Jagdeo warns CARICOM facing bankruptcy

President Bharrat Jagdeo of Guyana has warned that the Caribbean is on the verge of bankruptcy and has reiterated his call for urgent debt relief by the international financial institutions.

Speaking in Georgetown, Jagdeo say the problem is aggravated by the fact that many countries are spending more on servicing external debt.

Jagdeo heads a special Caribbean Community (CARICOM) task force to assess the financial crisis in the region.

He told reporters, “If countries could be declared bankrupt, many of the countries simply cannot pay their way and they can’t meet recurring cost and pay their debts.

He added, "Unless there is radical restructuring or increase sources of revenue, the situation will get worse”.

Jagdeo cited poor productivity and the heavy debt as the main factors contributing to the financial crisis in the region, adding that the situation has been further exacerbated by the global financial crisis, the reduction in exports, remittances and tourist arrivals.

“We hope with the abatement of the crisis, not that we are out of the woods as yet and it is still very tenuous, but this may improve the macro-economic fundamentals of these countries, but they simply can’t sustain their large quantity of debts.”

Jagdeo said during the CARICOM heads meeting with top officials of the World Bank, the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB) in Dominica earlier this month, the region took the opportunity to highlight its case.

World Bank president Robert Zoellick said his organization is willing to send in experts to the various Caribbean countries to assess their debt management strategies.

But Jagdeo told reporters there is a huge challenge in crafting a regional debt strategy since individual countries have unique debt problems and this must be addressed on a case by case basis.

“Many countries will not have a good future unless their debt problems are tackled,” he said, noting that Guyana had faced similar problems in the past. “We had that when the debt burden use to suck up over 94 per cent of our revenue, it sucked the life out of our economy, and we had tough period of dealing with that.” Jagdeo added.