Bahamas PM urges continued IDB support for the Caribbean
NASSAU, Bahamas, Feb 20, CMC – Bahamas Prime Minister Perry Christie says Caribbean countries are still suffering from the effects of the recession but were continuing to put in place measures to ensure their future socio-economic development.
Christie, who is also the Caribbean Community (CARICOM) chairman, told the opening of the opening of the Inter American Development Bank (IDB) Caribbean Governors Regional meeting here, that even as the region continues to emerge from the recession of 2008, “the scars of what we have already had to endure are glaringly evident”.
He told the delegates, including IDB president Luis Alberto Moreno, president of the Caribbean Development Bank (CDB), Dr. Warren Smith and finance ministers from several CARICOM countries, that challenges are still confronting the region that is adhering “to sound policies and to follow sensible public sector investment strategies so that our growth prospects can be maximized”.
He said that the recession had “exposed many of our own structural frailties and raised to a critical level the multi-faceted dependence we all have on the IDB, the CDB and other international financial institutions”.
Prime Minister Christie said that healthy growth speaks to reducing, in many cases, unacceptably high unemployment, “a problem that is especially vexing among the youth of our respective jurisdictions.
“Healthy growth also speaks to the imperative of addressing our major social maladies, chief among them crime and poverty,” Christie said, noting that “most solutions point to the need for a more prominent role for the private sector in developing and sustaining the engines of economic growth.
“ In this regard, we anticipate that the reform of the IDB’s private sector lending framework will also result in increased financing for a broader range of economic growth-producing enterprises within the Caribbean.”
Prime Minister Christie said that although the pace of economic growth is uneven “ our regional outlook is beginning to improve, premised in many instances on strengthening tourism demand and in other cases on healthy export markets for natural resources.
“This is a direct result of the unorthodox fiscal policies and aggressive central bank interventions that are guiding and propelling the world’s leading economies through their respective recoveries.”
He said that the technical and financial support from international financial institutions and development agencies, including the IDB and the CDB cannot be understated “as they continue to undergird the pivotal reforms to our own policy frameworks that position us to take optimal advantage of the recovery trends in the global economy”.
Prime Minister Christie said that he is aware the IDB is re-examining its lending framework to ensure that it remains responsive to the increased demand for development financing within the context of fiscal consolidation imperatives that limit the capacity of the major industrial countries to fund development lending in the less developed world.
“At stake therefore is how assistance is given out and how it is directed on a regional and country-by-country basis.
“The IDB must, I would submit, be mindful of its critical role, both technical and financial, in supporting the vulnerable and highly indebted countries in our region. When we must borrow, the ease of access to such funding must not be unduly or unreasonably inhibited.
“ The tendency to categorize our respective countries as middle or high income must be discounted against our very fragile existence, especially having regard to our narrow economic bases, our high structural costs and our increasing vulnerability to climate change and natural disasters,” Prime Minister Christie said.
He urged the IDB president to use his influence to ensure that the “concerns of our region are not relegated to the sidelines but instead are put on the front burner with a view to remediation”.
Prime Minister Christie thanked the Washington-based IDB for its role in the socio-economic development of the Caribbean, adding “we continue to welcome the interventions that are being made in Haiti.
“An economically prosperous and stable Haiti would augur well for all countries in this region, and particularly so for The Bahamas which, as you know, bears a disproportionately large share of the cost stemming from the outward migration from Haiti to the North.”\
Christie said he was also hopeful that the reform of the private sector lending arm of the IDB will also bear fruit for the region.
“High public sector debt in itself is compelling us to accelerate the emphasis on private sector driven growth and to explore how to structure fiscally prudent public-private partnerships with a view to addressing more of the infrastructure gaps which, in turn, would lead to stronger private sector growth.”
But Prime Minister Christie said “while I commend the bank for its visibility in the region, its presence in the private sector needs to increase, and it needs to be especially registered in making the tourism sector more diversified and resilient.
“As the primary engine for growth for most of our economies, we must find new ways of increasing and broadening local ownership in the sector, and to promote more eco-based developments,” he said, urging that the bank to review its strategy on investing in the tourism sector and engage in more discussions with our Governors on how best to support such projects in the Caribbean.
The meeting here will discuss a number of issues including proposals for the organisational structure and capitalisation of the IDB’s private sector agency, and long-term financial policies of the Bank, including the long-term financial policy framework and the capital adequacy policy.
The discussions here are in preparation for the annual meeting of the IDB Board of Governors, which will be held in Korea from March 26 to 29 this year.