The Prime Minister of The Bahamas, Phillip Davis, has called on the Inter-American Development Bank (IDB) to raise the cap on policy-based loans. He made this request during the opening of the 13th Annual Consultation with IDB Caribbean governors on Monday. Davis emphasized the importance of providing developing countries with greater access to funding to support their growth and development.
Mr. Davis is also of the view that the current lending models need to be revamped and for adjustments to investment loans.
We have done the best we can with our current resources, and IDB loans have undoubtedly played a major role in driving regional progress,” Davis said. “But imagine how much more of an impact we could have if we had greater access to the funds we need to fuel our development.”
Davis also emphasized that, while he is committed to prioritizing key areas such as disaster risk management, climate resilience, public sector governance, food security, human development, and citizen security, member countries need more funding to effectively address these national challenges.
“Given the enormity of the threat before us, it is clear that more must be done, regionally and globally, to ensure that our nations are equipped to withstand the challenges ahead of us,” said Davis.
“For the past few years, I have advocated for increased access to climate finance and developmental funding from multilateral development banks and other funding agencies. Today, my message remains the same. As a start, we must have a serious discussion about the expansion or removal of the 30 percent cap on policy-based loans currently set by the IDB.
Davis acknowledged that the increase in the cap to 40 percent on policy-based loans in response to the COVID-19 pandemic was a positive step. However, he emphasized that the threats posed by climate change require “a long-term adjustment” and significant changes to both lending models and policy-based loans.
Currently, the IDB’s policy-based lending is limited to 30 percent of its total lending. Davis argued that to address the growing challenges, especially those related to climate change, the bank needs to make substantial adjustments to its lending policies to better support the development needs of member countries.
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