By Kimberly Ramkhalawan
January 28, 2022
Its coming into two years since the pandemic began to take its toll on the Caribbean region, and with many nations coming to terms with recalibrating their business models and adjustments to how their manage their debt to GDP ratio while curbing long term effects of the virus on their population, the Caribbean Development Bank says these measures taken are being realized, and expect to see a percentage of economic growth in 2022.
First to deliver his presentation during the bank’s media conference, Ian Durant, Director at the CDB’s Economic Department gave prospects for regional growth in 2022 speaking at the regional press conference, the debt and fiscal outlook points to an improvement in Caribbean debt dynamics and an intensification toward sustainability.
While tourism which is seen as the main export commodity the region has to offer has taken a toll, says the rescue and recovery efforts must be consistent with the long term repositioning in order to reduce any further vulnerabilities. Durant calls for the region to become more resilient in its development areas. Production resilience and diversification are two areas Durant says are needed, as currently there is a lack of competitiveness in the region. He called for more innovative competitive economies through government policies that encourage an ease of doing business by utilizing digitalization. Citing that time consuming regulatory processes often increases production costs and lowers labour productivity making it difficult for local producers to compete on global markets.
However, Daniel Best, Director of Projects at the bank says in 2021 some US$122.6M were approved for loans in the region. Best gave the assurance the bank would do what is needed to partner with the private sector and other development banks to ensure the region strengthens its ‘trade and supply financing service chains, finance instruments ensuring partial credit guarantees’
While projects in education, infrastructure and agriculture development were disbursed across its borrowing member countries, BMCs, Best said some US$20M were given to Haiti resulting in 550 small scale farmers getting assistance for improved irrigation and drainage infrastructure.
Best added that in order to keep up with their Paris Climate Change agreement, the bank was prepared to mobilise some US$150 in concessional climate finance through programmes and projects financing its Green climate change fund, while he anticipates commencement of its Caribbean Action for Resilient Enhancement Programme, CARE to come on stream by March this year as a means of scaling up its climate finance portfolio.
Best said “A revamped energy sector policy strategy will promote the energy sector as an emerging area of sustainable opportunities in light of the scale shifts required for achieving carbon neutrality”. He said these opportunities ‘laid the basis for economic diversification and growth, and production of new green commodities’.
He was questioned on how the bank intended to ensure reduction of the region’s food import bill through developing agriculture resilience in the region, to which the Best mentioned that studies done in 2019 were looking at implementing a value added chain in food supply across the Caribbean. Best said while agriculture is central to bank’s strategies to increase food securities within the region, the bank was looking at partnering with anchor purchasers, large commercial entities to provide small farmers with the kind of knowledge and skill sets they require to deliver quality produce, while training geared toward farmers on quality infrastructure in areas such as health and phytosanitary conditions meeting the standards of food production required for market penetration.
Meanwhile it was president of the CDB, Dr.Gene Leon who said the bank had plans to improving policy implementation capacity by 50 percent by 2035. Part of this he said entailed building a financial ecosystem that distinguished financing from recovery, rescue and repositioning. This he said helps provide an understanding of legacy debt stock and how the new flow financing will work in areas needed for development. This requires a wide array of financing instruments underpinned by a strong regulatory environment and an appropriate financing market infrastructure.
Dr.Leon says the bank intended to embark on funds raising from donor nations and the private sector with its eyes set on some US$100B over the next nine years through 2030.