BASSETERRE, St Kitts, Thursday May 21, 2015 – President of the Caribbean Development Bank (CDB), Dr. Warren Smith is urging regional governments to set aggressive timelines for implementing reforms that create more “business-friendly” environments.
Speaking at the official opening of the 45th Annual Meeting of the Board of Governors of the CDB in Basseterre, he said fiscal rules, backed by tough legislation, must become the norm rather than the exception, adding that the building of fiscal buffers should also become an integral component of every national sustainability strategy.
In his overview of the CDB performance over the past year, Dr. Smith noted that the bank had continued its own internal reforms to help borrowing member countries (BMCs) address longstanding social and economic challenges. Among them, modernisation and strengthening of the Bank’s governance framework were key areas for reform.
“Such institutional arrangements are already a pre-condition for access to certain types of financing . . . and are likely to become a standard pre-condition for access to all development financing. Should this prove to be the case, the CDB will be in a very favourable position,” he said.
Also in an assessment of the CDB’s operational performance and some of internal reforms undertaken over the past four years, he said the bank worked hard to maintain a strong presence in BMCs.
“Approvals grew by US$770 million, lower than had been anticipated. This was mainly attributable to our inability to engage in policy-based lending because we had reached our lending limit for this product,” Dr. Smith told the Governors and delegates.
Despite these challenges, the CDB exceeded target approvals of US$320 million for the concessionary window by some US$28 million.
“This is a testament to our BMCs’ resolve to maintain their social programmes and to provide adequate social safety nets to the most disadvantaged groups in the society,” Dr. Smith added.
He also reiterated a call for the forging of a new Global Partnership. According to the CDB head, if the shared vision is the eradication of extreme poverty, then the Caribbean context must be objectively examined. Uniformly ambitious, rather than piecemeal solutions, need to be embraced, he suggested.
In 2013 at the CDB’s 43rd Annual Meeting in Castries, St. Lucia, Dr. Smith had appealed for a broad-based “Compact of Co-Operation” between Caribbean countries and the wider international community to deal with the issue of sovereign indebtedness in the region.
He noted at the time that he had asked for a re-examination of the strongly-held view that middle-income countries, like those in the region, did not qualify for debt relief.
“In 2014, I raised the issue of debt again in Jamaica at a High Level Caribbean Forum sponsored by the International Monetary Fund (IMF). In that forum, I challenged the large multilateral institutions to use their balance sheets creatively, as CDB had done in St. Kitts and Nevis in 2011, to address this country’s debt problem. Borrowing member countries that adhere strictly to adjustment programmes supported by the IMF and other financial institutions would be ideal candidates for such support.”
Dr. Smith said he was putting the issue on the table again at this meeting, noting that the sentiments expressed in St. Lucia and in Jamaica remained just as relevant today, and a solution was urgently needed.