Shortly upon assuming office, the Government of St. Kitts and Nevis, under the leadership of Prime Minister Honourable Dr. Terrance Drew, earmarked the strengthening of the policy framework on climate change as one of its key priority areas going forward.
The Concluding Statement of the 2023 Article IV Mission by the International Monetary Fund (IMF), issued on January 31, 2023, suggests that St. Kitts and Nevis is on the right path in this regard, as it has identified achieving natural disaster resilience and climate change adaptation policies as two key areas that can help the Federation achieve greater economic sustainability.
The IMF mission, led by Mr. Alexandre Chailloux, visited St. Kitts and Nevis on January 16-27 for the 2023 Article IV consultation discussions on economic developments and macroeconomic policies.
“Enhancing natural disaster preparedness will require resolute policy implementation over the coming decades. Climate change adaptation policies, which will require substantial fiscal outlays, can improve welfare and achieve economic and fiscal sustainability. A long-term policy package should include higher resilient infrastructure spending, an optimal insurance framework against natural disasters, and renewable energy transition investment,” the IMF report said.
The IMF welcomed the Government’s decision to create a Sovereign Wealth Fund, which will be used to safeguard the country’s investments in international markets and industries over the long term.
“This Fund should be set up based on international best practices and aim to accumulate national wealth, finance resilient investment, and ensure adequate buffers,” Mr. Chailloux said.
Moreover, the IMF report stated that continued structural policy efforts are needed to strengthen competitiveness by enhancing the labor market and encouraging economic diversification.
“Ongoing efforts to improve the access and delivery of education and TVET should be complemented by Active Labor Market Policies with an emphasis on better integrating vocational training with the labor market to reduce skill mismatches and promote job opportunities. Linkages between the hospitality sector and the rest of the economy can be leveraged to provide more diversified and higher-quality job opportunities. The transition to renewable energy could help reduce energy costs and improve resilience,” the report said.