ECONOMIC STIMULUS PACKAGES: RETURNING TO GROWTH
ADDRESS
by
PROFESSOR COMPTON BOURNE, Ph.D., O.E.
PRESIDENT
CARIBBEAN DEVELOPMENT BANK
at the
II HEMISPHERIC PRIVATE SECTOR FORUM
of the
FIFTH SUMMIT OF THE AMERICAS
THURSDAY, APRIL 16
TRINIDAD AND TOBAGO
2
ECONOMIC STIMULUS PACKAGES: RETURNING TO GROWTH
The global economic and financial crisis has galvanised public economic policy in many
countries. Because the core of the problems is located in the United States and Western Europe,
world attention has focussed on economic measures being taken to arrest the economic and
financial decline and stimulate growth in those regions. China has also been of special interest
because of its significance in world trade and finance and the massive size of its own economic
stimulus package. However, precisely because the economic and financial crisis is global in the
sense of having negative spill-over effects on many other economies, many other countries have
had to design and implement adjustment policies to mitigate the risk of economic recession and
financial disorder.
Economic stimulus packages vary in detail from country to country. Nonetheless, some
general characterisation is possible. One common feature is expanded fiscal expenditures on
economic and social infrastructure. Transportation and education are sectors frequently targeted.
The intention of this kind of public economic intervention is both short term and medium term.
The short-term economic objective is to boost aggregate demand and create employment
opportunities for workers retrenched by failing business enterprises. The purpose is to minimise
the severity of the economic recession and its social consequences. The medium-term objective
is to lay a foundation of enhanced infrastructural capacity and human capabilities for future
economic growth.
In many instances, also, economic stimulus packages provide direct expenditure subsidies
and budgetary grants to business enterprises in spec