Antigua and Barbuda - Future trends
The government has pointed to the need for new and varied sources of revenue, especially since the tourism industry is likely to face competition in the not too distant future from Cuba, which has larger hotels, good facilities, and is located closer to the United States. There is also the threat posed by the OECD to the offshore finance sector. This organization has placed enormous pressure on the government to tighten its regulatory control over the sector and such action could result in its stagnation.
The IMF has recommended that the country adopt a comprehensive macro-economic program with medium-to long-term plans for improving government finances. The government fears that an IMF Economic Structural Adjustment Program (ESAP), which advocates cutting down the size of the public sector, will lead to unemployment, which in turn can lead to poverty and crime. Thus, the government has declined to participate in the IMF program and has instead opted to devise its own economic restructuring program with the aid of the Eastern Caribbean Central Bank (ECCB).
With its cash flow problems, Antigua and Barbuda may reduce the size of the public sector, which presently employs close to 11,000 persons. It may also take at least some of the IMF's advice and toughen its fiscal policy , implement reforms to increase efficiency and governance in the public sector, and work out a suitable repayment plan with its creditors. With revenue being lost through reduced tariffs , the administration may be looking to the VAT to fill the gap. However, government officials have hinted that the 2001 national budget, to be presented to Parliament in March of that year, will include reductions in duty-free concessions in an effort to address the cash-flow problem. In 2000 close to US$37 million was granted in such concessions.