By Kimberly Ramkhalawan
June 20, 2023
The Caribbean Development Bank is calling for a new way in measuring a country’s economic success outside of its Gross Domestic Product, GDP. This was just one of the many ideas put forward by President of the Caribbean Development Bank, Dr. Hyginus Gene Leon as he addressed the bank’s 53rd Annual Meeting of its Board of Governors, (BOG) currently underway in St Lucia. This year’s theme “Marshalling Finance for Development: Access to Adequate, Affordable Financing”, saw President Dr Leon share that “to advance the global development agenda by adopting beyond GDP measures like the United Nation’s multi-dimensional vulnerability index as guide posts and by extension a broad GDP vulnerability and resilience policy tool to target improving internal resilience capacity of a country and therefore and thereby, it’s sustainable development”.
With the Bridgetown Initiative taking centre stage around the globe, thanks to Barbados Prime Minister Mia Mottley, the CDB President says “it is exploring new and innovative ways to marry the bank’s concessional financial assistance allocated including through the multi-dimensional vulnerability index or its recovery duration adjuster framework.
Noting that many multilateral development banks including the CDB have also been recently designated as prescribed holders of special drawing rights by the International Monetary Fund, Dr Leon says the bank intends to use these SDRs as loans, swaps, pledges in exchange for currency or settling financial obligations among other purposes.
He adds that other efforts on the way include plans “to establish a more robust architecture to address vulnerable countries’ lost and damaged needs including through the Santiago network and the new Lost and Damage fund that the UNFCCC Parties are read to establish at COP 27”.
President Dr Leon is also looking toward partnerships, something he is calling more to be done at the private-public sector level, as he believes that accelerated sustainable development requires this kind of cooperation, partnerships for development between the private sector, the government and the International community. In repeating what he has always said, the CDB head shared that “sustainable development was too important for it to be the exclusive purview of governance. Let us agree therefore that we need to share to grow, sharing opportunities, sharing burdens and sharing responsibilities. Partnerships should therefore take place at various levels, partnerships among multilateral financial institutions, with financial partnerships to effect scale lending along thematic lines, using the example of a green just energy transition that goes beyond national, regional, and continental boundaries.
According to the CDB President, the financing aspect of creating policies and designing instruments are “geared towards developing a resourcing ecosystem that provides liquidity for rescue liquidity, for recovery and liquidity for repositioning based on need and not only on GDP”.
This kind of financial infrastructure is said to “include contingent disaster financing instruments for example a class of guarantees for financing the impact of natural hazards, contingent debt Instruments to cushion the effect of an exogenous shock, instruments for mobilizing and intermediating private sector financing for development, revisiting the sustainability frameworks to incorporate the white class of debt clauses, exploring guarantees to enhance the quality of portfolios and expanding insurance instruments to facilitate resilience”.
With the implementation of “a suite of instruments and affordable financing with appropriate governance frameworks to customize varying needs” Dr.Leon says he is confident that it can “deliver on the promise of resilient prosperity for all of our citizens”.
He vowed that the bank will relentlessly pursue this “ambitious agenda to build internal resilience capacity among its BMC’s using the triology of improving the International development paradigm, building partnerships and strengthening policies”, as it seeks to “demonstrate on match resilience and improve responsiveness as the region’s development bank as we remain true to our mandate, our mandate of transforming Caribbean societies, and committed to safeguarding the vision of resilient prosperity. The fate of the region and the bank are inextricably linked when the region succeeds the bank succeeds it. Is therefore in our collective interest to work together”.