Many economies in the Caribbean region have been caught in a low growth–high debt trap for decades. Debt has been built up over the years through large fiscal deficits, the costs associated with natural disasters, public enterprise borrowing, and off-balance-sheet spending, including for financial sector bail-outs. High levels of debt have, in turn, had a negative impact on growth, notably because high debt contributes to macroeconomic uncertainty and because the high cost of debt service reduces the fiscal space for investing in human and physical infrastructure that would support growth.1