Improving on the “fragile and uneven” growth which the Caribbean experienced last year requires that borrowing member countries (BMCs) focus more attention on economic activities that allow for the increased generation of foreign exchange “to pay for the goods we import for consumption and production,” President of the Caribbean Development Bank (CDB) Dr Warren Smith said last week.
And against the backdrop of their growth challenges, Smith said, countries in the region were battling their own performance-related demons. “Government services are not being delivered cost-effectively, social safety nets are still not being adequately targeted, institutional and regulatory reforms for improved private sector competitiveness are lagging behind the rest of the world and state-owned enterprises are not adhering to universally-accepted financial management policies,” the CDB boss said. He said as well that the inefficacy of fiscal policy across the region had left member countries in a condition where the state sector was guilty of tremendous wastage of resources, a condition that was hampering their future prospects.
Dr Warren Smith
The big challenge, Smith said, was to “reverse this pattern and place the borrowing member countries firmly on to a path of sustained and inclusive income growth with discernible improvements in living standards.”
The CDB President told the bank’s annual media briefing in Barbados that if the region were to unlock its considerable potential it needed to both “offer services that promote efficiency and cost-competitiveness,” and focus on “fostering inclusive growth and protecting vulnerable groups in our society,” on the one hand and, on the other, ensure that government is “financed by revenue systems that meet the sufficiency criterion while promoting equity and economic efficiency.”
Smith disclosed that the CDB’s success in mobilizing finances had meant that it had approved a total of US$306 million in loans and grants to Caribbean countries last year, an amount that represented the highest amount approved in five years. The three largest beneficiaries of last year’s lending by the bank were Belize, St Lucia and Suriname. Last year, the CDB also commenced implementation of the US$375 million United Kingdom/Caribbean Infrastructure Partnership Fund (UK CIF) a facility designed to finance transformational infrastructure projects in parts of the region.
In noting that the bank had “reached noteworthy milestones in deepening our strategic partnerships and successfully mobilising financial resources,” Smith said borrowing member countries were now better positioned “to craft appropriate responses to their development challenges.”
In 2016 the CDB also signed a Credit Facility Agreement with Agence Française de Développement that included a US$33 million loan to support sustainable infrastructure projects and a €3 million grant to fund feasibility studies for projects eligible for financing under the credit facility.
