jwala rambarran : countercyclical loans for the management of exogenous shocks in small vulnerable economies ( sves ) and nontraditional sources of development finance opening remarks by mr jwala rambarran, governor of the central bank of trinidad and tobago, at the joint commonwealth secretariat and united nations development program workshop on “ countercyclical loans for the management of exogenous shocks in small vulnerable economies ( sves ) and non - traditional sources of development finance ”, port of spain, 29 january 2013. * * * ladies and gentlemen, i thank the commonwealth secretariat and the united nations development program ( undp ) for the invitation to deliver opening remarks at this joint workshop on what i consider to be one of the more critical issues facing small vulnerable economies, but which ten years after the monterrey consensus on financing for development has been largely ignored by the international policy community. while developing countries have made much progress in meeting the 8 millennium development goals ( mdgs ) to free humanity from extreme poverty, hunger, illiteracy and disease by 2015, substantial challenges still remain, especially in reaching the most vulnerable. multiple financial, food, energy and economic crises, which often respect no borders, further aggravate matters. as the deadline approaches, we have the opportunity to design a post - 2015 framework that builds on successes, learn from past shortcomings, and addresses the gaps in the current mdgs. jeffrey sachs, professor of sustainable development at columbia university, warns us in his january 24th 2013 article entitled “ writing the future ” that humanity faces no greater challenge than to ensure a world of prosperity rather than a world of ruins. professor sachs strikes a prescient note when he states “ like a novel with two possible endings, ours is a story yet to be written in this new century. there is nothing inevitable about the spread – or the collapse – of prosperity. more than we know ( or perhaps care to admit ), the future is a matter of human choice, not mere prediction. ” i therefore commend the commonwealth secretariat and the undp for mounting this first of three workshops here in the caribbean, with the other two to be held in the african and pacific regions. perhaps this will be the first chapter on the post - 2015 development story of new financing arrangements for small vulnerable caribbean economies, whose future might be partly based on the choices you make at this workshop. i certainly look forward to the outcomes of all three workshops, and hope that the shared positions

to set the stage for our emergence as an international financial center. in trinidad and tobago, the government and the central bank have made a series of critical interventions, during the second stage, to spur capital market development along marketbased lines. for example, in 2004 the mechanism for primary market issuance evolved from an “ underwriting ” system, which helped minimise placement risk and ensured allocation, to an auction mechanism, which served to increase transparency, stimulate competition and improve the process of price determination. in the context of this auction mechanism, the bank designated a number of financial institutions as government securities intermediaries ( gsis ), licensed to participate in government bond auctions either on their own account or on behalf of the public. to facilitate clearance and settlement of purchases through the auction system, the electronic government securities system ( gss ) originally established for treasury bills and treasury notes, was expanded to accommodate government bonds. the gss incorporates both an on - line auction system and an integrated securities depository. the gss is currently integrated into the real time gross settlement system ( the rtgs ) to facilitate the settlement of government securities transactions and simultaneous recording of the ownership of securities in the depository. ladies and gentlemen these various interventions ; the auction system, the gsis, the on - line system and the central depository system, all set the stage for the introduction of the secondary market for government securities, which we are pleased to launch today. how does the primary market differ from the secondary market for government securities? simply put, the primary market for a security is the place where an issuer creates the security and sells it into the market ; it involves the creation of new securities with the government as seller. the secondary market covers trading of securities after issuance and before redemption. it is our conviction that the secondary market can offer tremendous benefits to the economy of trinidad and tobago. it will firstly foster further capital market development and facilitate the achievement of the various objectives listed above and secondly, the secondary market could bring significant benefits to investors. what are the systemic benefits of a secondary market in government securities : • first, market trading provides a mechanism for government securities to move from investors in the primary market to a wider range of end - investors such as pension funds, insurance companies and retail investors. • second, by providing opportunities for more frequent trading, the secondary market improves the pricing process for government securities. • third, the development of a well - functioning secondary market in government securities may also act