Formidable challenges threaten small states, says St Kitts PM
Thursday, September 30, 2004
BASSETERRE, St. Kitts: St. Kitts and Nevis
Prime Minister and Minster of Finance, Dr. Denzil Douglas said Tuesday that
the global economic system continues to throw up new and extremely formidable
challenges to small states that quite often threaten the very survival of such
nations. He told delegates to a Meeting of
Ministers of Finance from the 53-nation Commonwealth being held in St. Kitts,
that the countries of the Organisation of Eastern Caribbean States (OECS),
which all have relatively open economies and, “the volumes of trade,
investment and tourist arrivals have swayed back and forth in response to the
uncertainties and gyrations in the international economy, especially in the US
economy.” “The new trading regimes such as
the World Trade Organisation (WTO), the Financial Action Task Force (FTAA) and
COTONOU arrangements have not helped us in combating these problems. Instead,
they have adversely affected our export prospects and threaten to undermine
the already slender revenue base of our economies. These problems are being
exacerbated by the fact that our currency is pegged to the US dollar and the
misalignment of major currencies in recent years has been a major source of
concern for us here in this part of the world,” said Prime Minister Douglas.
He said that the geopolitical climate and the impact of terrorism have high
explicit and implicit costs for small countries. He cited the costs of
potential negative impacts on the tourist industry, the major foreign exchange
earner and the increase in the price of oil, the major import commodity.
“The explicit cost of increasing the level of security at our airports and
harbours, and of putting regulations in place to combat terrorist financing
and money laundering, also increase the huge burden that small islands states
must now bear. Of course, it can be argued that all countries – large and
small - must incur such costs, but these costs include a huge fixed component
that does not vary with the size of the country so that the burden borne by
small states is grossly disproportionate to size and population,” said Prime
Minister Douglas.
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