The Board of Governors of the Barbados-based Caribbean Development Bank (CDB) began a two-day meeting on Wednesday, May 25, in Trinidad and Tobago against the background of a new growth trajectory to help ease the insecurity affecting Caribbean economies.
CDB President Dr Warren Smith
Newly-appointed CDB President Dr Warren Smith said economic conditions in the region remained depressed, with only seven countries — The Bahamas, Barbados, Belize, British Virgin Islands, Guyana, St Lucia and the Turks and Caicos Islands — reporting growth in 2010. But he said demand for CDB financing was sustained, with approvals of loans and grants reaching approximately US$300 million, compared with US$167 million in 2009.
Net transfer of resources — which is disbursements of grants and loans and less repayments of principals, interest and charges — between CDB and its borrowing member countries amounted to US$180 million in 2010, considerably in excess of net resource transfers of US$70 million in 2009. Smith, the fifth president of the region’s premier financial lending institution, said he expects most Caribbean countries to return to economic growth this year.
“However, the weak fiscal position will continue to be challenging, and will require sustained emphasis on fiscal consolidation and careful debt management. But Smith said that while the Caribbean has witnessed impressive improvements in socio- economic performance over the past five decades, issues about the quality of the education system remain a major concern; sustained growth and development continue to elude many countries; and poverty remains unacceptably high.
The Jamaican-born CDB official said that the principal economic insecurities currently facing the region have been exacerbated by structural weaknesses and extreme vulnerability, linked especially to small size, openness, narrowness of the production base, and proneness to potentially devastating natural hazards. “The economic structure has been further undermined and industry competitiveness challenged by volatile oil prices since the 1970s, and the deeper integration of Caribbean economies into the international financial and economic systems through globalisation.
“The signing of the 2008 Economic Partnership Agreement signalled the end of unreciprocated preferential access by Caribbean exports into the European Union (EU) market. New insecurities were created as agriculture production, farm incomes and employment declined; small farmers, especially in banana and sugar producing countries, were displaced; and poverty levels rose, and dramatically so, in rural communities,” he pointed out.
He said, too, that as the 2008 global economic and financial recession unfolded, and the Caribbean experienced its impact, vulnerability increased. He said the recent collapse of the Trinidadian conglomerate CLICO and its subsidiary, BAICO, reverberated throughout the region and resulted in major losses to both institutional and private investors, despite rescue efforts of regional governments.
