Caribbean leaders warn of region’s economic collapse
NEW YORK, USA — Gaston Browne, prime minister of Antigua and Barbuda, told the United Nations General Assembly on Saturday that, along with climate change and lingering indebtedness, Caribbean islands face another existential threat from the withdrawal by global banks of correspondent banking relations to their financial institutions.
In the global campaign against money-laundering and terrorist financing, very strict penalties have been imposed on banks by regulatory bodies in North America and Europe for any infringement of the stringent regulations.
“In this environment, where even the slightest infraction could expose a bank to a fine of hundreds of millions of dollars, many have chosen to withdraw essential correspondent banking relations from financial institutions in the Caribbean, Central America and Africa,” he explained, adding: “They call this process de-risking. I call it economic destruction.”
Browne said while this trend is prevalent in a few regions, it will spread with global consequences unless checked by collective action.
“We would be severed form the world’s trading system, unable to pay for basic services we purchase, or to receive payments for gods and services we sell to other countries,” he explained, stressing that this “growing cancer” would likely lead to economic collapse, poverty and high crime in small countries and worse still, would force underground the financial transactions that are being regulated by law enforcement agencies, creating huge opportunities for money laundering and terrorist financing.
“This would undermine the very global, multilateral cooperation that is required to fight these scourges,” he said, and noted that of all the terrorist financing and money laundering cases that have been prosecuted, not a single one of them involved Caribbean financial institutions.
Given their size and limited choices for economic expansion, small island states like Saint Lucia have looked to the more advanced economies for innovative means of economic development, the country’s prime minister, Allen Chastanet, also told the United Nations on Saturday, among many speakers from the region who said they now find themselves being penalized as tax havens by the very architects of such strategies.
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