the americans, the canadians and people from our other source countries to lead us out of these woods. until they do, we must be watchful, but patient. although the signs are encouraging, we are not yet confident of recovery, so we must continue to be in a holding pattern, and make do as best we can. the impact on individuals too many jobs have been lost as a result of this recession and the unemployment rate has risen to about 11 percent of our workforce. some of those who have been laid off have found part time or informal work, with a consequent reduction in wages. however, the number of people seeking jobs, who have found nothing suitable for as long as a year or more, is now quite high. what is more, many of those still in jobs have suffered reduced hours, poor sales and reduced income. the overall result is that family incomes have typically not kept up with inflation in the past two years, and for many families earnings are substantially lower than they were before the recession. families in this situation have no option but to reduce their spending. difficult as this may be, the average barbadian household may in a better position to adjust than is the typical american household, because barbadians do not like debt. i would expect that the amount we are committed to pay to service our debt obligations of all kinds is far lower than is the case in america, as a percentage of our incomes. debt service is an obligation you cannot easily cut back on, though there is a possibility of renegotiating the terms of mortgages and bis central bankers ’ speeches other debt, if your income has been drastically reduced. on the other hand, our utility bills take up a higher portion of our income than is typical in america. in any event, we have little option but to adjust to whatever happens to our incomes. it was an airport taximan who said to me that if you ’ ve lost your job and you don ’ t know where your next month ’ s income is coming from, it makes no sense to borrow to pay your rent. so let me say something about the various ways that i have observed, in various places and at different times, that people have managed to cope with adversity of the kind we are witnessing in barbados and in most of the countries of the caribbean. one way to take advantage of a period of enforced idleness is to invest in developing your own personal skills and knowledge, through education or training. to do

. they relate to the loss of two important macroeconomic adjustment tools, namely independent monetary and exchange rate policies. the member country has to abide by common monetary policy for the union as a whole ; and it has to relinquish its exchange rate, an instrument for protecting itself from economic shocks. however, the costs are less severe if the shocks affect all member countries in the union in a similar fashion, and a common monetary and exchange rate policy vis - a - vis with the rest of the world would then be appropriate. in such a scenario the national gains would be positive for all. on the other hand if the shocks were asymmetric in nature, affecting the countries in a dissimilar manner, due to reasons such as different industrial structures, a common policy would be less desirable. however, disadvantages of such a nature can be reduced to a great extent if prices and wages are flexible and if there is perfect labour mobility between member countries. thus, downward flexibility of wages and prices and labour mobility will enable the member countries in a currency union to withstand shocks of asymmetrical nature. the important issue here is what the operation of a common currency would imply for the conduct of monetary policy in the csme. a common currency necessitates a single set of economic, monetary, financial and fiscal policies which would ensure balance of payments viability for the region. accordingly, all of the countries in the union would have to fall in line with the currency ’ s monetary and exchange rate dictates. no agreement has been reached on whether the common currency would be fixed of floating. also, there would need to be harmonized fiscal policies to ensure the success of regional monetary policy. such a single set of policies has better likelihood of success when there is a high degree of synchronization of business cycles for all prospective member countries of a currency union. according to optimum conditions, countries experiencing common external shocks would be better suited to form a currency union because it permits the use of region - wide policies to correct any imbalances. the reality in the caribbean is that some of these second order conditions do not hold in all respects. for example, while trinidad and tobago is a major producer of petroleum, most of its csme partners are oil importers. regional monetary policy would have to be fashioned very cleverly and with the utmost sensitivity in order to be generally applicable to all the countries in order that gains may be shared both at the national and regional