The least that regional governments can do is to engage in serious introspection – and perhaps even vigorous discourse at the level of CARICOM – following the very pointed and profound public comments made in February by the President of the Caribbean Development Bank (CDB) Dr. Warren Smith, regarding what he feels is, among other things, the institutional disorder of the state sector in the management of the economies and the charting of developmental directions in countries in the region and the consequential “fragile and uneven” growth which the region experienced not only “last year,” but over a much longer period.
Before we go any further the point should be made that Dr. Smith, in his capacity as President of the CDB, is an appointed post-holder, put there to oversee the effective functioning of an institution set up to help meet the developmental needs of the region. One makes this point if only to take account of what may be the argument of some Caribbean governments (and this has been the practice in the past) that they govern on the basis of mandates that come from their respective domestic constituencies and that the President of the CDB has been appointed to execute a mandate which is determined by paradigms set by them and that he therefore has no right to question their modus operandi. Nothing, of course, can be further from the truth to say nothing about the altogether compulsive argument that Caribbean governments have not always provided generous evidence that they are abundantly confident about their countries’ desired developmental directions and how those are to be realized.
The official functions of the Bank include supporting member countries in pursuit of optimizing the use of their resources and expanding production and trade, promoting private and public investment and facilitating business expansion, mobilizing financial resources for development and providing various forms of technical assistance to borrowing countries. These are considerable support mechanisms in a region where some countries face not only a scarcity of skills with which to effectively implement their development programmes but also lack the material resources with which to finance those programmes. There is a general agreement too that in the matter of the execution of its core functions the CDB has performed creditably. For example, the Bank’s success in mobilizing finances and skills to support development in borrowing countries has long been recognized and applauded. Last year it was able to approve US$306 million in loans and grants to member countries, the highest amount approved in five years. In 2016 it also began implementation of a US$375 million UK/Caribbean Infrastructure Partnership Fund, a project that seeks to finance projects aimed specifically at materially transforming lives where such transformation is most needed in the region.
Accordingly, and, he would have felt, with considerable justification, Dr. Smith declared in Barbados in February that he believed that the CDB had reached “noteworthy milestones in deepening our strategic partnerships and successfully mobilizing resources” for the region.
And yet, for all that, what the CDB President had to say in Barbados in February would appear to be reflective of some measure of what he sees as a disturbing dichotomy between the efforts of the Bank to discharge its responsibilities to borrowing member countries, on the one hand, and what, in instances, has been the underachievement of governments in the region in terms of satisfactorily discharging their reciprocal responsibility to take optimum advantage of their partnerships with the Bank.
This is part of what Dr. Smith had to say back in February about the performance of regional governments in the management of their economies. “Government services are not being delivered 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 first thing that should be said about Dr. Smith’s pronouncement is that it is sufficiently blunt and forthright as to require little if any clarification. It evidently seeks to communicate an acute sense of concern over the fact that there are instances in which the CDB and its member countries are pulling in opposite directions as far as the effective execution of what ought to be a joint mandate is concerned and that the Bank’s efforts might well, in some instances, be going to waste. All of this, we believe, is part of Dr. Smith’s method of seeking to make an honest evaluation of the extent to which the role of the CDB is making a difference in terms of helping member countries meet those developmental goals in which the Bank plays a direct role. In other words, this is what Dr. Smith considers to be part of his job.
More fundamentally, what the CDB President had to say makes another point that should not be missed and that is that we in the Caribbean, and mostly our governments, continue to battle a number of formidable demons, not least their preoccupation with the power and privileges of holding office, an absence in many instances of the vision that is critical to effective leadership and a lack of institutional capacity to craft and implement effective development policies.
In the case of Guyana, for example, (and one has every reason to believe that the same applies elsewhere in the region) each of the concerns articulated in what Dr. Smith had to say has long haunted the governance process, not least, it seems, the institutional capacity to deliver services efficiently and in a cost-effective manner, the ability to provide effective social safety nets and a recognition of the need to institute what Dr. Smith calls “institutional and regulatory reforms” designed to improve competitiveness. (Here in Guyana we have become past masters at tinkering with defective institutions rather than implementing comprehensive reforms).
Staying with Guyana, the concerns which Dr. Smith expressed over both the level of efficiency and cost effectiveness with which government services are delivered continue to be glaringly reflected in the instances of the health and education sectors, particularly, though not exclusively, where the expenditure of billions of dollars, annually, still leaves us with education and health services that are chronic underperformers. This is due in large measure to the failure of government to institute the requisite capacity and efficiency-driven public sector reforms. In the instance of state-run utilities, annual reports customarily tell a distressing tale of consumer dissatisfaction and as far as regulatory reforms “for improved private sector competitiveness” is concerned, we are still struggling with getting government and the private sector to sit down together, far less fashioning a relevant agenda for discourse.
An enhanced level of awareness of the dichotomy between the vision of the CDB and the direction of some of its borrowing members is, presumably, what Dr. Smith seeks to achieve though in the more than two months since his pronouncement there has been no evidence of an awareness of his message, far less a meaningful response from those governments in the region at which his message is aimed. One fears that the process of understanding and accepting the validity of Dr. Smith’s message is likely to be a long and torturous one in which the concerns of the Bank are more likely than not to be met with the indifference of the governments of borrowing member countries preoccupied with what they regard as the prerogatives afforded them by their mandates and perhaps, in their preoccupation with their ill-defined agendas and a preoccupation with the exercise of authority, oblivious to the fact that as Dr. Smith puts it we “are lagging behind the rest of the world.”