IMF/World Bank Group has a new Chairman!

Prime Minister Hubert A. Ingraham of The Commonwealth of The Bahamas, was recently elected to the post of Chairman of the IMF/World Bank Board of Governors this October. Congratulations are in order! All Bahamians and Caribbean people should hail this achievement in our hemisphere's history. His supporters should be as pleased as punch-- as well they should be. His detractors are probably saying to themselves; "Dear God!". Then again, some people don't care either way, because they want to know: what does it have to do with me? They all have their reasons to feel what they feel.

However, stepping around all of that; I have to say that this appointment is an important step for the Caribbean, as it would put attention on small developing state matters, at a most critical time in global economic development.

The question must be asked; what authority will prime minister Ingraham have that would cause there to be a change in the focus of the group? Firstly, he will have the authority to set the agenda of the board of directors on what should be discussed at general meetings, as well as, secondly, liaising between leading finance officials as to what should be prioritized on the agenda.

It is not exactly a position of total authority. Neither is it a position of sinecure, either. But, it is a chance for small states to have a voice placed in a position that clearly state what the situation is.

As we know, current, larger country issues, are allot different than developing country issues, and totally different than micro-state issues. This is where affecting global economic change becomes important.

The G-8 and G-20 countries have worked out some of their issues through the IMF already during this crisis-- an important move back in 2008 was the enlargement the SDR fund to facilitate a large stabilization fund for the G-20. By doing this, the fund attempted to stabilize larger countries and as a result, smaller states would also benefit.

Some argue that this method is outdated, because of the increasing effects of globalization and the shift in capital to large developing countries from developed countries, in addition to the misdirected use of capital inflows, which has placed smaller states down the line in the economic production order. This issue is particularly magnified when capital inflows are not infused into the main economy of smaller states, but rather used through offshore transfer points or in specialized investment vehicles that are headed for larger consumer markets.

A second question to be asked is; does Mr. Ingraham have the tools to address these issues, as well as other plaguing financial issues that small developing states have? No doubt he has the experience, serving his third non consecutive term as prime minister of The Bahamas, in addition to having international respectability-- or else he wouldn't have been in the discussion, let alone be selected as the Chairman of such a prestigious grouping. However, no one person has all of the answers. This is where we, as people who have a vested interest in a brighter tomorrow, have a duty to give input into these issues in a critical, broad based and impartial manner.

For instance, there needs to be a stabilization fund for external supply shocks, particularly with regard to oil and circumstances that affect food prices. Small developing states are, primarily, price takers in the market for oil and processed food. This means that they are victims of imported inflation, as well as victims of external supply shock caused by foreign externalities. Imports affect the level of foreign reserves and foreign reserves, are needed in order to purchase goods on the international market because countries look for a stable, recognized currency in which smaller countries can purchase goods with.

There is also a need for a separate, foreign reserve stabilization fund in the Caribbean. The process we have now, is that countries access the IMF stabilization funds on request-- some of the time after a lengthy process. However, the administrative cost and timeliness of accessing the funds, could be much improved if a standard requirement for a grouping of Caribbean countries is set, with flexible parameters on when this fund can be accessed-- this would also eliminate the problems that arise as a result the emergency nature of accessing the funds, and allow countries to take pre-emptive strikes when forecasts indicate that their foreign reserves may be impacted negatively.

Another major concern is the lack of Central Bank supervision and coordination in the region. Not that there is proper Central Banking coordination in any other region, but there is an opportunity to find a shared commitment on a coordinated, Central Bank policy. For one reason, small developing states are not like large states, because small states are dependent on any and every means to maintain macro-economic stability, unlike large countries that have the ability and the capacity to monetize debt, or dynamic enough to provide goods and services for consumption in order to create independent wealth and make money multiply on a large scale.

Coordinated central bank policy for the region, from a regional body, autonomous enough to enforce its own rules, but sensitive enough to be intelligently responsive to individual country needs, would assist with working closely with failed institutions as what we have in Haiti, and also equipped enough to handle the run away freight train in that of the Jamaican Central Bank.

Thinew body does not have to compete with the IMF for business. In fact, the IMF can go a long way with providing technical assistance, and supervisory controls for this grouping, or, sub grouping, within the Caribbean.

There also needs to be a way for Caribbean states to develop a sovereign bond-swap facility. The reason why it would be beneficial between Caribbean states is that it would be useless to attempt a bond swap with larger developed or developing countries to small developing countries, because of the size compatibility. However, the theoretical aspect of sovereign bond swap facility between small, but dynamically different by comparative economic scale, countries, can prove meaningful.

It would allow Caribbean countries to swap debt on one end, and build up foreign reserves on the other end, while having an added weapon in fighting domestic inflation in addition to giving an autonomous Central Banking body, a purpose for existence.

I'm certain that there are allot of pressing issues on the agenda, but let's see what the new Chairman has to say on the matter when he meets with his colleagues throughout this course.