Summary
- Heavy reliance on “uncertain” Citizenship by investment inflows which remain under close international scrutiny.
- Inter-regional cooperation on CBI programs would safeguard CBI revenue inflows.
- Set minimum pricing benchmarks to prevent “race-to-bottom”.
The IMF has published Article 4 report member countries on common policies of the Eastern Caribbean Currency Union (ECCU).
In its report, IMF said, the outlook of region’s growth and fiscal outlooks are heavily dependent on uncertain CBI inflows, which remain under close international scrutiny, considering a major slowdown in tourism source countries.
The IMF has highlighted key risks involved with CBI dependency, include
- International scrutiny.
- high susceptibility to commodity price volatility,
- slowdown in major tourism source countries,
- rising vulnerabilities in the ECCU non-bank financial system, and the
- recurrent threat of natural disasters.
Deepening regional cooperation on CBI programs would help safeguard this important source of revenue
– International Monetary Fund (IMF)
IMF Executive board has called for a “Regional CBI framework could also include minimum pricing benchmarks to mitigate revenue-erosive competition”. Further, Building on the already established principles, cooperation would benefit from common due diligence, transparency, and disclosure standards.
A Regional CBI framework could also include minimum pricing benchmarks to mitigate revenue-erosive competition
IMF
Common principles on CBI revenue allocation would contain undue fiscal reliance on the programs, support rebuilding of fiscal buffers, and help ensure space for growth-enhancing investment and social protection, said IMF in the report.
The assessment called for further efforts such as ..
- Concerted region-wide efforts to strengthen data collection, processing, and transparency are essential to help improve the calibration of economic policies.
- The rollout of the Basel II/III prudential standards, the formalization of ECCB’s system-wide oversight authority, and the ongoing strengthening of AML/CFT frameworks are important advances toward further modernizing regulations and supervisory processes.
