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OUR CARIBBEAN: CDB: Alerts and assurances for member states

Rickey Singh

OUR CARIBBEAN: CDB: Alerts and assurances for member states

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The president of the Caribbean Development Bank (CDB), Dr William Warren Smith, blended some firm warnings with assurances on the way forward for regional economies, amid the lingering global financial crisis, when he held his first regular annual media conference at the institution’s Wildey headquarters on Tuesday.
Speaking as fifth president of the Caribbean Community’s premiere financial institution for fostering regional economic development, Dr Smith, the first Jamaican national to hold this position, first referenced some of what  “needs to be done” during 2012 by the CDB’s 18 borrowing member countries (BMCs).
With Guyana and Haiti identified as the two “most encouraging examples of economic growth” – above five per cent in 2011 – and set for similar repeat performances this year, he lamented the prevailing twin ills of high levels of indebtedness and unemployment across the region, as well as the “extremely limited” fiscal space for growth while pointing to three areas for action by policymakers.
These he identified as:
• The “urgent pursuit” of reforms to economic management, including public financial management and the development of statistical capacity, in order to ensure “efficient, evidenced-based allocation and use of resources”;
• Giving “priority” to development and maintenance of well targeted social safety nets to minimize the fallout from fiscal consolidation and external shocks for the most vulnerable in society;
• seeking to create an environment in which the private sector can emerge as “the new engine of economic growth, job creation and poverty reduction . . . ”.
And what of the role of the CDB, as a major facilitator of financial and technical assistance via vital aid flows from non-borrowing members in Europe, Asia, North America and Latin America?
Smith’s response was the recognition of the need for changes in the functioning of the regional institution itself so as to be “nimble and creative” in efforts to help the current BMCs to do things differently to reflect an understanding of the challenges of our time.
Well, as the fifth president – after Sir Arthur Lewis, Dr William Demas, Sir Neville Nicholls and Dr Compton Bourne – Dr Smith knows that the devil would be in the details of policymakers’ responses to the “should-do” initiatives he has identified, as well his allusion to “nimble and creative” changes envisaged for the CDB. Like the University of the West Indies, the CDB stands a key pillar of the Caribbean Community.
Perhaps in consideration of “changes” to deal with some of the domestic challenges they currently face, the policymakers of borrowing member countries should, therefore, reassess how to better utilize independent intellectual resources of the CDB – this 43-year-old institution that last year made total disbursements of US$167 million, including grants, to the borrowing member countries.
The prognosis, according to the CDB, is that the BMCs will continue to face “binding constraints, including underdiversified economic structures; underdeveloped infrastructures and a lack of private sector competitiveness, as well as weaknesses in the area of financial regulation and supervision . . . . ”

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