Caribbean needs robust private sector for economic progress, says CDB
Published:Friday | October 2, 2020 | 12:17 AM
The Caribbean Development Bank, CDB, anticipates that by the end of this year, amid the COVID-19 pandemic, it would have approved US$470 million of funding for member countries.
The actual deployment of funds, which usually lags approvals, is projected at US$367 million, said CDB President Dr Warren Smith on Wednesday at the annual meeting of the bank’s board of governors held online.
The bank’s funds are typically deployed to governments, but its president sees the private sector as the real engine of economic progress, with the public sector as facilitator.
Smith, in his address to the meeting, used it to pitch for governments of the region to elevate the private sector, allowing it to assume its place as the ultimate generator of jobs, incomes and exports, through public policies and programmes such as climate-friendly infrastructure, a skilled labour force, and a robust capital market.
He was also critical of the lack of accomplishment around harmonised markets and trade, the blueprint for which was developed nearly two decades ago by the Caricom bloc, and which could have been a springboard for big business.
The Caribbean has not exploited the true potential of the regional integration project to allow regional firms access to a larger protected market in which they could grow, and which would serve as a launching pad to the global market, Smith said, while noting that the actions agreed in the 2001 road map to a single market and economy still needs to be implemented.
“I believe that the full potential of the integration movement has been limited by significant non-tariff barriers to trade, a lack of harmonised investment codes, tax incentives, macroeconomic policies, and restrictions on capital mobility,” he said.
Smith’s tenure at the CDB comes to an end next April, his 10th year as the bank’s leader, having been hired as its fifth governor in 2011.
Since that time to 2019, the bank has approved US$2.5 billion of financing and distributed US$1.8 billion of those funds, or an average of US$200 million used for the provision of roads, classrooms, water, sanitation, energy, sea defences, disaster management and other government programmes.
The CDB funds for distribution this year are tracking well above that average as the pandemic rages.
Jamaica’s Minister of Finance, Dr Nigel Clarke, made a pitch at the meeting for the bank to be especially cognizant of the vulnerable position of women in the pandemic, many of whom are front-line workers at the mercy of the virus and many who are at the mercy of violent partners, in its determination of the funding to be deployed.
“Women are bearing a disproportionate burden. They constitute a majority of front-line workers in many countries, including our own. They are highly represented in small and medium-sized businesses that are affected, and schooling from home imposes additional burdens that are skewed towards the female gender,” he said.
Evidence also suggests, the minister added, that violence has increased against women during the pandemic.
“I believe, therefore, that there is an opportunity for the CDB to consider gender-based initiatives in its response to the crisis, and our response, collectively, cannot be gender-blind and must incorporate a gender element,” Clarke said.
Smith says that over his tenure the bank has helped to narrow the infrastructure deficit in the region and improved access to social and economic services, through strategic partnerships and by mobilising resources from donor countries and multilateral financial institutions.
“I am even more convinced that the business of development is complex. It requires many players, including CDB, joining forces in an orchestrated manner to create the environment best suited for advancing living standards in our region,” he said.
The CDB was established in 1970. In addition to the 19 borrowing members within the region, it has nine non-borrowing members: four in the region – Brazil, Colombia, Mexico and Venezuela; and five non-regional – Canada, China, Germany, Italy and the United Kingdom.
CDB ended last year with US$3.59 billion of assets, inclusive of US$2.10 billion of ordinary capital resources and US$1.49 billion of special funds.