The Barbados-based Caribbean Development Bank (CDB) has urged regional countries to adopt the position of a sprinter whilst having the endurance of a marathoner amidst the lingering effects of the coronavirus (COVID-19) pandemic and the upheavals created by the Russia-Ukraine war.
CDB President, Dr. Hyginus “Gene” Leon says the financial institution is positioning itself to assist regional countries to meet their developmental goals amidst these challenges.
Leon recalled that after he became head of the Caribbean region’s premier financial institution last year, he had said then that the board of governors must move with deliberate haste.
“I also said that there can be no sustained development without resilience, and because development has to be holistic, meaning leaving no aspect behind, resilience must therefore be multi-faceted, and so we need a resilience ecosystem capable of absorbing the exogenous shocks we are exposed to,” he told the opening of the 52nd annual meeting of the CDB Board of governors.
“This year’s meeting takes place against the backdrop of the enduring aftermath of COVID-19 and now the impact of the Russia-Ukraine war. This conflict has already affected commodity and financial markets, raised energy prices, increased inflation, heightened food insecurity, and slowed global growth.”
Leon said the sharp increase in energy prices is further straining fragile fiscal positions in CDB borrowing member countries (BMCs) and threatening to derail the nascent economic recovery.
“Even as growth in the Caribbean region is expected to rebound to around six percent in 2022 — on the strength of the rebound in tourism and the performance of Guyana — and from an average decline of around nine percent in 2020, roughly half of our internationally rated BMCs have suffered credit downgrades since the onset of the pandemic.”
Consequently, many Caribbean governments are now “challenged to walk an economic tightrope while, at the same time, trying to drive the development agenda.”
Addressing the governors directly, Leon said sustainable recovery “now hangs in the balance and the imperative to aggressively pursue resilience is even more urgent.
“With this in mind, I take as my starting point today the words of my dear friend and brother (President of the Africa Development Bank (ADB), Dr. Akinwumi A. Adesina]) we must be prepared to sprint fast like Shelly-Ann Fraser Pryce of Jamaica and run long like Eliud Kipchoge of Kenya – that is to say – we must accelerate our development trajectory and we must be able to stay the course over the long haul, that is developed once started must be sustained. “
Leon said the 2030 developmental targets are not just boxes to be checked off, adding that “the path we embark on must take us beyond 2030”.
Addressing the issue of accelerating and sustaining development, Leon first reflected on the past year, saying that in his maiden presentation to the board of governors last year, he outlined an agenda that focused on “the transformative and sustainable development of our BMCs with the ultimate goal of improving the welfare of our people.”
Leon said he has been consistently promoting this approach regionally as it speaks to development that is both holistic and inclusive, with resilience and innovation as cornerstones.
“The fundamental themes around which much of my efforts have been centered are sustainable livelihoods; resilient economies; connectivity; and innovation hub,” he told the meeting, being held under the theme “Measure Better to Target Better: Adaptation and Resilience.”
The St. Lucia-born CDB president said these themes are fully aligned with the 2030 Sustainable Development Goals (SDGs) that the region needs to pursue expeditiously “if we are to fundamentally alter the development path of the region and place our societies on a higher and more resilient sustainable welfare path in the future”.
He said the challenge is how best to navigate a safe path from legacy structural weaknesses to transformative development, while maintaining debt sustainability, enhancing macroeconomic and financial stability, and building resilience against a myriad of shocks.
Among shocks, he highlighted climate change, “which if unchecked can pose an existential threat to our region.
“Governors, with the best of intentions and with access to adequate and affordable finance, our efforts will labor in producing results without a significant jolt to our implementation capacity,” he said, adding to achieve this, the CDB’s first order of business was to revise its strategic plan to reflect the changed context and circumstances of the Caribbean development trajectory.
“Reflecting our new vision, we anchored the revised plan on five dimensions of resilience – social resilience, productive capacity resilience, environmental resilience, institutional resilience, and financial resilience.”
Then, in alignment with a key theme over the past year of measuring better to target better, the CDB recognized that it needed to become “a knowledge-enabled learning organization — a virtual knowledge hub, a network of networks capable of accessing global information, culling experiences of and factors contributing to success, and creating value through strategies that, when implemented, can yield transformative development,” Leon said.
He said the philosophy of embracing knowledge creation — from accumulation to discovery to strategic transformation — “touches everything we do and manifests in every development challenge we face”
These range from achieving food security to compiling the genome structure of herbs for creating medicines to designing resilient roofs capable of withstanding the fury of hurricanes while providing an adequate supply of clean, renewable energy. In other words, we need to embrace the industrialization of knowledge.
“This will require improvements in current processes, organizational culture, technology, and a fearless growth-oriented mindset to underpin our knowledge management and evidence-based decision creation.”
Leon said the knowledge hub could encompass a tracker for the region’s development progress; be a platform for policy options and design based on the SDGs; promote warehoused information on feasible and development-driven investment opportunities, the regulatory environment, and doing business conditions that could promote cross-border investments; include a database with comparable economic, social, and environmental statistics, and partial-screened project ideas that could help advance sustainable development; and provide a fertile ground for spawning innovative ideas and products.
He further said in recognition of the fact that the internal resilience capacity of CDB BMCs must be accounted for in determining their ability to recover from exogenous shocks, the Caribbean Development Bank made steady progress with the development of the Recovery Duration Adjuster (RDA).
This builds on the UN Multidimensional Vulnerability Index by integrating vulnerability and resilience in a dynamic and forward-looking manner to better reflect the economic, social, and environmental realities of small island developing states (SIDS).
“This framework focuses on measuring the internal resilience capacity of SIDS which, because of their peculiar vulnerabilities and state of development, face the reality of a much longer recovery time from a shock compared with developed nations.”
Leon told the meeting that the framework proposes to replace gross national income which is widely recognized as an inadequate metric to determine access to concessional finance, with an internal resilience capacity metric for gauging a country’s eligibility to access adequate and affordable financing.
“We launched this framework at the 26th United Nations Climate Change Conference (COP26) in November 2021 in the United Kingdom and have since held discussions and made presentations to several stakeholder groups including the Commonwealth Secretariat, the Alliance of Small Island States, and the United Nations High-Level Panel on the Multi-Dimensional Vulnerability Index,” Leon said.
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