sir k dwight venner : the eccu economic review 2005 presentation by sir k dwight venner, governor of the eastern caribbean central bank, at the eccb headquarters, st. kitts, 12 january 2006. * * * good evening fellow citizens of the eastern caribbean currency union on behalf of the monetary council, board of directors, management and staff of the eastern caribbean central bank, i bring you greetings and best wishes for the new year. i welcome this opportunity, once again, to address you on the economic performance of the currency union during the past year, and to share with you the bank's views on the prospects for this year. the year 2006 will be one of the most defining periods in the lives of the people of the oecs and the wider english speaking caribbean. the reason for this is simple. it lies in the wide variety and great intensity of the challenges we will face as very small states in a rapidly changing regional and international environment. there will be tremendous challenges for us in how our political, economic and social institutions exercise their capacity to respond to new and unexpected circumstances in a global environment, in which each national entity places its interests before those of others. in fact, recent circumstances, most notably the negotiations on access for our bananas into the european union clearly indicate that our small size does not evoke much sympathy in international economic relations. this should make it abundantly clear to us that we need to proceed into the future with an increased sense of realism, objectivity and clarity. it is, therefore, perhaps more than symbolic that in 2006 we will be celebrating the 25th anniversary of the signing of the treaty of basseterre. this treaty of cooperation between our countries has been in very large part responsible for their survival and growth over the intervening years. it is also important to note that we have been working on revisions to the treaty, and that these will reflect our considered responses to the changes which have been taking place in the domestic and external environments. the year 2006 will witness some very specific events and circumstances which will require new and strategic responses from us as individuals, families, business firms, trade unions, civic organisations, countries and as a closely connected group of countries, that is the oecs. the major challenges in the international arena will come from the new trading regimes which are now being negotiated under what is called the doha round. the major issues involved would be liberalisation in the trading of agricultural commodities and services. these will have a major

success of this arrangement. the csme is a vital stepping stone for our strategic integration into the international economy, but we must be able to establish and assert our specific interests at the level of the csme, so that these interests could be robustly represented beyond the region and into the international arena. economic development is not an end in itself, but is reflective of improvements in the economic, social and human conditions within nations and across the international community. the international community through the united nations, and as expressed in the millennium development goals, has taken responsibility for improving the human condition on planet earth. this, however, does not absolve individual nations and communities within nations from making efforts on their own behalf. in fact, the whole concept of development means increased self reliance and increased choices for individuals, communities and nations. for the individual citizens of the oecs this means acquiring education, skills and attitudes which makes us marketable in a global economy. it also means acquiring information that will allow us to make important economic and political choices about our own circumstances, and those of our countries and region. we must be able to understand and contribute to the policy choices that our governments have to make, and to participate in the formation of public opinion on important issues. our private sector must acquire the managerial and technical skills, as well as the innovative impulses to participate in business ventures within their own countries, the currency union and beyond. the bottom line for the private sector must be the production of the highest quality products, whether commodities or services, at the lowest cost, with excellent customer service. moreover, with the removal of trade and other restrictions, the domestic market will not be easy to distinguish from the international, and so to survive all standards of competitiveness will have to be international. our governments are faced with some very difficult decisions and choices which they cannot make effectively without the inputs of the citizens and the private sector. this is the nature of our liberal democratic systems which have served us well over these years. the questions and issues revolve around responses to the fiscal and debt challenges confronting very small states ; the high price of oil which affects the entire economy ; the provision of the appropriate enabling environment to facilitate private sector growth, investment and productivity ; the provision of social and administrative services to the community at least cost and highest value ( including social safety nets for the very poor and the indigent ) ; the maintenance of law and order to protect lives and property ; the capacity to negotiate with third