the price in the uk. bis central bankers ’ speeches technology played an important role in the take - off of singapore, cyprus, mauritius and other successful small economies by making business and government services more efficient. a concentrated focus on technological development will greatly facilitate business competitiveness in the region. in addition to business facilitation, regional governments could contribute to the resurgence of the private sector through disciplined management of the public finances. and this has many aspects. obviously, one important aspect is avoiding sizeable fiscal deficits so as not to crowd out the private sector and to contain public debt burdens. good public sector management also implies allocating sufficient resources to infrastructural development, education and health – areas that are critical for private sector development. in many cases, a business - friendly government expenditure policy could imply difficult socio - political trade - offs involving expenditures on subsidies and transfers. as i noted earlier, several countries in the region already have excessive debt burdens which sometimes force expenditure adjustments to fall disproportionately on critical public investment. in our university councils, we are at pains to underscore the importance of uwi as a regional university. regionalism is even more important in our economic sphere and deeper regional integration is absolutely critical for our economic survival. in delivering the william demas memorial lecture last month, the managing director of the world bank put her finger on this delicate issue as follows : “ from my experience in africa, ( she said ), i appreciate very well the sensitivities around deeper integration. at first glance, it might well seem that whatever one country wins, another loses. free movement of people, for instance has created concerns in all regions that are seeking deeper integration. but regional integration is the only viable way to create scale for your economies. ” we absolutely need to move beyond pious statements and seriously pursue what c. y thomas calls a model of “ open regionalism ”, based on an outward - looking market - oriented framework in which the private sector is expected to take the lead. in addition to the liberalization of trade in goods and services, this model involves the free movement of labour and capital, a regional strategic sectoral plan, the adoption of a harmonized investment code and the development of a regional capital market. greater integration along these lines could be a critical input in improving competitiveness. for example : labour mobility within the region has the potential to improve skill and wage arbitrage ; co - ordinated investment

government programmes. ( particularly, in view of the lumpiness of government investment projects ). this is what happened in the 1980s when oil prices declined from us $ 36 to us $ 15 per barrel, forcing government expenditures to be cut by 40 per cent, even after the government had recourse to foreign borrowing of about us $ 1 billion. many commentators have raised a very valid concern that, in the event of a secular decline in oil and gas prices, drawdowns for stabilization could consume the entire fund over time. to deal with this, the law sets a floor of us $ 1 billion beyond which no drawings can be made for stabilization purposes. a five - year review built into the legislation also allows this floor to be raised as the fund grows. inter - generational savings the major objective of the fund is top generate inter - generational transfers ( savings for the future ). this could be justified by the fact that government revenue from the exploitation of non - renewable resources differs from other tax revenue in that it partly represents a depletion of wealth, and that some of this wealth needs to be saved for fiscal sustainability and for inter - generational equity. essentially, what the hsf does is to convert depleting resources into a permanent source of income. by saving some of the oil revenues and investing it wisely, we may be able to : • • preserve the capital ( somewhat like having the oil and gas remain in the ground ) ; and • • live off the interest. thus, when the oil resources are depleted, the income from the fund would flow into the budget to preserve government expenditures. [ the idea is that the earnings from the fund would replace the energy taxes as oil and gas resources are depleted ]. of course this requires a critical mass of savings ( built up over a period ) to generate sufficiently large income flows. the question is sometimes raised : why not spend all the oil revenues on infrastructure to broaden productive capacity to serve future generations – in our case there is the argument of our limited implementation capacity which is already stretched. more broadly, tying public expenditure to available revenue invariably leads to some poor quality projects. so that ’ s the basic rationale behind the fund. how is the hsf supposed to work? as minister enill noted, 60 per cent of any excess revenues will be credited to the fund which will be invested in foreign assets and with a long - term focus. conversely, the government will be able to draw from the fund when actual