Last year was a tough one for the Caribbean. Tourism, the base of the region's economy, suffered after September 11. Tumbling commodity prices and weaker exports also hit the islands hard. Highly contested elections set for several Caribbean countries this year have added yet another element of volatility.
Life is not a beach
The major Caribbean countries this year face rising debt loads, election uncertainty and economic challenges.
To keep investors satisfied, they must maintain fiscal discipline and diversify their markets.
Yet many of region's countries have been able to issue debt in the international capital markets. In the last year, Jamaica, the Dominican Republic and Barbados have all floated substantially sized bonds. These higher debt levels mean that the islands' struggle to diversify their economies and manage unstable politics is that much more critical.
Jamaica's debt-to-GDP ratio of 140% is one of the highest ratios in the region. A five-year banking crisis and loose fiscal policies in the 1990s pumped up the country's debt load and Jamaica issued $690.9 million more in global bonds in 2001. Jamaica has the lowest credit...
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