IMF Deputy Man­ag­ing Di­rec­tor Tao Zhang yes­ter­day warned that low oil prices have ma­jor im­pli­ca­tions for the Caribbean.

In the open­ing ad­dress at the Caribbean Fo­rum, joint­ly host­ed by the IMF and the T&T Gov­ern­ment at the Hy­att Re­gency in Port-of-Spain, he not­ed that com­mod­i­ty ex­port­ing coun­tries like T&T and Suri­name had al­ready been hit hard. How­ev­er, he as­sured that the IMF is "deeply com­mit­ted to help­ing Caribbean coun­tries nav­i­gate these chal­lenges."

Zhang said the low­er oil prices have ben­e­fit­ed many of the re­gion's oil im­porters and Ja­maica had elim­i­nat­ed much of its dou­ble-dig­it cur­rent ac­count deficit in just three years, while Guyana is ex­pe­ri­enc­ing its first ex­ter­nal cur­rent ac­count sur­plus in decades.

Prime Min­is­ter Dr Kei­th Row­ley, com­ment­ing on the sit­u­a­tion fac­ing the re­gion, said: "The Caribbean will not be able to achieve faster eco­nom­ic growth and sus­tain­able de­vel­op­ment un­less the prob­lem of debt over­hang is ad­dressed in a com­pre­hen­sive way."

The is­sue was fur­ther ex­plored dur­ing the first pan­el dis­cus­sion at the fo­rum where the fo­cus was on growth, com­pet­i­tive­ness and oil prices. Par­tic­i­pants dis­cussed how to re­spond to a glob­al out­look framed by low but sta­ble com­mod­i­ty prices, which af­fects com­mod­i­ty im­porters and ex­porters dif­fer­ent­ly, and a sub­dued re­cov­ery in ad­vanced economies that re­mains a drag on the Caribbean tourism sec­tor.

On the plus side, low in­ter­est rates in ad­vanced economies could help coun­tries in the re­gion to re­duce their cost of fi­nanc­ing. Ja­maica, Grena­da, and St. Kitts and Nevis have achieved im­por­tant re­sults re­duc­ing their fis­cal and ex­ter­nal vul­ner­a­bil­i­ties over the last few years. Re­gion­al chal­lenges in­clude sig­nif­i­cant ex­po­sure to cli­mate change and nat­ur­al dis­as­ters, as ev­i­dent from Hur­ri­cane Matthew most re­cent­ly, and the need to im­prove fi­nan­cial sound­ness and en­sure the re­silience of do­mes­tic fi­nan­cial sys­tems.

On the is­sue of loss of cor­re­spon­dent bank­ing re­la­tion­ships, an ur­gent is­sue for the Caribbean, it was not­ed that ef­fec­tive im­ple­men­ta­tion of An­ti-Mon­ey Laun­der­ing and Com­bat­ing Fi­nanc­ing of Ter­ror­ism (AML/CFT) re­mains a chal­lenge in many coun­tries, de­spite progress in adopt­ing some in­ter­na­tion­al stan­dards.

Par­tic­i­pants not­ed that tech­nol­o­gy can help re­duce com­pli­ance costs,one of the key fac­tors con­tribut­ing to loss of cor­re­spon­dent bank­ing re­la­tion­ships, es­pe­cial­ly in small­er ju­ris­dic­tions. Banks have al­ready in­vest­ed sig­nif­i­cant re­sources in­to bet­ter tech­nol­o­gy to in­crease trans­paren­cy, low­er costs, and pro­mote in­for­ma­tion shar­ing, while ad­dress­ing AML/CFT con­cerns.

"We be­lieve a so­lu­tion to this is­sue re­quires di­a­logue be­tween coun­tries, reg­u­la­tors and banks, and in­creased in­for­ma­tion ex­change," Zhang said in his open­ing re­marks. "This can help clar­i­fy reg­u­la­to­ry ex­pec­ta­tions, build trust, fa­cil­i­tate ca­pac­i­ty build­ing, and high­light best prac­tices."