ABSTRACT
This chapter examines the critical issue of debt and fiscal constraints in the CARICOM region. The history and evolution of the debt problem in the region from the 1980s to the present is first traced. The nature and structural characteristics of the debt is then explored. In some cases, sizeable external debt has been accompanied by large internal debt, and in others, both are at critical levels. After examining the macroeconomic significance and consequences of the debt, the question is asked as to what is the opportunity cost of carrying such high levels of per capita debt? The potential for debt reduction and increased fiscal sustainability is then examined. A final section provides a summary with some policy recommendations on the way forward.
