CDB challenged to double lending to meet poverty reduction goal
THE latest Caribbean Development Bank (CDB) annual report showed that the bank disbursed US$306 million to borrowing member countries (BMCS) in 2019, but the regional financial institution has been urged to double that disbursement if it intends to reach its poverty reduction target.
Poverty rates in the Caribbean are already high – largely clustered between 20 and 40 per cent.
Newly elected president of the CDB Dr Gene Leon believes the prevalence of poverty in the region will no doubt worsen as a result of the novel coronavirus pandemic, which has pushed the region further away from achieving the United Nation’s sutainable development goal (SDG) of slashing regional poverty in half by 2030.
“Our preliminary estimates suggest that to reach our goal of halving poverty by 2030 would require more than a doubling of average CDB lending,” said Leon.
Leon was making his inaugural presentation at the opening ceremony of the 51st Annual Meeting of the Board of Governors of the CDB, streamed live yesterday.
The CDB president said this underlines the magnitude of the task at hand, the need for multiple sources of funding and financial instruments, as well as a clear identification of the role that CDB is expected to play in marshalling this development finance. He noted that such considerations require further discussion on the fit-for-purpose size of the bank.
In the same vein, he argued that completing the full establishment of the Caribbean Caricom Single Market and Economy (CSME) is a crucial component in achieving the SDGS.
“It is not only about creating a larger market to facilitate scale; it is also about partnering with the private and other non-public sectors to co-create markets and institutions, aimed at achieving a common purpose,” Leon added.
But first he argued that the region must resolve its data and implementation deficit. “We need to measure better to target better, that includes building data architectures and databases to better inform our evidence-based decision-making,” stated Leon.
With that in mind, the CDB president made a proposal to create a data hub at the bank that would be the go-to portal on regional data.
“Could we not design and build a distance-to-sdg tracker that updates not only implementation but associated measures of distances to benchmarks, quantum of financing needs, and estimates of concessionary terms that could facilitate more rapid reductions in these distance metrics? Could we not extend this to a resilience tracker that informs on various dimensions of resilience and therefore our ability to recover or sustain a growth momentum?” he said.
At the same time, he noted that eliminating poverty, advancing standards of living, delivering equitable prosperity and ensuring that no one is left behind will depend critically on the region’s ability to innovate.