By Kenton X. Chance
PROVIDENCIALES, Turks and Caicos Islands (CMC) — Guyana’s Finance Minister, Ashni K. Singh, has urged the governors of the Barbados-based Caribbean Development Bank (CDB) not to allow their first face-to-face meeting in two years to lead to a false sense of post-pandemic normalcy.
“Lest we be mistaken, the fact that we are meeting face-to-face should not lull us into believing that we have returned to any semblance of comfortable normalcy. In fact, we are meeting in times that are anything but normal,” Singh told the CDB’s 52nd annual meeting that ends later on Thursday.
“To begin with, the battle with the coronavirus (COVID-19) is far from over,” said Singh, who spoke on behalf of CDB’s borrowing member countries (BMC).
He said that over the last week, 3.3 million new cases of COVID-19 were reported worldwide, of which 2.3 million came from Europe and the Americas.
“As a result of COVID-19, global production and supply chains are still disrupted, with shipping costs rising by more than seven times since March 2020. The war in Ukraine has further dislocated supply of key commodities.”
To illustrate his concern, Singh said wheat prices have gone up by as much as 60%, given that Russia and Ukraine account for 30% of global wheat exports.
“The result is a delayed recovery from the pandemic, with sharp downward revision in growth forecasts and even sharper upward revision in inflation forecasts, raising the risk of stagflation,” he said, adding that for the Caribbean, ‘the vulnerabilities which we all knew prior to COVID-19 have now been laid bare”.
Singh said that in 2021, the BMCs were estimated to have grown by “a modest” 3.1% and the 2022 projection is ‘a more respectable” 9.1%.
However, he said this growth is heavily concentrated, with only five of the 19 BMCs projected to grow at rates at or above this pace.
“At the same time, we continue to carry a heavy debt burden, with 13 of our countries ending 2021 with a debt to GDP ratio of more than 60%, and four of our countries ended the year with a ratio above100%. The result is that our prospects for achieving the Sustainable Development Goals are even dimmer today than they were three years ago,” Singh said.
He said the implication of all this is that “the Caribbean needs the CDB “our bank now more than ever before, as we tackle the longstanding problems of economic diversification, infrastructure gaps particularly in transport and energy, human capital development, access to basic social services, food security and, of course, climate vulnerability”.
He called on the region’s premier financial institution to pay special attention to resource mobilisation and intermediation, project approvals and disbursements, net flows to BMCs, and regional integration and intra-regional trade.
Singh said resource mobilisation and intermediation is a core function in the CDB’s original mandate.
“The success in 2021 in securing the US$383 million replenishment for the 10th Cycle of the Special Development Fund is, therefore, commended, and the role played by contributors to this replenishment much appreciated.”
He said the partnership with the United Kingdom on the Caribbean Infrastructure Fund is also an outstanding example worthy of replication and the financing of projects contributing to economic development of the BMCs is the CDB’s core business.
“Maintaining a strong record of project approvals and disbursements should be a paramount objective, to be pursued actively and aggressively. Reduced approvals and disbursements affect net flows to BMCs. And, increased net flows are critically needed by BMCs, especially at times like these,” Singh said.
He told the meeting that regional integration and intra-regional trade are germane to the CDB’s objectives.
“At the Agri-Investment Forum and Expo held in Guyana last month, the Bank advised that it will use its best efforts to mobilise resources in support of a regional initiative to establish adequate and sustainable regional transportation, a historical impediment to regional trade especially in agricultural produce.”
The Guyana Finance Minister said the CDB has an incomparable convening authority in the region, which should be deployed to support such regional initiatives.