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International Monetary Fund recommends 3 vital areas for regional transformation

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by Linda Straker

  • Regional integration and leveraging common institutional arrangements; working towards a disaster resilience strategy and improving tax policy are three vital areas for regional transformation
  • Grenada is piloting a Disaster Resilience Strategy

Tao Zhang, Deputy Managing Director, International Monetary Fund (IMF) is of the opinion that the 3 vital areas for regional transformation are:

  1. regional integration and leveraging common institutional arrangements
  2. working towards a disaster resilience strategy
  3. improving tax policy

“The theme of this forum is regional transformation. I think this is important because regional transformation is essential to support higher economic growth for the Caribbean. For too long, economic growth in the Caribbean has languished, offering too few opportunities, in particular, for its young people. This has led to rising social and economic challenges—including poverty, inequality, unemployment and crime,” Zhang said at the opening ceremony of the Ninth Caribbean Forum in Barbados on Thursday.

The forum co-organised by the Caribbean Development Bank (CDB), the Government of Barbados and the IMF gathered 200 delegates at the Lloyd Erskine Sandiford Centre. The theme for the forum is “Regional Transformation for Inclusive and Sustainable Growth.”

Elaborating on the area of a disaster resilience strategy, Zhang said that climate change is expected to intensify the impact of natural disasters and worsen the vulnerabilities of small states like those in the Caribbean. “Rising sea levels increase risks of erosion and flooding and warmer water temperatures heighten the potential for more intense hurricanes. We must come together to address the challenges posed by climate change and help those most affected by it.”

Recent IMF analysis identified a 3-pillar strategy for building structural, financial, and post-disaster resilience and Grenada and Dominica are piloting a Disaster Resilience Strategy.

“Structural resilience will require infrastructure and other investment to limit the impact of disasters. Post-disaster resilience aims to facilitate a speedy recovery after an event, supported by contingency planning such as emergency response planning and related investments,” Zhang said. He explained that emergency relief and financing the reconstruction effort following catastrophic events like Hurricane Dorian is a key responsibility of the global community.

Minister Oliver Joseph among the delegates at Ninth Caribbean Forum

Financial resilience, the IMF Deputy Managing Director said is built based on fiscal buffers and using pre-arranged financial instruments to protect fiscal sustainability and mange recovery costs. He disclosed that the IMF has recently increased access to both its Rapid Financing Instrument and to the Rapid Credit Facility to 50% of quota per year and 100% of quota on a cumulative basis.

Speaking about improving tax policy, Zhang said that all Caribbean countries face the challenge of how to maintain a tax system that is competitive, while also raising adequate revenue. “In the regional context, avoiding a race to the bottom could provide substantial collective benefits,” he said.

Zhang also revealed that recent work by IMF staff found that greater intraregional trade and mobility of people and capital could generate significant macroeconomic benefits and reminded the participants that deeper economic integration within the Caribbean has been a priority since the establishment of Caricom in 1973, but progress has been limited. He recommended actions that can have positive impact on trade as a step going forward. “One example would be reducing non-tariff barriers and trade costs stemming from the absence of harmonised customs laws. Another would be removing legal restrictions that constrain the free movement of people and capital,” he said.

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Caribbean & World

RBC announces sale of Eastern Caribbean banking operations

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Royal Bank of Canada (RY on TSX and NYSE) today announced it has entered into definitive agreements to sell all banking operations in the Eastern Caribbean to a consortium of indigenous banks within the region.

The transaction is subject to regulatory approval and other customary closing conditions and is expected to be finalised in the coming months.

“Consistent with our strategy of being a competitive leader in the markets where we operate, RBC is always evaluating opportunities for our business. Earlier this year, we were approached by a consortium of indigenous banks with their proposal to acquire all RBC Eastern Caribbean operations,” said Rob Johnston, Head, RBC Caribbean Banking. “After a review of our operations and strategy, we determined this opportunity was a good decision for the long-term future success of RBC Caribbean, and also, that it aligned with our vision to help our clients thrive and communities prosper,” he said.

The sale encompasses the branches of Royal Bank of Canada in Antigua, Dominica, Montserrat, St Lucia, and St Kitts and Nevis, as well as regional businesses operating under RBC Royal Bank Holdings (EC) Limited in Nevis, Grenada, and St Vincent and the Grenadines. Collectively, these operations are referred to as “RBC Eastern Caribbean”. The consortium of five financial entities purchasing includes 1st National Bank of St Lucia, Antigua Commercial Bank Ltd, National Bank of Dominica Ltd, the Bank of Montserrat, and Bank of Nevis Ltd.

Johnathan Johannes, Managing Director, 1st National Bank of St Lucia, shared, “We formed the consortium for the express purpose of expanding the scale of the locally-owned financial entities in the Eastern Caribbean Currency Union. This transaction gives us the size and scale to play a more active role in the development of our respective countries. We see this transaction as the first step in achieving even greater synergies, efficiencies and cross-territory marketing opportunities.”

“RBC has operated in the Caribbean for more 100 years – longer than we have been in many parts of Canada. We remain committed to the future of the Caribbean and to a vision of digital innovation that transcends traditional services,” said Johnson. “This transaction will allow us to realign and focus our strategy on Caribbean markets where we can achieve that vision most successfully.”

“Self-determination is the highest level of empowerment – and the indigenous banks acquiring this business will now have an increased opportunity to influence the development of their communities,” said Johnston.

Johannes added, “And speaking on behalf of the local banks, we embrace and eagerly anticipate that opportunity.”

The consortium was advised by PwC (JA), led by Wilfred Baghaloo, who added, “this transaction demonstrates that Caribbean countries and businesses have the capacity and capability to come together when the circumstances are right.”

Financial terms of the transaction were not disclosed. RBC will release its first-quarter 2020 results and host an earnings conference call on 21 February 2020.

RBC

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Caribbean & World

Diversion of traffic to facilitate road closure Moliniere

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The general public is advised that the Ministry of Infrastructure Development, Public Utilities, Energy, Transport and Implementation in collaboration with the Traffic Department of the Royal Grenada Police Force (RGPF) has made alternative traffic arrangement for the Western Main Road Corridor, Moliniere area.

The diversion of traffic will be as follows:

  • Effective Friday, 13 December from 7 am, heavy trucks will not be allowed to use the Western Main Road. All heavy trucks and trailers are advised to use the Eastern Main Road and other alternative routes. The RGPF will issue an advisory in that regard.
  • Effective Monday, 16 December 2019 from 7 am, all other vehicles are advised to use the alternative routes as specified below.
    • Mt Moritz Concrete Road – to facilitate the traffic coming from St John, St Mark and St Patrick towards St George.
    • Jones Road to facilitate the traffic coming from St George towards the Western side.

This arrangement is made to facilitate geotechnical and engineering studies and design work on the road section between Mt Moritz junction and Moliniere. This intervention is urgently required to address the land slippage in that area.

The general public is advised that the diversion of traffic will be in effect until further notice as the ministry endeavours to enhance road safety in the area. The studies will commence in the coming weeks. The kind cooperation of homeowners in the area and the motoring public is anticipated.

The ministry apologises for any inconvenience.

For further information, please contact Najar Andall, Chief Technical Officer (Ag) and or Merina Jessamy, Permanent Secretary at 440-2271.

Ministry of Infrastructure Development

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TAMCC College Council $1.75 million increment payment offer

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11 December 2019: The industrial actions at the T A Marryshow Community College (TAMCC) is in now in its sixth week and coincide with the end of semester examinations and the advisement on course selection for the next semester registration, that will prepare students to meet the academic requirements for their programme.

The council anticipated this critical juncture in the lives of students, made an offer on 6 December 2019, which was rejected by both the Public Workers Union (PWU) and the Grenada Union of Teachers (GUT), as such, the industrial action continued.

In recognising the negative effects the continuation of the industrial actions is having on students, the council, with limited resources, made a new offer today (11 December 2019) of $1.75 million, with the hope that the unions will study and accept it, so that negotiations can continue towards a speedy settlement.

The council is committed to the payment of the increments in question and all members of the council (long-standing and new) are fully aware of the devastating effects it will have on national development if not properly managed.

The TA Marryshow Community College was established on 1 July 1988 to provide accessible quality tertiary education and training opportunities in the tri-island state of Grenada, Carriacou and Petite Martinique. Its primary purpose is to help individuals achieve their personal and professional goals, and to effectively respond to the changing needs of the national, regional and global communities.

Augustine Vesprey, Interim Chairman, TAMCC

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