President of the Caribbean Development Bank Dr Warren Smith. (Picture by Lennox Devonish)
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The Board of Directors of the Caribbean Development Bank (CDB) met this week and approved up to US$140 million to be used by the Bank’s Borrowing Member Countries to tackle the fallout of the COVID-19 pandemic and other shocks to their economy.
“The economic and social shock of the COVID-19 pandemic will likely be severe in most Caribbean countries. There is the additional concern that the situation could be exacerbated in the near future given our region’s vulnerability to natural disasters, and with the hurricane season less than two months away. We, at CDB, stand ready to assist Caribbean countries to alleviate these shocks,” said president Dr Warren Smith.
Taking into account the high degree of uncertainty, it is expected that at least 1-2% could be shaved off previous estimates of global growth as a result of COVID-19. For the Caribbean region, as a whole, the impact could be even more profound.
“The extent of decline of gross domestic product will depend on the duration of the pandemic and the effectiveness of the policy responses by the countries. Our goal is to ensure our Borrowing Member Countries get access to appropriate financing during the COVID-19 pandemic and to be their partner in the post-crisis recovery,” said Dr Smith.
CDB has responded to its Borrowing Member Countries’ need for assistance during this crisis by increasing the limit on its policy-based loans. These loans are designed to respond to exogenous shocks and to support economic growth and poverty reduction through policy reforms. Since the first policy-based loan in 2006, CDB has provided some US$875 million for such loans.
CDB is often the main partner that a number of the Borrowing Member Countries rely on for financing, technical assistance and policy advice during crises.
“The US$140 million allocation is the first of a package of assistance that CDB is developing to assist our Borrowing Member Countries to cope with COVID-19. Our financing and technical assistance, during this period, will be directed mainly towards the most vulnerable within our societies and give the highest priority to strengthening social safety nets,” Smith added. (PR)