STATEMENT BY THE GOVERNOR

FOR ANTIGUA AND BARBUDA

DR. THE HONOURABLE ERROL CORT

Board of Governors Meeting Caribbean Development Bank
Tobago
May 12-13

Madame Chairman, Fellow Governors, Mr. President, Directors and Officers of the Bank, Observers, Guests, Distinguished Ladies and Gentlemen:

On behalf of the Government and People of Antigua and Barbuda, I would like to express our deep appreciation for the warm hospitality extended to our delegation by the Government and People of Trinidad and Tobago, and by the Officers of the Caribbean Development Bank (CDB).
I am truly heartened by the hard work and dedication that has culminated in the successful hosting of this the Thirty-Fourth Annual Meeting of the Board of Governors of the CDB.

I also wish to take this opportunity, Madame Chairman, to convey, in particular, best wishes from our Prime Minister, the Honourable Baldwin Spencer, to the Prime Minister of Trinidad and Tobago and his Government, to other Heads of Government, to Governors, to the President and Officers of the Bank and to the People of this outstanding Republic.

On a sad note, Madame Chairman, the Government and People of Antigua and Barbuda convey our condolences to the Government and People of Dominica on the passing of the late Prime Minister, the Hon. Pierre Charles, who, I am advised, served with distinction in his capacity as a Governor of the Bank.

Madame Chairman, Antigua and Barbuda is at the crossroads in our Nation's socio-economic and political development, having only fifty (50) days ago changed its government, which government had hitherto ruled for an unbroken period of twenty-eight (28) years. It is most critical that, at this juncture, we make the right decisions in the overall interest of the People of Antigua and Barbuda, and we must seek to implement these decisions decisively.

The New Administration, under the distinguished leadership of Prime Minister, the Honourable Baldwin Spencer, was ushered into government on a platform which had as its main focus "An Agenda for Change": Change of approach in the management of public finances; Change in the culture of decision making; and Change in the general approach to governance. Hence, the tenets of Accountability, Transparency and Good Governance were the building blocks upon which the New Administration promoted itself, and upon which the present Government shall reconstruct a new Antigua and Barbuda that will fully embrace the practice of prudent fiscal management of public resources. In this regard, my Government is committed to pursuing the requisite adjustment measures that will effectively correct the existing chronic fiscal imbalance.

Madame Chairman, my country's protracted record of debt default will be given priority attention by the New Administration. We are very cognizant of the fact that the accumulation of arrears on the external debt has adversely affected my country's creditworthiness and its ability to access external funding for the Public Sector Investment Programme (PSIP). We are in the process of formulating a strategy with respect to debt management and, in this regard, we will very shortly be communicating with our creditors with a view towards negotiating arrangements that would see Antigua and Barbuda return to timely and sustainable debt servicing.

Madame Chairman, there is much to be done, but we are confident that with the assistance of friendly institutions such as the Caribbean Development Bank, and the aid and good will of countries with whom we have had a longstanding association, we shall succeed.

Madame Chairman, there are a number developments that are unfolding at this time, some of which we note with concern and others which we applaud. Given the serviced-based nature of our economy, with a strong emphasis on tourism, the rising trend in oil prices is the source of much anxiety. Should this trend continue, the likely impact on consumer prices will be significant. Perhaps, Madame Chairman, the time is opportune to look afresh and anew at alternative forms and/or sources of energy in an effort to minimize the effects from future volatility in oil prices.

Madame Chairman, we further note the swiftness of the march towards globalization and whilst we are hopeful that the process will eventually lead to higher living standards and an increase in economic opportunities for our people, we remain concerned over the timeframe during which these benefits shall accrue. In an essay entitled "Globalization's Missing Middle", by Geoffrey Garrett, the writer concluded:
"The benefits of market integration are more than merely theoretical, but, on the ground, they have also been considerably less than was promised. The losers - poor people in the west and middle-income countries - are caught in the crossfire between the stringent demands for success in the knowledge economy and the harsh realities of competing in low-skill production against countries where people will work for much less but can do at least as good a job. This is globalization's missing middle."

According to Garret, middle income countries like Antigua and Barbuda are likely to struggle in the wake of the globalization movement. In addition, our prospects are made more complicated and our vulnerabilities are further laid bare by our small size. It is for reasons such as these, Madame Chairman, that my Government intends to place special emphasis on human resource development, as we are ever mindful of the fact that our citizens and residents are our chief resource and represent the intellectual capital that will be employed in our quest to champion any obstacles of globalization.

Madame Chairman, we also note the strides towards the realization of the Caribbean Single Market and Economy (CSME), and the advancement in the work towards the establishment of Caribbean Court of Justice. We are committed to playing our part in the deepening of the integration process and to ensuring that the CSME becomes fully operational.

Madame Chairman, there must and will be continuous dialogue between my Government and civil society as we move our country along a chosen developmental path. In this regard, my Government pledges its commitment to a continuous process of consultations with civil society through the establishment of the National Economic and Social Council as a main pillar in a participatory democracy. Madame Chairman, in light of the advanced stage of Haiti's application for membership to the Bank, it would be remiss of me if I did not mention that Antigua and Barbuda is concerned over that country's social and economic turmoil and the ensuing hardship that is currently placed on the people of that country. We are also resolute in the view that all efforts must be directed toward ensuring that the principles of democracy are practiced to the fullest extent in Haiti.

Madame Chairman, I turn briefly to the performance of the Bank as captured in the Financial Statements as at December 31st 2003. I note with commendation the generally improved performance of the CDB in a number of areas. With respect to loans, grants and equity, gross approvals in the amount of $197.5 million as at December 2003 represent a significant improvement over the same period for 2002, where the amount was $128.8 million. In terms of disbursements, the period under review registered $122.6 million as compared to $119.0 million for the previous year. Antigua and Barbuda welcomes the progress made in the rate of approval and disbursements, and sees this trend as the CDB's positive and progressive response to calls from Borrowing Member Countries (BMCs) for the institution to be more client-friendly.

In respect of the Ordinary Capital Resources (OCR), we observe with satisfaction that operating income for 2003 was significantly ahead of that recorded for the prior reporting period: $20.0 million as compared to $15.6 million in 2002. In this regard, we applaud the Bank for its discipline in containing administrative expenses in light of its increased activity as evidenced by the increased number of loan approvals and rate of disbursements. We further wish to praise the Bank for successfully implementing a borrowing strategy that has led to a reduction in the cost of funds by $2.8 million, thereby giving a further boost to operating income. Congratulations are also in order for the effective manner in which the Bank managed its OCR loan portfolio, thus resulting in there being no non-accruing loans at the end of fiscal year 2003.

I would like to embrace this opportunity, Madame Chairman, to thank the CDB for the patience and good will it has exercised towards Antigua and Barbuda over the past year, as my country's fiscal position deteriorated even further over the previous fiscal year, with adverse effects on our commitments to the Bank. I am pleased, however, that as at the end of the last quarter, Antigua and Barbuda's loan accounts with the Bank are up-to-date, and it is my Government's intention to keep the said loan accounts current, as we endeavour to act in a responsible manner with respect to our future financial obligations to the Bank and to other creditors.

Madame Chairman, Antigua and Barbuda commends the CDB for the support that it continues to give in a number of very important areas: HIV/AIDS; human resource development, public sector reform; and institutional development in order to facilitate micro businesses, to name a few. Indeed, these are some of the very areas to which Antigua and Barbuda must effectively address as we review and restructure our socio-economic programme. Madame Chairman, I take this opportunity to signal to the Bank that Antigua and Barbuda would be most appreciative in receiving the expertise of the Bank in addressing some of the aforementioned areas, as my Government seeks to transform the economy of our twin-island state. I also take this opportunity to thank the CDB for its commitment to Antigua and Barbuda, as evidenced by a number of projects that are ongoing, including the Basic Education Project and the Airport and Seaport Enhancement Project. These two projects are important components of our Capital Development Programme.

Madame Chairman, the Caribbean Development Bank has established itself firmly as a premier developmental institution in the Caribbean and beyond. Antigua and Barbuda is satisfied that the Bank has remained true to its mission and its purpose, and we challenge the institution to be even more creative in finding ways to assist its BMCs in these difficult times. We are confident that this challenge is not beyond the reach of this institution, for some of the best, brightest and most dedicated Caribbean minds are assembled here.

In concluding, I wish to congratulate once again the President, his management team and members of his staff for their superior effort in fiscal year 2003, and I thank them for the efficient and professional, yet friendly manner, in which these proceedings are being conducted.

Thank you Madame Chairman.