Description |
1 online resource (32 pages) : color illustrations |
Series |
IMF country report ; no. 16/245 |
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IMF country report ; no. 16/245.
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Contents |
A savings fund for natural disasters: an application to Dominica -- Credit unions in Dominica: financial importance and policy challenges -- Economic impact of tropical storms |
Summary |
This paper presents a proposal for the creation of savings funds (SF) for rehabilitation and reconstruction after natural disasters (ND) in Dominica. A Monte-Carlo experiment is used to calibrate the size of the SF, based on the distribution of ND fiscal shocks estimated from an empirical fiscal model. ND shocks are identified by controlling for other major sources of shock affecting the cyclical fluctuations of output, and government revenue and expenditure, and by calibrating the probability of ND consistent with their historical frequency. The simulations provide estimates of the amount of savings needed to ensure the financial sustainability of the SF with a low probability of depletion. The simulation framework also allows for the specification of fiscal consolidation measures and generates probabilistic public debt projections after accounting for the financing flows of the SF vis-à-vis the government budget. -- Credit Unions play a prominent role in the Dominican financial system. They provide an important financial intermediation role, particularly for middle and lower income groups and other key segments of the population that might otherwise find it difficult to access credit through the commercial banking system. However, the objectives of credit unions are somewhat different from those of commercial banks. For the latter the main premise is profit maximization, while for credit unions the prime objective is to serve its members with a greater focus on thrift and less so on risk taking. Thus, there is often a trade-off between offering the best financial services and products to the membership and the need make a reasonable return. Nonetheless, credit unions provide services similar to banks and are therefore subject to the same macro-economic shocks and stresses. Some of the larger credit unions are comparable in size to the indigenous bank in Dominica. Consequently, there is a pressing need to strengthen the sector through more timely data disclosure and improved regulation and supervision. -- The Caribbean region is one of the most disaster-prone regions in the world. The location of the Caribbean countries, their small size and narrow production and export base makes them vulnerable to natural disasters and other real shocks. 15 Caribbean islands are among the top 25 countries affected by tropical cyclone disasters. And, the probability of a hurricane hitting seven of them, including Dominica, in any given year is above 10 percent |
Notes |
"July 2016." |
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"June 21, 2016; approved by Western Hemisphere Department; prepared by Alejandro Guerson, Saji Thomas, Wayne Mitchell (all WHD) and Ke Wang (RES)"--Page 2 of pdf |
Bibliography |
Includes bibliographical references |
Notes |
Description based on online resource; title from pdf title page (IMF website, viewed September 6, 2016) |
Subject |
Natural disasters -- Economic aspects -- Dominica
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Savings accounts -- Dominica
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Credit unions -- Dominica
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Storms -- Economic aspects -- Dominica
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Economic development -- Dominica
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Fiscal policy -- Dominica
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Financial risk management -- Dominica
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Credit unions
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Economic development
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Economic policy
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Financial risk management
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Fiscal policy
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Natural disasters -- Economic aspects
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Savings accounts
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SUBJECT |
Dominica -- Economic policy
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Subject |
Dominica
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Form |
Electronic book
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Author |
Thomas, Saji, author, (IMF staff)
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Mitchell, A. E. Wayne, author, (IMF staff)
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Wang, Ke (Economist), author, (IMF staff)
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International Monetary Fund. publisher.
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International Monetary Fund. Western Hemisphere Department, sponsor
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ISBN |
9781498377423 |
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1498377424 |
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