occupying our attention which have implications for the pace and strength of the economic recovery in the caribbean ; • second, current growth and financing challenges facing the caribbean ; and • third, propose an innovative financial solution that can help to strengthen regional economic growth, transformation, and development. global growth prospects ladies and gentlemen, let me begin with a brief overview of global growth prospects. sadly, the news is not so good. downside risks continue to dampen the outlook. as you may be aware, financial markets remain the achilles ’ heel to a global recovery which has suffered several setbacks over most of 2012. prospects for stronger world growth are bis central bankers ’ speeches hampered mainly by the seemingly unhurried approach of policymakers across both sides of the atlantic to resolve both the sovereign debt crisis in the euro area and the fast approaching u. s. “ fiscal cliff ” and possible breach of the u. s. debt ceiling. the economic situation in europe remains challenging given rising fears about spain and about a black swan scenario in which greece exits the euro zone. weakness seems to be spreading from the periphery to the core of the euro area, as even germany has not been immune. lack of broad - based agreement among european governments on a progressive path towards a more complete monetary union is also worsening the situation. across the atlantic, the re - election of president obama took place against a slow recovery of the u. s. economy from a deep recession, even as the “ fiscal cliff ” and breach of the u. s. debt ceiling loom dangerously near. the u. s. congressional budget office has warned that an automatic fiscal withdrawal in 2013 could push the u. s. economy back into recession, unless legislation is adopted to prevent it. more recently, concerns have arisen about the significant economic losses caused by the devastation from hurricane sandy, which battered states along the u. s. eastern seaboard as well as islands in the caribbean. hurricane sandy is expected to initially depress u. s. economic activity, but then support it over time as reconstruction commences. monetary policy has been easing across the world economy and is likely to remain very accommodative to softer economic conditions. the european central bank recently announced its outright monetary transactions programme, which helped to temporarily calm market sentiment. the u. s. federal reserve adopted a new round of quantitative easing in september 2012 where it was announced it would continue “ operation twist ” until the end of the year, and extend its low - interest

lukewarm jobs recovery in north america and europe. growth prospects seem somewhat better for the commodity - based exporters ( belize, guyana, suriname and trinidad and tobago ). secondly, many caribbean countries face unsustainably high public debt burdens, which jeopardize their medium term growth prospects. in 2013, three countries are projected to hold exceptionally high public debt at over 90 per cent of gdp, while another seven countries are projected to have heightened debt vulnerabilities, averaging in the range of 50 to 90 per cent of gdp. only two countries ( suriname and trinidad and tobago ) have public debt ratios less than 50 per cent of gdp. thirdly, the caribbean has the unenviable reputation as one of the most disaster - prone regions in the world. over the last 60 years, caribbean countries have suffered from 187 natural disasters ( mainly hurricanes and floods ). the effects on growth and debt associated with the frequent recurrence of these natural disasters are also significant. sir dwight venner, governor of the eastern caribbean central bank, captures these effects quite vividly : “ almost every year, we [ st. lucia ] have a hurricane season, which can destroy the country ’ s gdp. in some countries, it can also lead to high debt levels. their infrastructure is destroyed before they paid for it, so they borrow again. then it is destroyed a second and sometimes even a third time ”. finally, financial systems in the caribbean are becoming increasingly integrated with the emergence of major cross - border financial groups. the collapse of the insurance subsidiaries of the cl financial group is perhaps the most widely bis central bankers ’ speeches cited example of the systemic importance of cross - border financial groups. another indicator of the degree of cross - border ownership is that seven of the ten largest firms ( by asset size ) listed on the stock exchanges of barbados, the eastern caribbean, jamaica and trinidad and tobago are financial institutions. given the multi - faceted nature of the challenges facing caribbean small states, no single solution exists to address all of their problems. in fact, i remain convinced that bold and new regional solutions are absolutely essential to help individual countries mitigate the colossal challenges associated with their small size. allow me to briefly discuss four potential regional solutions which come to mind. first, we need to find more effective ways to speed up the implementation of proposals and recommendations stemming from regional initiatives to stimulate and sustain potential growth. three noteworthy regional projects are already underway that can help to inform the