charts 12 and 13 ) let me stress that while the direct spillovers from the global financial turmoil to the regional economies appear to have been contained so far, i am by no means suggesting that the region will not feel greater effects as time goes by. borrowing from the new jargon, i do not believe that the region ( as indeed, most developing countries ) has de - coupled or will continue to be relatively un - affected by the global turmoil. as i noted earlier, growth in the regional economies will be slower than the average for the past few years, largely because of the financial turmoil and some related factors such as the soaring international oil prices. moreover, policy makers throughout the region will concede that their economies are facing increased uncertainties and major risks. there is no doubt that a protracted and deep us downturn combined with a slowdown in the eu, will surely affect tourism and remittances and other regional exports. the impact of this could be compounded by monetary tightening to address inflationary pressures. in turn, a sharp regional growth slowdown could threaten the stability of the financial system. so we are not out of the woods. what does all this mean for us in terms of economic management? because of the uncertainty, countries in the region should : ( i ) further consolidate their fiscal positions. given trinidad and tobago ’ s fortunate reserve endowment there is a strong case for increasing national savings. ( ii ) continue to reduce their public debt, particularly foreign debt. our external debt is pretty low and we should try to keep it that way ; and ( iii ) continue to improve its regulatory standards and adopt international best practices in all areas – in accounting, auditing, transparency etc. as i said, we are not yet out of the woods. chart 1 international oil and gas prices natural gas - henry hub ( right axis ) us $ / bbl oil - wti ( left axis ) us $ / mmbtu chart 2 real gdp growth – selected caribbean economies ec currency union 2008p jamaica bahamas barbados per cent chart 3 growth in the caribbean and advanced economies per cent united states euro area caribbean chart 4 recent changes to growth outlook current projections difference from january 2008 projections world 4. 9 3. 7 3. 8 - 0. 5 - 0. 6 advanced economies 2. 7 1. 3 1. 3 - 0. 6 - 0. 8 emerging and developing economies 7. 9 6. 7 6. 6 - 0. 2 - 0. 4 caribbean 4.

##cede on hindsight that : ( i ) it lacked sufficient appreciation of the workings of international capital markets and as such underestimated the speed with which funds would flow in and out of open capital markets ; ( ii ) with its excessive focus on fiscal policy, it paid inadequate attention to the importance of the soundness of financial systems and the propensity that these had for spreading crises ; ( iii ) it showed excessive zeal in encouraging countries to open up to short term foreign capital, without recognizing that the volatility of these flows could have devastating economic effects ; ( iv ) it could have put more emphasis on poverty alleviation and the need for social safety nets in periods of adjustment ; and ( v ) it needed to improve its understanding of institutions and political dynamics in member countries. but so much for who was to blame and why. what has changed in the way in which the bretton woods institutions manage the global system? in principle, one could separate the range of reforms into two parts. you would recall my saying that from the fund ’ s view the main justification for reform was the fact of recurring global crises - first mexico, then east asia, then russia. in these circumstances, the fund took the view that the first responsibility of reform was to put in place a system that offered hope for avoiding crises and of resolving them quickly when they occurred. the second set of reforms has had more to do with how the fund operates - its internal procedures and its relationship with its members. let ’ s first deal with the reforms to the international financial system - these come under a grandiose title of “ the new global financial infrastructure ”. ( i ) in view of the evidence that a weak financial sector is an invitation for financial crisis, which invariably has an extremely high social cost, the imf undertook to make the focus on financial sector soundness to be a main pillar of its operations both in developed and developing countries. now all countries - and we here in trinidad and tobago are no exception - are investing significant resources in trying to identify vulnerabilities in their financial systems and taking corrective action. the plan, here at home, to bring the insurance companies and pension funds under the authority of the central bank must be seen in that light. ( ii ) a second innovation to the system is the establishment of internationally - accepted standards and codes as “ rules of the game ” for all economies. thus, working with other international institutions, we now have codes of good practice for