Shedding light on public debt: Why Transparency Matters in the Caribbean
For a region that is reputedly the most highly indebted in the world, you would think that Caribbean governments would have and would provide a very clear picture of how much they owe. You would be justified in believing that there would be ready and easy access to information on public debt so that you could have a sense of what was owed, to whom, and on what terms. You might even reasonably imagine that you could find reports or documents that would tell you how the government planned to manage the debt and its exposures to currency interest rate risk or whether the debt was sustainable or at risk of distress. It would then come as a disappointment to learn that many Caribbean countries struggle to prepare and publish comprehensive, timely and accurate information on public debt.
Over the past seven years, major international development institutions, especially the International Monetary Fund and the World Bank, have ramped up their efforts to improve debt transparency across countries. The costs of a lack of transparency have been well documented Countries such as Mozambique and Zambia have paid a high economic and reputational price for hidden debts. Higher debt, an increase in fiscal deficits, a loss of investor confidence, and weakened public trust, have typically been the outcomes when hidden debt is revealed. Yet, for all that, many countries in the Caribbean still do not publish key debt documents such as a debt statistical bulletin, an annual debt report, a medium-term debt strategy, an annual borrowing plan, or a calendar of issues. Stakeholders including creditors, investors, ratings agencies, even legislators, are left in the dark.
In 2018, I conducted a survey of 12 English-speaking Caribbean countries which revealed, at the time, that only 2 countries (Grenada and St. Vincent and the Grenadines) published a debt bulletin, only 3 countries consistently published a debt management strategy (Grenada, Jamaica, and St. Vincent and the Grenadines) and only 2 countries has public debt legislation that mandated publishing key debt reports. Fast forward to 2025 and while there has been progress, it has been much slower than anticipated. The Bahamas and St Lucia have both enacted modern public legislation that prescribes debt transparency. These countries now publish an annual debt strategy and borrowing plan, as well as a debt bulletin. When all four countries are combined, they represent less than half of all Caribbean countries. The share is even smaller if the net extends to all 14 CARICOM countries, which would then include Suriname and Haiti. The point is that there is much work to be done.
But why does transparency matter, especially here in the Caribbean? Caribbean economies are not only highly indebted but they are also highly vulnerable to external shocks - whether from hurricanes, pandemics, or global financial shocks. A lack of disclosure, whether deliberate or due to limited data coverage, gives rise to unexpected payment burdens or fiscal crises. The economic fallout from opaque debt can be further exacerbated when accompanied by external shocks. External shocks quickly and frequently negatively impact government budgets, giving rise to surges in debt. Hidden debts add to this burden adding another layer of debt at the worst possible time.
It doesn’t have to be this way. Several Caribbean countries have stepped up to improve their debt transparency:
Grenada regularly publishes a debt statistical bulletin and medium term debt strategy and has an established Fiscal Council to support transparency
Jamaica regularly publishes detailed debt statistics and has published its medium-term debt strategy and annual borrowing plan for over 2 decades
The Bahamas has now got on board and publishes its debt bulletin, debt strategy, and annual borrowing plan regularly
Suriname has revised its debt legislation to expand debt coverage to include reporting on state-owned enterprise debt
St. Vincent and the Grenadines has been making strides in improving its debt recording and publishing a debt bulletin and debt strategy.
Caribbean governments have much to gain by being transparent. Take the case of Jamaica, where the appetite for holding securities has become increasingly robust. It should not be surprising. Jamaica leads the way in debt transparency with an official website in which is a one-stop for debt information, providing reports, policy and strategy documents, issuance calendars, credit ratings, and governing legislation, among others. Non-deal road shows are regularly held and a formal investor relations programme has been established. Borrowing spreads have narrowed considerably as investor confidence and trust has grown. Markets have become increasingly accessible as clear, credible information is forthcoming both in good times and in bad. Debt transparency has helped to undergird lower borrowing costs, investor confidence, and better planning. It’s a great platform for greater economic stability and fiscal resilience.
So, how do we accomplish greater transparency? The hope is that governments should be self-motivated to be transparent. If not, then international institutions, technical assistance providers, public oversight committees, and the public should prod them along. The best way is to put enabling legislation in place. The Bahamas seemingly did this of their own volition without a crisis precipitating reform. Other governments need to take a page out of their book and turn on the light.