sir k dwight venner : recent financial and economic developments in the eastern caribbean presentation by sir k dwight venner, governor of the eastern caribbean central bank, on the eccb 2010 / 11 annual report, st kitts, 29 june 2011. * * * good evening fellow citizens of the eastern caribbean currency union. this evening i am pleased to present the report on the performance of the eastern caribbean central bank for the financial year 2010 / 2011. the purpose of this report is two - fold : 1. first, it is in - keeping with the transparency and accountability requirements of the eastern caribbean central bank agreement act 1983. 2. second, the operations of the eccb have a direct impact on the lives of all citizens of its member countries. it is therefore important that the public is provided with information on the operations of the bank and the challenges it faces as it continues to pursue its mandate of maintaining the stability of the eastern caribbean currency and the region ’ s banking system. the size and nature of the economies of the eastern caribbean currency union ( eccu ) render them particularly vulnerable to external shocks and natural disasters. this is the stark reality that the eccb faces as it seeks to strengthen the region ’ s financial structure in response to the impact of the global economic and financial crisis. the external shocks which confronted the region over the past year have been manifested through the lingering effects of the global economic and financial meltdown. the global economy has been recovering from the recession of 2008 / 2009, but at a slow rate. moreover, increases in oil eccb member and commodity prices, a significant weakening of the recovery process or a second round recession are possible downside risks given the prevailing uncertainty in the international economy. in the united states of america, one of the region ’ s main trading partners, stimulus interventions contributed to an estimated 2. 8 per cent growth in gdp in 2010. however, the country continues to grapple with high unemployment and the economy continues to perform below capacity. this is particularly evident in the following areas : the very high level of sovereign debt and the stalemate between the major political parties on raising the legal debt ceiling and addressing the fiscal issues ; the difficulties in the housing and real estate markets which are having a marked and negative impact on the pace of the recovery ; the high level of unemployment which is now at approximately 9 per cent ; and the significant impact of these factors on consumer spending which is the main driver of the american economy. the european union constitutes the largest single

. individuals have to present their income and financial statements to the tax authorities so that they can be fairly assessed and make a contribution, so that in exchange the government can provide the services of law and order, sanitation, education, etc which add to the quality of life. all countries as members of the international community, and, in particular, the imf have to transmit to that organization for official publication in a document entitled “ international financial statistics ” their national accounts, balance of payments, fiscal, monetary and price statistics. these figures obviously are of critical importance to the country itself in two ways. firstly, how can good policies be made if there are no timely and accurate statistics, and how can the progress of the country be accurately assessed if there are no reliable statistics to make the judgment? secondly, if both foreign and domestic investors have no access to accurate data, how can they make serious decisions on potential investment opportunities? in both developing and emerging market economies, tv and radio stations, newspapers and business magazines keep the public well informed on commercial, financial and economic affairs. in this churning up of information, analysis and commentary, individuals and business firms are presented with increased choices for both saving and investment. in this environment, businesses rise and fall based on the performance of markets, and their ability to manage their resources. while speculation abounds this is mostly based on the review and analysis, no matter how cursory, of what is taken to be accurate and credible statistics produced and published at set periods by official or publicly acknowledged institutions. information is such a critical part of this era that not only do we speak of the information age but three distinguished economists have received the nobel prize for their work in this subject area. it is against this background that we can outline the external and domestic environment in which we exist, define the domain or theatre of action in which we operate, point out the goals and objectives we have set for ourselves and / or have been set for us, and review the policy tools we have at our disposal to meet these objectives. in the case of the external environment, we live in what has now been accepted as an increasingly globalised world. barriers to trade and finance are being removed across the international community, and the spread of technology both in basic sciences and materials, as well as information and communication technologies have literally created a global village. this trend has inevitably presented challenges to all countries in different ways. free trade regimes have had an impact on our traditional agricultural export commodities, such