The ECCB Boot Camp Experience

28th September, 2009

On January 15 – 16, 2009, the first joint meeting of the OECS Authority and the ECCB Monetary Council was held with the primary objective of developing a strategic and unified action plan to respond to the global financial and economic crisis. Out of this meeting, the idea of a “Boot Camp for Economic and Financial Adjustment in the ECCU” was developed to determine a coherent and internally consistent strategy to implement the ECCU Eight Point Stabilization and Growth Programme.

The Eight Point Stabilization and Growth Programme consists of the following programme areas:

1. Financial Programmes – To identify a consistent set of macroeconomic policies and the financing requirements to stabilize the economies and provide the impetus for growth;
2. Fiscal Reform Programmes – To develop fiscal regimes that are conducive to economic growth and development and are sustainable over the medium term;
3. Debt Management Programmes – To provide a structured approach to effective debt management consistent with fiscal sustainability;
4. Public Sector Investment Programmes – To provide a stimulus for growth and transformation of the economies;
5. Social Safety Net Programmes – To provide support for vulnerable groups;
6. Financial Safety Net Programmes – To facilitate the restructuring and recapitalization of the banking and insurance sectors and strengthening of the regulatory and supervisory regimes;
7. Amalgamation of the Indigenous Commercial Banks – To allow the sector to take advantage of economies of scale and scope, efficiencies in operations and increasing opportunities for more diverse banking services; and
8. Rationalization, Development and Regulation of the Insurance Sector – To streamline the size of the insurance sector and improve the regulatory and supervisory infrastructure for insurance companies.

During the two week “Boot Camp” which ran from September 7 – 16, 2009, representatives from member countries of the ECCU examined strengthening their approach to the first five points of the Eight Point Programme against the background of the OECS Economic Union project and the global economic and financial downturn. The delegation that represented Montserrat consisted of Mr. Albert Daley and Mr. Joseph Irish from the Ministry of Economic Development and Trade, and Ms. Siobhan O’Garro from the Ministry of Finance.

The intended scope of work for the “Boot Camp” was as follows:

1. The design of an implementation strategy for the first five points of the Eight Point Programme in a consistent, coherent and coordinated manner;
2. The identification of the administrative structures, coordination processes and associated resources for the efficacious implementation of the first five points of the Eight Point Programme;
3. Full articulation of the first five points of the Eight Point Programme within a consistent and credible financial and economic framework that ensures sustainability over the medium term; and
4. Full articulation of a framework for monitoring, evaluating and reporting on the Eight Point Programme at the national and regional levels.

This was done mainly through financial programming with the objective of stabilizing and transforming the ECCU economies via stabilization efforts, stimulus injections and structural reform. Each day, the representatives from the member states were organized into mixed groups to discuss the presentations that were given and address individual country experiences in relation to the topics presented to then make recommendations to take forward for developing and improving best practices.

Day One consisted of examining the structure of a sound financial programme. Presentations on statistics and the infrastructure needed to address the gaps in statistics management were given by the Deputy Director of the ECCB, Mrs. Hazel Corbin and Mr. Edwin St. Catherine, Director of Statistics in St. Lucia.

A representative from the International Monetary Fund (IMF) gave presentations on the basics of a financial programme and the administrative and technical requirements for managing a successful macroeconomic stabilization and adjustment programme. A delegate from Antigua and Barbuda presented their experience in formulating and monitoring a financial programme. He outlined Antigua and Barbuda’s experience in managing the administrative, technical and procedural requirements for the development and management of financial programmes; the challenges, obstacles and successes experienced; resource issues; the lessons learnt; and, the recommendations for countries preparing financial programmes.

At the end of the day, after the mixed syndicate discussions which followed the presentations, each country delegation was assigned the task of working on the baseline scenario of their financial programme. In these discussions, information was taken from the mixed syndicate discussions to provided clarification as to the way forward in implementing a sound financial programme.

On Day Two, wrap-up work on each country’s baseline scenario continued and was followed by presentations from the delegates. In the afternoon, a representative from the Caribbean Regional Technical Assistance Centre (CARTAC) gave a presentation on fiscal reform followed by a representative from Grenada presenting their experience in addressing fiscal reform. The delegate outlined Grenada’s approach to fiscal reform; the experiences they’ve had thus far regarding challenges, obstacles and successes; issues regarding resources; and, concluded with lessons they’ve learnt and suggested recommendations for the way forward.

The afternoon session continued with the countries finalizing their baseline scenario and commencing work on the active scenario of their financial programmes.

Day Three began with a representative from the World Bank giving a presentation on debt management strategy and debt management practices. This was followed by a presentation from the IMF on required institutional arrangements for effective debt management. A representative from St. Kitts and Nevis wrapped up the morning by presenting their experience in addressing managing debt in their country. The delegate highlighted the current debt management system in St. Kitts in terms of the institutional arrangements, debt strategies and the implementation and monitoring of the debt strategy; the challenges, obstacles and successes they’ve had in debt management; any resource issues; and recommendations for improving debt management.

In the afternoon, country work continued on establishing the active scenario of the financial programme examining a programme of economic measures and a sound fiscal policy framework.

On Day Four, the “Boot Camp” focused on the Public Sector Investment Programme (PSIP). Presentations were scheduled to be given by representatives from the Caribbean Development Bank (CDB), the European Union (EU), the IMF, the World Bank, the UK Department for International Development (DfID) and the United Nations Development Programme (UNDP). The presentations focused on the importance of linkages between the PSIP, a country’s medium term development plan and the budget. Financing options and eligibility criteria were also presented to the delegates.

A representative from St. Lucia gave a presentation on PSIP development outlining St. Lucia’s experience with the preparation and implementation of their PSIP; the reporting and monitoring mechanisms currently used; the challenges they’ve encountered; any deficiencies in the process; any issues with resources; and, recommendations for best practices.

The afternoon’s sessions consisted of examining PSIP development and the incorporation of a financially feasible PSIP into each country’s active scenario of their financial programme.

On Friday, the morning began with all of the countries presenting the first round of the active scenario of their financial programmes. Then, in the late morning, there was a video presentation of a live Regional Government Securities Market (RGSM) auction, in which St. Lucia was issuing 91-day Treasury bills. The delegates were exposed to this RGSM auction to get a first hand view of how governments can trade on the RGSM to secure additional funds if and when necessary.

In the afternoon, countries focused on administrative arrangements for building sustainable capacity within the various Ministries of Finance, and continued working on finalizing their consistent financial programmes.

The second week of the “Boot Camp” began with a video conference with Permanent Secretaries of Ministries of Social Transformation/Community Development and Divisions of Planning, along with Planning Officers and Budget Directors. Presentations on enhancing social protection frameworks were given by The World Bank and the OECS Secretariat. This videoconference was followed by a case study of St. Vincent and the Grenadines in which a representative presented issues in the context of St. Vincent’s social protection framework in relation to current practices, and the efficiency of the programmes currently being used. He concluded by giving recommendations for improvements in the following areas: policy development; administration of the programmes; targeting of beneficiaries; delivery of benefits; and, evaluation of the programmes.

Monday afternoon began with another videoconference, this occasion, for each country delegate to present updated versions of the active scenario of the financial programmes to their Financial Secretaries. The afternoon continued with country syndicate sessions in which the articulation of their country’s social protection framework was examined for incorporation into the financial programmes.

With the extensive discussions and presentations that took place over the six days of the workshop thus far, Tuesday was set aside for finalizing the financial programmes for consistency. Wednesday was the last day that the team members would work together to finalize the report that would incorporate the financial programme for presentation to the ECCB Board of Directors and Monetary Council. These presentations were given by each member state’s Financial Secretary who ultimately has the responsibility for their country’s financial programme.

By
Siobhan N. O’Garro
Financial Advisor
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