President of the Caribbean Development Bank (CDB), Dr. Gene Leon has restated the need for a multi-faceted suite of financing instruments to drive sustainable development in the Caribbean as the region braces for exogenous shocks from the Russia-Ukraine conflict and other global events.
“In the Caribbean, we are still reeling from the ravages wrought by the COVID-19 pandemic, and we are just beginning to see some faint light in the tunnel ahead. Although growth in the region is expected to rebound to around six percent in 2022 … several threatening storm clouds have already formed that may significantly dampen this encouraging outlook,” he said as he addressed the 52nd Regular Meeting of the Latin American Association of Development Financing Institutions’ (ALIDE) General Assembly on Thursday.
The CDB President cited the fallout from the ongoing Russia-Ukraine war, including rising energy prices, increasing inflation, worsening food insecurity, and the monetary tightening in advanced economies as developments that could negatively impact the region’s sustainable development agenda.
He disclosed that developing countries require between three and five trillion US dollars in annual investment to achieve the Sustainable Development Goals (SDGs) according to estimates from the UN Global Compact Action Platform on Financial Innovation for the SDGs. Dr. Leon emphasized that marshaling the necessary investment will require mobilization of financial resources, strategic, collaborative partnerships, and a strong focus on implementation.
In outlining the way forward, the seasoned economist contended that an allocation from the US$650 billion in Special Drawing Rights (SDR) approved by the International Monetary Fund (IMF) in August 2021 could be utilized for sustainable development financing.
He proposed that developed countries channel two percent of their excess SDR holdings to Multilateral Development Banks (MDBs) to support targeted initiatives that will address the integration of the twin issues of stabilization and long-term sustainable development.
“MDBs are well placed to play this integrative role by forging an internal and temporal consistency among the three key policy frameworks in use: I refer to the debt sustainability framework of the IMF, the investment-growth nexus of the World Bank Group, and the Resilience Building Approach of the United Nations. This unifying perspective is key to providing viable, inclusive, and sustainable solutions for transformative development,” he explained.
Dr. Leon also called for deeper functional cooperation among development institutions in the Caribbean and Latin America and emphasized the need for partnerships with the regional and international private sectors and the regional public sector to achieve common transformative development goals.
“The overarching objective would be to support broad economic development and enhance resilience in our countries through investments in projects aligned with the SDGs and associated with carbon-competitive energy, climate-resilient infrastructure, digitalization, and economic diversification,” CDB’s President said.
CMC/
