Minister of Finance and the Economy, the Honourable Dr. Errol Cort, launched the North American leg of the Treasury Securities Roadshow with a well-received presentation to a packed audience at the Hyatt Hotel in mid-town Manhattan on Wednesday. The Minister's presentation detailed the economic prospects for Antigua and Barbuda.

Leading a panel of presenters that included Mr. Casroy James of ABI Bank and the Mr. Trevor Blake of the Eastern Caribbean Securities Exchange (ECSE), Minister Cort told an audience that included bankers, investment brokers, Antigua and Barbuda nationals from the New York Tri-Sate area and the Honourable Jacqui Quinn-Leandro, Minister of Labour, Public Administration and Empowerment, that, on taking office in March 2004, his government immediately found that there was a huge disparity between government's resource generation and its level of expenditure, which created significant fiscal imbalances such that by the end of 2003 the current and overall deficits amounted to 7.86% and 11.51% of GDP respectively.

"This deterioration of fiscal deficits also meant a mounting debt stock as the limited resources led to the accumulation of interest and principal arrears on outstanding debt. By the end of 2003 therefore, our debt stock stood at nearly EC$3 billion or nearly 130% of GDP. My government has committed itself to correcting these imbalances," he said.

He added that the current government immediately introduced a comprehensive reform programme which included legislative, institutional and structural reforms, which was necessary in order to bring about a transformation in the Antiguan and Barbudan economy.

"We have commenced the implementation of various strategies and programmes aimed at: improving accountability and transparency in public sector operations; correcting the fiscal and debt situations; encouraging private sector development through the use of multiple strategies including legislative reforms; institutional strengthening; tax reforms; public sector transformation; measures to promote investment in the private sector; and a comprehensive strategy for improved debt management," he added.

The audience applauded the Minister when he highlighted the initiatives his government had put in place to increase revenue generation and to control public sector expenditure. Among those he cited were: the re-introduction of the personal income tax in April 2005; greater controls over the level of discretionary tax concessions; implementation of a Public Sector Investment Programme; and the implementation of eFinancials software package (Freebalance) for more efficient management of Government accounts.

"In 2006, my government will continue to implement various tax reform and expenditure management programmes. These include: the implementation of the Antigua and Barbuda Sales Tax; introduction of enhanced cash management procedures which will seek to: strengthen fiscal management; improve expenditure controls; eliminate the accumulation of domestic arrears; completion of a Customs Renewal Programme which focuses on: streamlining customs procedures, full automation of the Customs Department; improving customs legislation; and implementation of a modernized property tax system," he said.

Keen interest was also expressed in the segment of the Minister's presentation that dealt with ongoing efforts to transform the public sector. He told the audience that, to date, the government has implementeda Voluntary Separation Package, allowing persons in the public sector to opt for voluntary severance.

On the issue of private sector investment, the Minister said that the government had, in collaboration with national and international partners, engaged in a number of initiatives to ensure the creation of an enabling environment for private sector investment. Among those he identified were the Empowerment for Ownership programme, undertaken in collaboration with the Stanford Financial Group; the reduction of the Corporate Income Tax to 30% with even lower rates offered to Financial Institutions that extend credit at lower cost for residential mortgages and commercial development; the Development of a Small Business Development Act, which will provide incentives and technical support to micro and small businesses, and the creation of the Antigua Barbuda Investment Authority (ABIA), which will facilitate investment through a fast-track mechanism and perform investment promotion functions.

Another eagerly anticipated aspect of the Minister's presentation was the segment on debt management. The Minister told the audience that attaining more sustainable levels of debt and improving debt management are key objectives of this government's ongoing Debt Management Project. This project, which is being implemented by the international investment firm Houlihan Lokey Howard and Zukin, will assist the government in: identifying measures to further improve debt management; and ensuring better mechanisms for monitoring debt.

"I am pleased to report that various tax reform and expenditure management initiatives have already produced successes on government's fiscal accounts. Our current account deficit declined 60% from 7.86% of GDP in 2003 to 2.71% of GDP in 2005. In addition, the overall fiscal deficit declined 48% from 11.15% of GDP in 2003 to 5.16% of GDP in 2005. The public debt stock as a ratio of GDP has also declined from 130% in 2003 to about 110% in 2005. This reduction in the debt stock was due mainly to significant debt relief which reduced the external debt stock by 40%," he said.

"I am also pleased to report that our real GDP for 2006 has been forecasted by the Eastern Caribbean Central Bank to grow at a rate of over 13% with the construction sector leading economic activity. This strong performance in 2006 will be driven mainly by several private and public sector projects," he said.

"And I must commend the strong leadership of the Honourable Baldwin Spencer, Prime Minister, who is committed to implementing more prudent fiscal policies; ensuring more transparent systems for managing public sector operations; and fostering greater accountability and increased efficiency," he added.

The Minister concluded his presentation by noting that the issuance of securities on the Regional Government Securities Market is another critical component of this government's strategy to improve the debt profile of Antigua and Barbuda.

"The use of this regional mechanism to raise resources needed to undertake essential capital investments that promote growth should reinforce government's commitment to transparency and accountability in respect of the acquisition of debt. This government's strong commitment to initiating change and to honouring its financial obligations are significant indicators that investment in the securities being offered would prove a viable option to any investor," he said.

The presentations were followed by a lively question and answer session which lasted well pass the scheduled closing time.

The Minister and his delegation left New York for Toronto for the final leg of the roadshow.