The consequences of sovereign debt crises are devastating. They usually include cuts to health, education and other social services, privatisations, unemployment, cuts to workers’ wages and conditions, cuts to pensions, raising regressive taxes on labour and consumers and undermining democracy as sovereign governments become dependent on financial institutions (like World Bank and IMF) and their conditions.
The rhetoric that countries are undisciplined and that people have been living beyond their means israrely true. More often, sovereign debt is due to political incompetence and/or corruption of governments and to their protection of the interests of domestic elites. Additionally, governments of the richest countries fail to impose international rules that would force their Multi-national Enterprises (MNEs) to pay tax in foreign countries where they operate.
Tragically, austerity measures prescribed by the International Financial Institutions and creditors worsen the problems. The lessons learned from Africa, the Americas, and more recently Greece and Puerto Rico, show how austerity undermines long-term stability and growth. Countries that have adopted alternative solutions, such as Iceland and Argentina, have fared better. Austerity policies in Europe and the cost-cutting programmes demanded by the IFIs are leading to growing privatisation pressure worldwide. And yet, public investments in the future, for example in education, health and social services, are instrumental in creating growth and jobs. The IMF programme in Jamaica is being held up and promoted as a success story. What do the people say? What impact has it had on their every day lives?
Unions have not always understood the mounting risks or dishonest assurances we have been given. We must be well-informed and vigilant. It is necessary to reverse the misleading discourse about the cost of public services. Public service workers create wealth by contributing to a better standard of living and greater solidarity, because they promote social cohesion.
At times of economic and social crisis, it is essential to recognise the role of public services. The lack of resources allocated all too often to the public sector has an impact on the social fabric. Funding public services is to invest in the women and men that are at the service of the public every day and allow them to fully exercise their missions. These missions provide a better quality of life to citizens. The public services and their workers are an economic wealth. This is the discourse that we must resolutely uphold.
The bjective for the meeting is to provide background information on the particular problems of Caribbean SIDSin relation to debt/debt sustainability, the impact of climate change on debt, as well as the fact that most of Caribbean states are classified as middle income countries and therefore are limited in their ability to access concessional loans and debt write-offs.
Having provided that background, we will explore possible partnerships with othercivil society organisationsto lobby governments and parliamentarians to push for the special situation of Caribbean SIDS, the continuing debate on measuring debt and therefore to amend their position on how to handle the high debt levels of Caribbean economies.
For more information see PSI's website
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