Tourism, investment could be affected by derisking – Antigua and Barbuda PM
Georgetown, GINA, July 06, 2016
CARICOM has resolved to address the threat of derisking on all fora to curtail the impact it will have on the region. “Derisk” refers to the process of removing or minimising dangers in financial operations.
Correspondent banking, in particular and the threat of derisking were on CARICOM’s agenda during the three-day meeting of the 37th Heads of Government Regular Meeting in Guyana.
Prime Minister of Antigua and Barbuda, Gaston Browne noted that derisking has fundamental implications for the trade in goods and services in the region. A stakeholders’ conference on the matter is scheduled for later this year.
Antigua and Barbuda’s Prime Minister, Gaston Browne
“To delink us from the national payment system is to literally plunge the people of the Caribbean into unemployment and poverty,” Browne added.
Prime Minister Browne also pointed out that investment into the region is also likely to be affected if derisking continues. “Foreign direct investment can’t come by way of cash that in itself is impermissible,” he stated.
There needs to be mechanisms to wire funds along with cheque settlement and electronic movement of funds are needed if the region is to develop. More particularly, the development of the investment and trade areas could be crippled if derisking is not addressed, Browne added.
Tourism is one aspect which Prime Minister Browne sees being affected by the loss of correspondent banking. “You may have some difficulties in which tourists may have problems making their payments if we cannot sell those transactions in the respective currencies of the countries,” Browne said.
It is fundamental that the region remains a part of the international payment system, Browne who holds responsibility for services in the region, said.
CARICOM is hoping to engage with correspondent banking officials, policy makers, central bankers and others to address the issues and appeal to correspondent banks “that there are some significant unintended consequences that could literally result in a degradation of living standards of Caribbean people.”
CARICOM is seeking equitable resolve of the matter while avoiding displacement.