Sir Dwight: ‘fate of Eastern Caribbean economies severely impacted by the 2008-2009 financial crisis which originated in the financial sector of the United States’

Sir K Dwight Venner

BASSETERRE, ST. KITTS, FEBRUARY 24TH 2012 (CUOPM) – Governor of the Eastern Caribbean Central Bank (ECCB), Sir K. Dwight Venner said Thursday that the global economy to which the fate of the economies of St. Kitts and Nevis and the other member states of the Eastern Caribbean Currency Union (ECCU) is intimately linked, has been severely impacted by the 2008-2009 financial crisis which originated in the financial sector of the United States.

“A prolonged decline in demand triggered by low rates of growth, high levels of unemployment and sovereign debt, fiscal imbalances and financial sector fragility experienced by the United States, the United Kingdom, Japan, and the European Union; dramatic upheavals in the socio-political climate of the Arab Spring in which waves of protest in the Middle East by a younger generation have seen the overthrow of several authoritarian regimes and continued pressure on others to accept democratic principles and institutions,” said Sir Dwight as he presented the

2011 Economic Review of the Eastern Caribbean Currency Union (ECCU).

The Central Bank Governor noted that in the midst of this economic and financial turbulence which has led to political and social unrest in the advanced countries, one can observe some emerging changes in the rest of the world.

“A new group of emerging economies led by China is coming to the fore and exercising an increasing influence over the global economy. The basic capitalist model of free market forces is being challenged by a new and more potent form called state capitalism which is being employed by the emerging economies.

Countries with important commodities and other natural resources have made significant progress by satisfying the demand of the Chinese economy which requires such raw materials to support their economic growth,” said Sir Dwight, adding that countries with large populations which provide significant domestic markets for consumer and capital goods are attracting an increasing share of foreign direct investment.

He said that the potential and actual poles of growth in the global economy are now the so-called BRICs, that is, Brazil, Russia, India and China. In addition, many countries in Latin America and Africa are benefitting from the raw materials boom. A number of countries such as Indonesia, Vietnam, Nigeria, and Turkey, are picking up in growth performance.

Sir Dwight said such factors will continue to affect the development of the economies of the Eastern Caribbean, governance structures and societies.