Title: EXTERNAL DEBT AND ECONOMIC GROWTH IN THE COMMONWEALTH CARIBBEAN
Abstract: This chapter explores recent developments in the external debt and economic growth performance of countries that comprise the Commonwealth Caribbean. It reviews recent growth performance, describes the trends and structure in external debt, and discusses the implications of debt flows for current and future economic growth. The English-speaking Caribbean countries, which comprise the Caribbean Community, fared poorly in the international economy during the 1970s. Their growth performance and their balance-of-payments performance were dismal. Against a backdrop of economic stagnation and recession, nominal external debt flows expanded, though these were partly eroded by import price inflation. Most of the external debt flows were official, including multilateral, sources and were concessional. External debt helped to moderate sizeable domestic and foreign exchange resource gaps. The growth contribution, however, was vitiated by inefficiency in debt use in at least a few countries. The current balance of payments crises and the requirements of structural adjustment intensify the need for external debt finances. The deficiencies of commercial debt in the context of the payments problems and the nature of structural adjustment and the limited access of most of these countries to commercial funds imply that official debt flows are not only preferable but are also the more likely source of financing. From this perspective, developments in the international arena of bilateral aid and multilateral financial institutions are of crucial importance to the English-speaking Caribbean. This is not to deny the significance of purely regional initiatives at financial cooperation for a better Caribbean, but regional efforts alone are not sufficient.
Publication Year: 1983
Publication Date: 1983-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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Cited By Count: 1
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