The recent global economic crisis was particularly severe on the economies of the Caribbean, especially those that depend heavily on services for their economic growth. It has exacerbated already existing high-levels of debt for several countries of this region. Reduced fiscal space has been a long standing problem, and chronic fiscal deficits leading to high public debt is one of the most important development challenges facing Caribbean SIDS. For instance, the average fiscal deficit and public debt levels were 3.4% and 84.4% of GDP, respectively, from 2000 to 2007. Moreover, four countries had debt levels in excess of 100% of GDP. Various internal (economic programmes to reduce the debt) and external (IMF stabilization programmes) strategies have been implemented to address this issue, with little impact. An important aspect of the issue is the limited capacity of public sector technocrats to manage and forecast public expenditure and revenue � two critical capacities for controlling fiscal imbalances and high debt. The persistent fiscal and debt problem in the region is partly a reflection of pro-cyclical fiscal policy, where governments spend excessively during booms and are forced to retrench during downturns. However, they also reflect institutional weaknesses related to limited capacity for effectively managing public expenditure and matching this with revenues. In addition, systems for revenue and expenditure forecasting and debt management remain weak and ineffective in a number of countries, particularly as they relate to containing contingent liabilities. Given the number of countries and extent of the problems, the region requires a broad program of capacity building to strengthen public finance management to control fiscal deficits and debt. It is within this context that this project would seek to strengthen the capacity of the small island developing States of the Caribbean to effectively manage their public expenditure, revenue and debt.