By Kenton X. Chance
GEORGETOWN, Guyana (CMC) — Barbados Prime Minister Mia Mottley Monday said CARICOM nationals should consider investing their savings in the CARICOM Development Fund (CDF), rather than leaving it in financial institutions that offer almost no interest.
Addressing the opening of the the two-day AfriCaribbean Trade and Investment Forum (ACTIF23) here, Motley said that the CDF has become a shareholder of the African Export-Import Bank (Afreximbank), of which 11 CARICOM nations are also members.
Mottley said she feels that the CDF is the glue that holds together the CARICOM Single Market and Economy (CSME), which allows for the free movement of goods, labour, services and finances across the 15-member grouping.
“And if there is one great regret that I have is that it has taken us too long to be able to come up with a mechanism to allow us to be able to have Caribbean people also be able to participate in a financing mechanism through which the CARICOM Development Fund can play the critical role that must play under Chapter Seven of the Revised Treaty of Chaguaramas,” she said, mentioning the accord that brought the CMSE into being.
“We have one of the most successful single markets in the world,” Mottley said of CARICOM, which celebrated its 50th anniversary this year.
“Don’t fool ourselves, after the European Union, ours is perhaps still the most successful. Africa has now committed to it. We have been going for some time,” she said, adding that the revised treaty sort of resolved one of the issues that caused difficulties for the CSME.
“And it is a genius of an idea for the crafters of the Revised Treaty of Chaguaramas. However much you integrate, there will be winners and losers. And we found a formula that allowed us to identify disadvantaged countries, … disadvantaged regions … and disadvantaged sectors,” Mottley said.
She noted that under the CDF, disadvantaged countries, sectors or regions are entitled to be able to borrow at concessional rates to finance their development.
Mottley said that when the CDF was started, former Barbados prime minister, the late Owen Arthur, along with other regional leaders, tried to help with its financing.
“But many of our friends globally have not seen the need or urgency to support the region in tangible ways with respect to the CARICOM Development Fund,” Mottley said.
“And that is why we said that we needed to turn within the region and to create an opportunity where those persons who have money in savings accounts in the region and are receiving 0.0001 per cent might well recognise that there’s an opportunity to get a larger percentage return on interest if they involve themselves in things pertaining to CARICOM development.
“I hope that with the work done by the CARICOM Development Fund and USAID (United States Agency for International Development) that we can get to that stage,” Mottley said.
The Barbados prime minister said that more importantly, she hopes that with the CDF being a shareholder of Afreximbank, there can be innovative ways to tap in the significant amount of savings and liquidity lying dormant in CARICOM.
These savings, she said, are “laying dormant, not receiving proper interest rates and not therefore being able to work for itself particularly in an inflationary environment, such as the one in which we find ourselves today, at the same time, with a development deficit that needs financing”.
She noted that President of Guyana, Irfaan Ali, speaking in the same ceremony, had noted that there is a funding gap of US$4.2 billion in Latin America and the Caribbean as regards attainment of the United Nations Sustainable Development Goals (SDG)by the 2030 target date.
“I say to you that one of the reasons why we went to Paris in June of this year was to be able not to discuss planet alone, but planet and people because you may find yourselves winning one battle and losing the other. So I hope therefore that we can move in this direction to deepen the relationship.”
Mottley noted that governors of central banks in CARICOM are scheduled to meet in Jamaica on Wednesday even as a number of CARICOM nations have “have already accepted the wisdom of the Pan-African Payment and Settlement System (PAPSS)”.
The prime minister expressed hope that the central banks governors will have a fuller discussion, adding “because and it is appropriate that I say so where we are in the headquarters of CARICOM, the CARICOM multilateral clearing facility was intended to be able to facilitate trade in the region without the hard currency reliance.
“It is as valid today a problem to be resolved as it was decades ago when the CMCF was put in place. And I believe that the Pan African payment settlement system is critical for us to examine because above anything else, we need someone who is prepared to underwrite the trade.
“And effectively, that is what you have done with the PAPPS system in Africa, significantly improving the opportunities of trade within Africa. And we believe the same can be possible here in the Caribbean,” Mottley said.
ACTIF23 is being held under the theme “Creating a Shared Prosperous Future”, and is convened by Afreximbank and the Government of Guyana.
ACTIF23 focuses on consolidating commercial collaboration between the Caribbean region and Africa, for increased inter-regional trade and investment, building on the successes of the inaugural edition that was held in Barbados, in September 2022.