Caribbean Nation Leads Change in Debt Management

A panoramic view of the Castries Harbour, Castries, Saint Lucia: where smart borrowing and strategic reforms are reshaping the island’s economic future.

The beauty of the majestic Piton mountains, vibrant culture, dazzling beaches, and lush landscapes of Saint Lucia are invaluable assets. The country also takes pride in having two Nobel laureates, which is remarkable for a nation with a population of over 180,000.

However, as is true for many other small island developing states (SIDS) in the Caribbean, the picture of economic stability is not as rosy.

These countries face a complex web of challenges that include intensifying climate impacts, economic volatility, external shocks, and the vagaries of global markets. These challenges exacerbate the difficulties of finding ways to finance much-needed sustainable development projects and resilience-building.

In 2020, the country’s public debt-to-GDP ratio was over 90 percent, due in part to the deleterious effects of the coronavirus pandemic, and by 2024, this ratio was reduced to 74.5 percent. This dramatic reduction has freed up funds, which can now be invested in projects that spur growth and enrich the lives of Saint Lucians.

For Saint Lucia, prudent debt management is proving to be a powerful catalyst for growth and shared prosperity. The island’s experience is demonstrating how tailored reforms, technology adoption, and capacity building can reduce their debt burden and enable sustainable management of public finances.

The government is taking even bolder steps for fiscal stability, with technical support from the Commonwealth Secretariat.

In March 2024, the Commonwealth Secretariat and the Ministry of Finance collaborated to develop a reform plan for the country, starting with a rigorous and comprehensive review of the public borrowing framework. Saint Lucia is now implementing this framework, which has recommended targeted and practical interventions.

Technology has also played a pivotal role in modernising Saint Lucia’s debt management practices with the adoption of the Commonwealth Meridian system. Launched in 2019, the Commonwealth Meridian debt management system is currently being used by 43 countries around the world.

John-Emmanuel said, “Meridian allows for real-time tracking of borrowing, automated reporting, and better analysis of liabilities. These upgrades have helped integrate technology into the core of Saint Lucia’s debt operations, improving both strategic planning and investor communications.”

Through technical workshops, mentoring, and regional training sessions, Saint Lucia’s debt management team has grown in both skill and confidence.

“The ongoing support has empowered our staff members to apply best practices and promote transparency,” the Deputy Director observed. “We’ve become more proactive and capable in managing our debt portfolio.”

To mark 40 years of debt management support for member countries, this year is marked as the Commonwealth Year of Resilient, Innovative and Sustainable Debt. Initiatives continuing into 2026 will include sharing experiences and enhancing technical and policy solutions that help governments with long-term public debt management and contribute to fiscal sustainability.

Dr Ruth Kattumuri, the Commonwealth Secretariat’s Senior Director of the Economic Development, Trade and Investment Directorate, noted, “The challenges for small and vulnerable states in the Commonwealth are multi-faceted. They face existential threats from frequent and extreme weather events due to climate change, as well as economic shocks—both of which impede progress. Small island developing states also have limited potential to diversify their economies. So, maintaining a sustainable level of debt is critically important.”

Kattumuri added, “For countries like Saint Lucia, being able to tap into the experience and knowledge base of the Secretariat means leveraging best practices from our 33 small states. We are also able to provide tailored technical assistance and capacity building to help transform public finance management, based on our long experience of supporting small states.”

Access to affordable finance is limited for Saint Lucia, classified as an upper-middle-income country, as are many other small island developing states (SIDS) in the Caribbean. For these countries, higher interest rates and limited funding options mean debt reform is not optional – it is essential.

Also critically important is the need to modernise governance practices in line with international standards.

These reforms have not gone unnoticed by the international financial community. Improved transparency and consistent reporting have boosted confidence among lenders and investors, enabling Saint Lucia to access concessional financing to fuel sustainable and resilient development.

Saint Lucia’s story is not unique. Other Caribbean countries, such as The Bahamas, are also advancing sustainable debt management practices in the region. Since 2021, The Bahamas has partnered with the Commonwealth Secretariat to strengthen its public debt management framework and develop a government bond market, supported by the India–UN Development Partnership Fund.

The experience of these Caribbean countries demonstrates that with the right combination of thoughtful reforms, cooperation, and prudent borrowing, even nations facing unique fiscal, geographic, and environmental vulnerabilities can successfully manage their debt.