As Caribbean governments continue to consider a way back from the devastation caused to the region’s respective economies due to the still-raging coronavirus, Caribbean Development Bank (CDB) President Dr William Warren Smith says that, as part of the recovery process, countries should consolidate a larger role into their respective private sectors.
“Our orientation should be towards a greater role for the private sector in stimulating economic growth, providing jobs, and gaining foreign exchange through exports,” Smith told the 10th UK-Caribbean virtual Ministerial forum last week. Smith also highlighted two additional priorities for tracking economic recovery and ensuring resilience to counteract the region’s response to the COVID-19 outcome, namely, buffering and economic diversification.
A forum last week, chaired by the British Minister of State at the Foreign and Commonwealth Office, Lord Tariq Ahmad, was convened to enable high-level talks on priority issues for the Caribbean including a comprehensive COVID-19 response, climate change , security and commerce. .
Expressing cautious optimism that the worst of the coronary virus pandemic could be behind the region due to the vaccination program now underway, the CDB president told the forum that the region’s road to complete recovery would nevertheless be burdensome and scary. Even in the face of regional governments’ continued interest in responding to the virus, Smith warned that with the start of the familiar hurricane season less than three months away, preparations for that event could not be delayed. Since 2000 the Caribbean has had to suffer 190 natural disasters that have directly affected the lives of some 14.5 million people. This time around, the region is likely to face the prospect of continuing to cope with the consequences of COVID-19 and the impact of climate change, at the same time.
Against this backdrop, Smith says the Caribbean’s future direction should be towards focusing on “a greater role for the private sector in stimulating economic growth, providing jobs and gaining foreign exchange through exports.” Accordingly, he recommends that regional governments increase efforts to create an ecosystem that is particularly responsive to the needs of small, medium-sized enterprises (MSMEs) as these businesses account for over 70 percent of the all enterprises, 60- 70 per cent of gross domestic product, and 50 per cent employment, including employment for poor and marginalized groups. The CDB also wants governments’ regulatory policies and frameworks to “foster agility, innovation and value creation and incentivize value creation to improve their competitiveness in order to successfully penetrate regional and international markets.”
And according to the president of the CDB, the Bank itself is seeking to play a more central role in supporting the potential of regional medium and small enterprises. He noted that as a specific response to the COVID-19 pandemic, the bank had introduced several appropriate initiatives designed to support the resilience of MSMEs including giving them access to existing lines of credit for working capital purposes to minimize the impact on their businesses. during the downturn brought about by the pandemic.
In his address, the President of the CDB, who leaves office on April 30th after 10 years at the helm, noted that some governments in the region have already been moving to take measures to improve fiscal responsibility and debt sustainability by adopting rules budgetary and debt target setting. . He also highlighted the various risk transfer arrangements available to regional governments, including those offered by the Caribbean Disaster Risk Insurance Facility and Disaster Bonds.