ensure continued economic growth and well-being. These will be given in the next issue of The Anguillian.

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