GUYANA’s  Minister of Finance Dr. Ashni Singh yesterday co-chaired a UN round table on “Reducing Debt Vulnerability, Managing Inflation/Deflation”, while attending the United Nations General Assembly High Level Thematic Debate on the State of the World Economy. The Minister, in his opening remarks, stated that the current crisis has seen many large and widely diversified economies of the world grappling with the challenges of unsustainable debt burdens, the need to restart growth in the face of fiscal constraints, and ongoing market volatility, inducing price uncertainty and undermining predictability in investment decisions.
He pointed out that the magnitude of these challenges and the elusiveness of lasting solutions are multiplied many fold in the case of small vulnerable economies, such as in the Caribbean.
He reiterated that the Region has some of the world’s most severely indebted nations, rendering fiscal space for counter-cyclicality nonexistent. This situation is further exacerbated by the natural and structural impediments to productive sector diversification, and the close link between the Region’s current dominant productive sectors and the fortunes of large neighbouring economies, as reflected in Caribbean tourism’s close dependence on North American disposable incomes.
As a result, opportunities for growing the economy out of fiscal stress are extremely limited.
The minister also pointed out that imported price volatility, such as for key commodities as oil and food, place stress on external balances and undermine the predictability of investment flows.
Against this background, Minister Singh stated that the United Nations had an important role to play in analysing the challenges faced by small vulnerable economies and, moreso, in helping to craft viable solutions.
He suggested that such efforts can manifest themselves in the definition of a new development model or paradigm that takes into account the realities and challenges of smallness, the definition of trade and other multilateral arrangements which recognise the implications of smallness, and the development of instruments to be applied by the international financial institutions to help small vulnerable economies return to debt sustainability.
He urged the United Nations to avoid the peril of focusing solely on large countries of systemic economic importance, to the exclusion of small vulnerable countries and economies.
Along with Minister Singh, the roundtable was co-chaired by the Minister of Finance of Morocco Mr. Nizar Baraka, and the Deputy Chairman of the Indian Planning Commission Dr. Montek Singh Ahluwalia.
Among the panellists at the round table were Professor Jeffrey Sachs of Columbia University, Dr. Supachai Panitchpakdi Secretary General of UNCTAD, and retired US Senator Alan Simpson, who co-chaired in 2010 the US National Commission on Fiscal Responsibility.
Minister Ashni Singh is currently attending the UN High Level Debate as a member of the Guyana delegation led by President Donald Ramotar, who addressed the plenary session of the debate earlier yesterday.