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Jamaica’s ambassador to the United States, Professor Gordon Shirley, has called on the Inter-American Development Bank (IDB) to move to address the “significant decrease” in loan facilities available for Caribbean member countries over the last five years.
Ambassador Shirley, who was addressing the opening of the 47th annual meeting of the IDB’s board of governors on Monday (April 3) in Belo Horizonte, Brazil, said that the substantial decrease in loan facilities to the region could affect the very “relevance of the bank to our member states” at a time when significant support was needed to assist member countries to advance their social and economic development agendas.
“Lending to the members of our constituency has declined continuously from $289 million in 1999 to $44 million in 2005. Three of our five members had no loan approvals during the year. Moreover, during the past five years, there has been a negative transfer in favour of the bank of $290 million,” he noted.
Calling the international lending agency “more than a bank,” Professor Shirley pointed out that the resources of the Bank could be of greater value to the Caribbean, through the development of a programme of technical cooperation in collaboration with the Caribbean Development Bank (CDB).
The Ambassador, who addressed the IDB on behalf of English-speaking member countries, further urged the institution to forge even greater linkages with the private sector in the Caribbean, which he argued, would serve to enhance the Bank’s relevance to the region.
“(Caribbean) members have so far been able to make little or no use of the bank’s private sector resources, primarily because of the relatively high transaction cost of doing business with the bank, given the size of our indigenous firms. This is all the more regrettable as the private sector accounts for a growing percentage of activity in the open market environment in our countries,” Professor Shirley asserted.
The Jamaican envoy also pointed out that increased funding to small and medium-sized enterprises by the IDB, would be of significant benefit to Caribbean member states and called for “accelerated action” in implementing such a programme.
While acknowledging the bank’s efforts to assist Caribbean countries to address the problem of natural disasters, including efforts to improve disaster risk management as well as the establishment of a fund for the financing of disaster prevention, Ambassador Shirley said that there was need for greater resolve in adopting an organizational approach that focuses on ex-ante risk reduction.
Addressing the issue of public indebtedness and its impact on development, the Ambassador stressed that the phenomenon “remains the single most critical constraint to direct public investment, and to the provision of sovereign guarantees for investments in critical economic and social infrastructure.”
He noted also, that fiscal constraints in some countries had served to restrict the extent to which governments have been able to fill the investment gap, which, in turn, negatively impacted on their capacity for further borrowing from the IDB.
“We feel that the bank needs to be more cognizant of the special requirements of countries in this situation. In the case of Jamaica, we urge an acceleration of the discussions that have begun to identify effective solutions to this problem,” he emphasized.
The three-day meeting, which concluded yesterday (April 5), was the hemisphere’s largest annual economic forum and, in addition to the 47 governors, was attended by representatives from the private sector, civil society, international organizations, and the media.
Meanwhile, President of the IDB, Luis Alberto Moreno, urged Latin America and the Caribbean countries, to use the region’s improved economic performance during recent years, to close the gap on poverty and inequality.