Feb 24 - Mar 10, 2017 the Editorially Independent Publication of the Caribbean Council

VOL 39 • ISSUE 38 CARIBBEAN INSIGHT FEB 24 - MAR 10, 2017 THE EDITORIALLY INDEPENDENT PUBLICATION OF THE CARIBBEAN COUNCIL

New CARICOM initiatives Highlights this issue... on tourism and ICT Click and explore: CARICOM Heads of Government meeting in Georgetown have agreed to give greater priority to tourism, the development Argyle International Airport finally of a regional ICT programme, and to addressing the issue of opens in St Vincent & The Grenadines pan-Caribbean crime.

Of all the matters discussed at the inter-sessional summit Baha Mar owner invests ahead held on February 16-17 under the Chairmanship of Guyana’s of April launch President, David Granger, the issue most likely to have a time- ly outcome relates to tourism, a sector rarely discussed by Heads of Government, despite its centrality to the regional Major CDB loan to curb water loss economy. and improve delivery

At the meeting, CARICOM Heads recognised for the first time PM Barrow remains optimistic ‘that tourism is a vital sector to the economies of Member about Superbond renegotiation States’. In doing so they welcomed detailed proposals put forward by the Caribbean Tourism Organisation (CTO) and the Caribbean Hotel and Tourism Association (CHTA) to advance a Government of Cayman Islands regional tourism agenda, in part through the creation of pub- proposes ambitious energy plan lic/private sector partnerships to address issues from airlift to marketing. New US-Cuba policy likely to be in place by July In an important departure, they agreed to the establishment of an Interim Tourism Working Group involving the CARICOM Secretariat, CTO and the CHTA, and stakeholders to prepare a Kempinski to open first Cuban five-star hotel pilot region-wide public relations and marketing initiative. This will be considered when they next meet in July.

New mineral resources found The decision was subsequently welcomed by the CTO and in Dominican Republic CHTA, who said that, at the request of Heads of Government, they will now be developing detailed information on the re- CDB: Guyana well positioned gional industry’s competitiveness and financing needs to en- due to oil and fiscal prudence sure its future sustainability.

Haitian President to name Continue on page 2 > Prime Minister after Carnival The other agreement reached, with potentially significant long-term implications, was a draft roadmap for a single CARICOM ICT space, based on a paper produced by the Caribbean Telecommunications Union (CTU) and officials. The proposal envisag- es ICT becoming a driving force for the creation of a CARICOM digital economy, and a means of increasing inter-regional social cohesion and awareness.

On crime, especially among young people, ‘grave concern’ was expressed, and it was recognised that there was a need to take action at a regional level to finalise and implement the Regional Crime and Security Agenda and to develop capacity to address cybersecurity, cybercrime and drug demand reduction. At the meeting, it became apparent that CARICOM’s Legal Affairs Committee had failed to take the steps necessary for Heads of Government to agree on essential measures relating to transnational crime, or to improve regional security in the form of a CARICOM-wide arrest warrant and treaties relating to the seizure of ill-gotten assets.

Caribbean Heads also noted ‘that some of their previous decisions [on the CARICOM Single Market and Economy (CSME)] had not been complied with’. Among the issues which had to be addressed as a matter of urgency was the challenge of cross-border payments for goods and services traded within the region, and the completion of the protocol on procedures relating to facilitation of travel and free movement. They also recognised the importance of transportation to the movement of Commu- nity nationals, and called for a focused discussion on this topic in the context of the integration movement, as well as greater collaboration among the regional airlines.

On the subject of correspondent banking they once again recognised the need for a regional approach, and for concerted action to address the de-risking strategies of global banks. It was agreed that Ministers of Finance with responsibility for Cor- respondent Financing should assume oversight of a plan submitted by Central Bank Governors.

Although there were the usual platitudes about regionalism, there were clear indications in the final communique and subsequent press conference that CARICOM Heads had be- gun to recognise the implications of the body having failed to implement past decisions.

The meeting, while well attended by Heads of government from the Eastern Caribbean, was notable for the absence of the leadership of the Northern Caribbean other than Haiti. Jamaica, the Bahamas and Belize were instead represented by their foreign ministers.

The full text of the communique, which includes referenc- es to several international and cross border issues, can be found here. The next meeting will be held in Grenada from 4-6 July 2017.

02 INDEX Argyle International Airport Finally Opens in St Vincent

St Vincent and the Grenadines finally has an international airport capable of receiving long-haul jet services from North Amer- ica and Europe. The new US$259m airport, known as Argyle International, was officially opened on February 13.

Although work began in 2008, completion was delayed, for reasons largely associated with engineering difficulties, bad weather and limited resources. St Vincent and the Grenadines was the last independent nation in the OECS unable to receive visitors directly from its main tourism feeder markets.

The completed facility on the eastern side of the island is solar-powered, has a 2,743 metre (9000 foot) primary runway, and a large new terminal capable of handling 1.5m passengers per year. It was partly financed by grants from Taiwan, Cuba, Vene- zuela, Trinidad, Mexico, Austria, Malaysia, Turkey, Iran, Portugal, and Libya and is the largest capital project ever undertaken by the country.

The first flight arrival was a scheduled service of LIAT. According to the aviation publication CH Aviation, the first long distance international flight was a B737-800 Sunwings charter from Toronto.

Among those attending the opening ceremony was the Cuban Vice President, Salvador Valdes Mesa. Cuban workers were involved in the construction of this airport.

Although St Vincent does not yet have the numbers of hotel rooms to justify any dramatic increase in jet services, the opening of the airport is expected to spur villa and hotel development in the medium term. The possibility of direct air services has been welcomed by the country’s Diaspora in the US and Canada.

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03 INDEX ANguilla Governor approves budget after lengthy delay. Governor of Anguilla Christina Scott assented to the 2017 budget on February 6. The budget had been approved by the House of Assembly on December 21, but Scott’s approval was delayed due to concerns raised by Baroness Anelay, the UK Minister for the Overseas Terri- tories, that the fiscal plan left insufficient flexibility in the event of uncertainties. In a letter dated February 2, Anelay listed a number of conditions upon which her own approval of the budget rested:

• Adoption of a contingency plan to protect against risks associated with the 2017 Budget • Improved quarterly reporting on the economic reform package adopted in March 2016 • Agreement to no tapping of government reserves without prior notice, and that expenditure only take place once revenues are secured in order to maintain fiscal balance • Provision of an update in April 2017 on the progress of the sale of ANGLEC shares • Agreement among officials on a timetable for the start of work on the 2018 budget

Chief Minister Victor Banks agreed to these measures on February 2, clearing the way for Scott’s assent.

ANTIGUA Road improvement key to infrastructure overhaul. The government launched a US$17.4m project to re- & BARBUDA habilitate the Sir George Walter Highway and Friars Hill Road on February 10. The work is being funded by the UK Caribbean Infrastructure Partnership Fund (UKCIF) grant.

During the launch ceremony, Prime Minister Gaston Browne noted the importance of the two roadways, which he said are used by 75% of Antiguans every day and connect St John’s to the island’s top tourism areas, as well as the most populous communities and VC Bird International Airport.

The Caribbean Development Bank will administer the UKCIF grant. The rehabilitation of nearly 9km of road- way is part of a larger, more comprehensive infrastructure improvement initiative, said Browne.

BAHAMAS ‘Spy Bill’ to have public consultation period. The controversial Interception of Communications Bill, or ‘Spy Bill’, has been delayed to allow for a period of public consultation, according to Attorney General Allyson Maynard-Gibson.

The bill, which allows for law enforcement agencies to intercept electronic communications of any kind once ‘certain clearly defined conditions are fulfilled’, has been publicly opposed by the likes of Free National Move- ment Leader Hubert Minnis and Grand Bahama Human Rights Association President Fred Smith. Opponents of the bill argue that it gives too much leeway to the government to monitor electronic communications sent by citizens and businesses. Maynard-Gibson has called the bill a “very important tool in the fight against crime, much of which is gang related, transnational and involving guns and drugs.” The Attorney General also points to similar legislation enacted in the UK, the US and several countries in the region that allows for the lawful interception of communications, arguing that the more people learn about the proposal, the more they will support it. The Bahamas is designated as an area within US Homeland security.

Baha Mar owner invests ahead of April launch. Chow Tai Fook Enterprises (CTFE) has invested some US$20m into its own slot machines in preparation for the April 21 soft launch of the Baha Mar resort. President of CTFE’s Bahamas subsidiary Graeme Davis also indicated to Guardian 96.9 FM that some 11,000 Bahamians have applied for a job at Baha Mar, and that much of the upper management workforce will be drawn from that pool of applicants.

04 INDEX Davis expects there to be between 200-800 rooms available upon opening in April, which will be managed by Grand Hyatt. There will be a staff of 2,000 in place for the soft opening, with hiring set to continue through 2017 and 2018, when the Rosewood component of the resort is launched.

BArbados Major CDB loan to curb water loss and improve delivery. A US$35m Caribbean Development Bank (CDB) loan will provide a critical cash injection for the Barbados Water Authority (BWA) this year, with the first tranche of funding to be disbursed in June. The loan will be used to reduce non-revenue water, and carry out improvements to reservoir infrastructure and the ageing infrastructure of the national water utility. These works will help to improve the delivery of potable water across the island.

Injunction lifted, Central Bank governor faces dismissal. A public dispute between Minister of Finance Christopher Sinckler and Central Bank of Barbados Governor DeLisle Worrell has led Worrell to file an injunction which barred him from being fired by Sinckler. The injunction, filed on February 12, has since been lifted, clearing the way for Sinckler to remove Worrell from his post, though legal counsel from both sides continue to engage in dialogue.

Worrell has served as Governor of the Central Bank since 2008. He reportedly met with Sinckler on February 8, at which time he was asked to tender his resignation by February 13, or else face dismissal. This led Worrell to pursue court protection.

The Government and the Central Bank have been at odds over several decisions pertaining to the island’s economic difficulties, including the Government’s decision to print money (some US$25m per month) in order to meet payroll obligations, a move the bank claims has led to the depletion of the country’s foreign reserves.

BELIZE PM Barrow remains optimistic about Superbond renegotiation. Belize has failed to meet its February 20 deadline to make its scheduled US$26.6m Superbond payment. Even so, Prime Minister Dean Barrow has commented that “nobody need say that we are in default…because there is this 30-day grace period.” Barrow recently travelled to New York for negotiations with the co-chairs representing a majority of bondholders, noting that the talks went well and expressing cautious optimism that an agreement will be reached. The grace period expires on March 2.

The inability of government to meet its obligation to bondholders as the 2038 Superbond is currently struc- tured underscores Belize’s ongoing cash flow difficulties. These have been partially exacerbated by further significant obligations owed to the Ashcroft Alliance.

BRITISH Fraser out, Fahie in as Opposition Leader. Governor John Duncan removed Julian Fraser as Leader of the VIRGIN Opposition on February 6, allowing Andrew Fahie to assume the position. Fraser responded by stating that ISLANDS the Constitution grants authority to a governor to appoint, but not to remove, an opposition leader.

Duncan acted in response to a petition submitted to him by the Virgin Islands Party (VIP) and responded to Fraser by citing Section 70 (sub-section 3) of the Constitution: “If at any time between the polling in a general election and the next following dissolution of the House of Assembly the Governor is satisfied that, if the office

05 INDEX of the Leader of the Opposition were then vacant, he or she would appoint to that office a person other than the person then holding that office, the Governor shall revoke the appointment of the Leader of the Opposition.”

Duncan appointed Fraser in July 2015, after he and Fahie had reached a stalemate in their pursuit of the opposition leadership.

CCCC is preferred bidder for airport expansion work. Formal negotiations for the expansion of Beef Is- land’s TB Lettsome International Airport have yet to commence, according to Premier Orlando Smith. China Communications Construction Company (CCCC) has been chosen as the preferred bidder for the project, which is predicted to cost US$153.5m. Government research suggests that the project would boost GDP by more than 5% in the first year alone, with a 20% GDP increase predicted in the first three years.

The government expects a US$500m injection into the economy within 5 years of the start of construction. The most important component of the project is the lengthening of the runway to 7,100 feet. A runway of that length would accommodate 737-800 and Airbus 320 class aeroplanes from the US and Latin America. The government must complete pre-negotiations before a formal contract can be signed with CCCC.

CAYMAN Dart project to create jobs, attract tourists. Dart Real Estate is forging ahead with plans to build a 225- ISLANDS room hotel at Grand Cayman’s Seven-Mile Beach. The project, which will include 80 residences and 10 villas, is projected to make a US$600m economic impact over five years, creating 800 construction jobs and more than 1,200 direct and indirect jobs upon opening.

Part of the plan is to remove 1,200 feet of beach rock to enhance the beach and facilitate the development. The plans are currently under review by the DoE.

Government proposes ambitious energy plan. The government’s proposed National Energy Policy 2017- 37 has set a target of generating at least 70% of Cayman’s energy from renewable sources within 20 years, with the ultimate goal of reaching 100% renewable production beyond 2037.

The report also details benchmarks for a reduction of greenhouse gas emissions from peak 2014 levels of 12.2 tonnes of carbon dioxide equivalent (tCO2e) by 10%. Currently, more than 99% of Cayman’s energy needs are met through the use of petroleum-based products according to the report, which also states that costly fossil fuel imports represent ‘a risk to the competitiveness of the Caymanian economy’ and are an ‘inhibitor to socioeconomic development.’ The Caribbean Utilities Company (CUC), Cayman’s electricity utility, burns some 31m gallons of diesel fuel on an annual basis.

The new energy policy would obligate utilities to purchase renewable energy from third-party sources, incen- tivise individual energy production, and encourage the use of public transportation and electric and hybrid vehicles. Additionally, building codes will allow for retrofitting with energy efficient lighting and cooling systems as well as renewable generation systems. The energy policy has been submitted to the Cabinet for review.

Read more at the link here.

06 INDEX CUBA Cuba seeking to increase crude oil production. Quoting an unnamed advisor to Manuel Marrero, the Minister of Energy and Mining, Prensa Latina has reported that Cuba believes that a crude oil discovery is most likely in water at depths of 3000 to 4000 metres in its Exclusive Economic Zone.

Noting that the Cuban state does not have the resources to drill at such depths, the official said that the cost would be between US$250m and US$300m per well. Cuba is currently encouraging foreign investment in the sector with a new bidding round for offshore blocks expected later this year. At present domestic Cuban production accounts for less than half of the country’s hydrocarbon needs.

Joint biotech venture hoping to begin work in April. The Roswell Park Cancer Institute in Buffalo, New York, and the Cuba Centre for Molecular Immunology in Havana have announced that they hope to launch a joint venture based in the Mariel Special Development Zone to produce vaccines to fight cancer. If the project proceeds, it could also see Cuban biotech products entering the US market and applying for US FDA approval.

New US-Cuba policy likely to be in place by July. Former US President Barack Obama informed Congress that he would again waive Title III of the Helms Burton legislation, in an announcement on January 4th which received little attention. The decision meant that the Trump administration was not forced to take early action on its Cuba policy.

If Title III is not waived every six months, those with US registered claims to expropriated assets in Cuba are entitled to bring legal cases against those alleged to be using or ‘trafficking’ such property.

On February 3, the new White House press secretary, Sean Spicer, told journalists the Trump administration was “in the midst of a full review of all US policies towards Cuba”.

New measures to increase birth rate. Cuba has introduced several measures aimed at addressing the economic and social problems associated with an ageing population and declining economic productivity.

The new measures involve the provision of extended maternity benefits and employment protection, as well as incentives to encourage the participation of relatives in the care of minors.

Kempinski to open Cuba’s first true five-star hotel. The Swiss Kempinski Hotel group has announced that it will open a five-star hotel in Old Havana this year. The 246-room hotel, the Gran Hotel Kempinski Manza- na La Habana, will be operated under a management contract with the tourism group Gaviota. Located in the historic Manzana de Gómez building, it will provide Cuba’s first genuine five-star facilities.

China says interest in Cuba is not at US’ expense The Chinese government has said that its increased investment interest in Cuba is intended neither to anticipate nor to prevent the presence of US companies, but is an element of its widely-shared belief in the positive prospects for Cuba’s development.

The comments, by China’s Foreign Ministry spokesman, Geng Shuang, follow reports in the Chinese and Cuban media suggesting that China may become Cuba’s most significant long-term trade and investment partner.

A longer and more detailed version of these and other stories on Cuba appears in Cuba Briefing, which is available by subscription or to Premier members of the Caribbean Council free of charge.

07 INDEX Curaçao Parliament dissolved as new elections announced for April. Just seven weeks after Curaçao’s last round of elections, Prime Minister Hensley Koeiman has announced that the Cabinet of Ministers has elected to dissolve Parliament and set an early election date of April 28.

The action was taken after the two Pueblo Soberano members of the coalition government (Melvin Cijntje and Sherwin Leonora) announced they would no longer support the Prime Minister, thereby causing the government to lose its majority in the Parliament.

Article 53 of the Constitution allows Parliament to be dissolved by national decree, and necessitates a new election and the convocation of a new Parliament within three months. Governor Lucille George-Wout has accepted the request for new elections.

DOMINICA Skerrit: CBI funds for geothermal development. Dominica will invest US$16.7m of funds obtained through its Citizenship by Investment (CBI) scheme in the development of geothermal energy, according to Prime Minister Roosevelt Skerrit. Speaking at a Private Sector Forum on February 10, the Prime Minister indicated that the investment will be rewarded in the form of significantly reduced energy costs, which in turn will reduce the cost of doing business in Dominica and stimulate investment in new businesses. To date, the government has spent some US$18.5m on geothermal exploration and development. Most recently, the government signed a partnership agreement worth nearly US$1.5m with New Zealand for the construction of a 7-MW power plant in the Roseau Valley.

Skerrit’s commitment of CBI funds comes at a time that Dominica’s CBI programme finds itself under the international microscope amid allegations that the government has been selling diplomatic passports and drawing money from the CBI programme inappropriately. Such accusations have led to civil unrest, and have called Skerrit’s leadership into question among residents and the opposition.

Skerrit has recently filed a lawsuit against Opposition Leader Lennox Linton for comments he has described as slanderous and libellous.

DOMINICAN New mineral resources found in the Dominican Republic. The mining company Corporación Minera Do- REPUBLIC minicana (Cormidom) signals that newly discovered mineral reserves, reportedly a variety of metals, could extend operations by a decade at the Cerro de Maimón Mine.

The company affirms that this could be a break from their traditional pit mining operations and involve development of underground mines. Feasibility studies still need to be carried out on the deposits, which are com- posed of many different minerals. Cormidom’s existing operation is nearing the end of its useful life, which could mean that the investment in extending operations could cause the company to sustain financial losses over the coming 2-3 years.

Fiscal adjustments needed amidst tightening global financial conditions. The Dominican Republic’s consolidated fiscal deficit has been reduced from 7.7% of GDP in 2012 to 1.3% in 2015. However, government spending represents around 17% of GDP, while tax collections are approximately 14% of GDP by comparison.

08 INDEX Minister of the Treasury Donald Guerrero has said that the gap exists on the collections side, and that raising tax rates is not the answer. The Finance Ministry has suggested that a revision of tax exemptions could be the most feasible alternative.

Tax exemptions are estimated at 6.4% of GDP. The International Monetary Fund recently cautioned that increasing risks warrant strengthening of the nation’s fiscal position in the context of tightening global financial conditions.

IMF highlights economic risks for the DR. The appreciation of the US dollar and rising global interest rates are among the risks to the International Monetary Fund’s (IMF) baseline outlook for growth in the Dominican Republic. The Fund anticipates that growth will slow from an average of 7% for the last three years to level off at 5% this year. The Fund also projects that rising oil prices could create additional external pressures, and stresses that the external sector is facing uncertainty, particularly from the policy and economic environ- ment, which is largely impacted by the United States.

GUYANA CDB: Guyana well positioned due to oil and fiscal prudence. Guyana is on the right economic path, said Caribbean Development Bank (CDB) Director of Economics Dr Justin Ram during a February 17 news conference. Dr Ram pointed to the revenues that will come when the commercial production of oil and natural gas commences within the next few years as the top indicator that Guyana is on sound economic footing. He also praised the financial prudence with which the coalition government is conducting its affairs, noting the decline in the debt-to-GDP ratio over the course of 2016. Short-term challenges facing Guyana’s economy include financing gaps for capital projects, which he believes can be mitigated to some degree through the use of public-private partnership models of financing.

HAITI Prime Minister to be named after Carnival. Newly elected President Jovenel Moïse has yet to name a Prime Minister, with the President of the Chamber of Deputies indicating that Moïse has deferred the process in order to carry out consultations with the private sector and civil society. This has in turn delayed Cabinet appointments and the full structuring of government. Moïse has given assurances that he will name his government following the Carnival celebrations, which take place the final week of February.

Three-quarters of Haiti’s debt owed to Petrocaribe. Venezuela’s oil diplomacy programme, Petrocaribe, which provides long-term financing conditions for oil, has left Haiti with US$1.8bn debt outstanding at the end of 2016. This accounts for around 75% of the country’s total external debt, with the remaining debt mostly owed to multilateral financial institutions.

The structure of financing under the Petrocaribe programme resulted in a decline in assistance as oil prices dropped. This in turn led to a decrease in public investment in Haiti, coupled with a total debt of US$47m in arrears to Venezuela accumulated at the end of the previous fiscal year. Domestic debt in Haiti amounts to only US$112m, mostly in treasury bonds. The International Monetary Fund recently estimated that debt-to- GDP in Haiti stands at 28.9%.

Rubis acquires gas distributors in Haiti. French oil company Rubis has fully acquired Dinasa and affiliate company Sodigaz in Haiti. Dinasa has 125 service stations nationwide that operate under the brand name National. Dinasa participates in the LPG, heating oil, lubricant, and aviation fuel markets, and has storage

09 INDEX capacity and maritime access in Haiti. The move will translate into a 35% increase in activity for Rubis in the Caribbean. The acquisition is expected to close by mid-year.

JAMAICA Agreement with China to bring infrastructure investment. The signing of a framework agreement with China is expected to bring new investments to Jamaica in several sectors, including infrastructure, cement manufacturing, processing of resources, light industry and equipment manufacturing. Tourism and agriculture also stand to benefit from the agreement, which essentially seeks to expand the country’s production capacity and provide financing opportunities.

The agreement will also encourage the financial services sector to engage in co-financing and long-term insurance for the development of the nation’s production capacity.

Jamaica recently signed a US$326m loan agreement with China’s Ex-Im Bank to fund the Southern Coastal Highway Improvement Project.

Ground broken on BPO facility. Ground was broken February 16 on Business Process Outsourcing (BPO) facility Portmore Informatics Park, which will see an investment of US$31m and encompass a 157,000 square- foot facility. Construction is being carried out by the China Harbour Engineering Company for the foundation works, and ECVBV/ASB JV for the structural works. The work is due to be concluded in February 2018. US- based BPO firm and primary investor Alorica is slated to occupy the space, which will be operated by the Port Authority of Jamaica.

Digicel to launch voluntary redundancy programme. The Jamaica-based Telecommunications company Digicel announced it will reduce its workforce worldwide by 25%, launching a voluntary redundancy programme on March 1. The move aligns with the company’s 2030 global transformation programme, which will structure two regional hubs in the Caribbean to provide back-office support.

Digicel also announced it will move forward with its long-term network upgrade programme under a partnership agreement signed with global integrated telecoms solutions provider, ZTE.

Agriculture leads growth in Jamaica. The Bank of Jamaica affirmed an eighth consecutive quarter of growth for the economy in the Q4 2016 in its Quarterly Monetary Policy Bulletin, released on February 21.

The Agriculture sector grew nearly 18% during the quarter, an important determinant in the 2.5-3.5% level of growth experienced in the goods sector. Agriculture has benefited from favourable weather conditions, with output of vegetables and root crops driving the increase, supported by a rise in export crops like coffee, cocoa and bananas.

The construction sector grew 0.5%, mainly driven by tourism construction and works underway by the Na- tional Housing Trust. Mining Activity dropped 4.5-5.5%, impacted by a drop in crude bauxite and alumina production.

ST IMF: unemployment falls as economy continues to grow. St Lucia will experience moderate economic LUCIA growth in 2017 according to the International Monetary Fund (IMF), which completed its Article IV consultation in January.

10 INDEX In a recent announcement, the IMF noted that 2016 saw a decline in unemployment in St Lucia, “despite weak tourism activity.” The organisation is calling for the development and quick implementation of a medium-term fiscal consolidation plan in order to reduce uncertainty and assure the success of a bold economic agenda to be featured in the upcoming budget. The IMF also noted that:

• The short-term outlook is mildly positive, with some risks • The medium-term outlook remains subdued with structural weaknesses • Fiscal policy should focus on broadening the tax base, controlling expenditure and improving financing terms • The consolidation plan should account for the possibility of natural disasters • Monitoring of the public sector should be increased to lower risk • Citizenship by Investment Programme revenues should be used to lower debt, with limits placed on the amounts used for high-priority expenditure • Banks continue to be hampered by non-performing loans, and the cost of corresponding bank relation- ships has increased • Reforms to improve the business climate should be implemented quickly