Front Matter

Front Matter Page

© 2011 International Monetary Fund

January 2011

IMF Country Report No. 11/32

Eastern Caribbean Currency Union: Selected Issues

This Selected Issues paper for the Eastern Caribbean Currency Union (ECCU) was prepared by a staff team of the International Monetary Fund as background documentation for the periodic regional surveillance of the ECCU. It is based on the information available at the time it was completed on September 21, 2010. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the governments of the ECCU or the Executive Board of the IMF.

The policy of publication of staff reports and other documents by the IMF allows for the deletion of market-sensitive information.

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Front Matter Page

INTERNATIONAL MONETARY FUND

EASTERN CARIBBEAN CURRENCY UNION (ECCU)

Selected Issues

Prepared by S. Acevedo, J. Kang, A. McIntyre, K. Nassar, S. Ogawa, R. Perrelli, M. Tashu, N. Thacker, A. Viseth (all WHD), A. Simone, S. Tareq (FAD)

Approved by Western Hemisphere Department

September 21, 2010

Contents

  • I. Growth in the ECCU: What Went Wrong and Can It Be Fixed

    • A. Introduction

    • B. ECCU’s Growth Performance in an International Perspective

    • C. Explaining the Declining Trend in Growth in the ECCU

    • D. Tourism’s Contribution to Growth in the ECCU

    • E. Tourism and Growth Volatility

    • F. ECCU Tourism Competitiveness vis-á-vis the Caribbean

    • G. Debt and Its Impact on Growth.

    • H. Conclusions

    • Appendix 1

    • Appendix 2

  • Figures

    • 1. Contributions to Growth, 1970-2007

    • 2. Small Islands: Tourism and Growth, 1981-2007

    • 3. Caribbean: Tourism Competitiveness

  • Tables

    • 1. ECCU: Growth Accounting, 1970-2007

    • 2. ECCU: Output Growth and its Components: Ratio to Barbados Values, 1970-2007

    • 3. Tourism and Growth Estimations

    • 4. Debt and Growth Estimations

    • 5. Countries Included in the Samples

  • References

  • II. Public Debt in ECCU Countries

    • A. Introduction

    • B. Overview of Public Debt in ECCU

    • C. What Contributed to the Debt Accumulation?

    • D. How was the High Debt Sustained?

    • E. Conclusion

    • Appendix Table 1 ECCU: Total Public Sector Debt Accumulation by Components

    • Appendix Figure 1 Debt Decomposition

    • References

  • III. Rationalizing Public Expenditure in the ECCU

    • A. Introduction

    • B. Evolution of Public Finances

    • C. Government Compensation and Employment

    • D. Social Security

    • E. Health

    • F. Education

    • G. Social Assistance

    • H. Parastatal Entities

    • I. Public Financial Management

    • J. Capital Spending

    • K. Conclusion

  • Tables

    • 1. ECCU: Selected Economic and Financial Indicators, 1990-2009

    • 2. ECCU: Central Government Expenditure, 2006-10

    • 3. Comparison of Key Parameters of Pension Systems Across the Caribbean

    • 4. Health Outcomes and Spending Across the ECCU and in Small Island Economies

    • 5. Education Expenditure in ECCU Countries

  • Figures

    • 1. ECCU: Revenue and Expenditure, 1990-2009

    • 2. Wage Bill as a Share of Total Revenue, 2009

    • 3. St. Lucia. Number of Students and Teachers in Primary and Secondary Education

    • References

Eastern Caribbean Currency Union: Selected Issues
Author: International Monetary Fund