THE WORLD BANK’S PROJECT PIPE­LINE IN SAINT LUCIA

The Star (St. Lucia) - Business Week - - DEVELOPMENT FINANCE – MAURITIUS - BY ED KENNEDY, STAR BUSINESSWEEK COR­RE­SPON­DENT

Oc­to­ber saw the news the World Bank would pro­vide $20 mil­lion of fund­ing to­wards strength­en­ing the pub­lic health care sys­tem here in Saint Lucia. This ini­tia­tive it­self is no­table, yet also fol­lows on from other projects within the na­tion in ed­u­ca­tion, com­bat­ting the im­pact of cli­mate change, and en­ergy de­vel­op­ment.

While any­thing with a head­line price tag like $20 mil­lion will al­ways gar­ner much at­ten­tion and en­thu­si­asm, the di­verse work of the World Bank is some­thing of­ten over­looked un­til it is viewed over­all, just as the pri­or­i­ties of cer­tain Bank projects can of­ten slip by those who may not have an in-depth in­ter­est in the rel­e­vant field.

So what has the track record of the

World Bank’s fund­ing ini­tia­tives in Saint Lucia been like? And how does the Bank ap­proach its work in the wider Caribbean re­gion? Let’s look now.

THE HIS­TORY OF THE WORLD BANK

For na­tions across the globe the World Bank has long played a vi­tal role in fos­ter­ing eco­nomic growth and seek­ing to se­cure sta­bil­ity dur­ing times of cri­sis. Estab­lished fol­low­ing World War II, the Bank is com­monly iden­ti­fied as one or­gan­i­sa­tion. Yet, in prac­tice, it is ac­tu­ally five groups all bound to­gether: the In­ter­na­tional Bank for Re­con­struc­tion and De­vel­op­ment (IBRD), the In­ter­na­tional Fi­nance Cor­po­ra­tion (IFC), the In­ter­na­tional Cen­tre for Set­tle­ment of In­vest­ment Dis­putes (ICSID), the In­ter­na­tional De­vel­op­ment As­so­ci­a­tion (IDA) and the Mul­ti­lat­eral In­vest­ment Guar­an­tee Agency (MIGA).

Begin­ning chiefly with a role of lend­ing and pro­vid­ing loans to na­tions rav­aged by World War II so that they could re­build, sub­se­quent years have seen the bank be­come best known for its role in fund­ing cap­i­tal projects and as­sist­ing de­vel­op­ing na­tions in eco­nomic growth, with the IBRD and IDA serv­ing as the two core wings of this goal.

SAINT LUCIA AND THE WORLD BANK

Within Saint Lucia the World Bank has en­gaged nu­mer­ous projects that seek to ad­dress is­sues that are com­mon around the world, yet lo­cally have unique char­ac­ter­is­tics based on the way in which Saint Lu­cians live and work.

Its re­cent health ini­tia­tive is not only seen as a down-pay­ment on the bat­tle against di­a­betes and heart dis­ease — both of which have be­come more com­mon here — but also as an av­enue to see over 100,000 Saint Lu­cians ul­ti­mately cov­ered by health in­sur­ance. Cer­tainly there re­main in­roads to be made in this sphere in a na­tion of 179,000, but with well over half the pop­u­la­tion to be cov­ered by the end of the project, it is a strong foun­da­tion for the fu­ture.

As this new health ini­tia­tive be­gins, the World Bank’s in­volve­ment in geo­ther­mal re­source de­vel­op­ment across the is­land, that first ob­tained bank ap­proval in De­cem­ber 2014, is now slated for close in Jan­uary 2019. Though the $1.16 mil­lion bud­geted for the project cost is not small fry, it is dwarfed by the $19 mil­lion set aside for the Bank’s ed­u­ca­tion de­vel­op­ment project, and the

$68 mil­lion al­lo­cated to the na­tion’s vul­ner­a­bil­ity re­duc­tion project.

It is with these cold, hard fig­ures that a clear-cut un­der­stand­ing of the Bank’s project pri­or­i­ties in part­ner­ship with Saint Lu­cians can be seen. Many fac­tors go into the com­mis­sion­ing of a project, yet the sub­stan­tive in­vest­ment in health and ed­u­ca­tion, plus the vul­ner­a­bil­ity re­duc­tion project that seeks to com­bat the im­pact of cli­mate change, rep­re­sent cor­ner­stones of build­ing Saint Lucia’s fu­ture eco­nomic growth in part­ner­ship with the Bank.

Within Saint Lucia the World Bank has en­gaged nu­mer­ous projects that seek to ad­dress is­sues that are com­mon around the world, yet lo­cally have unique char­ac­ter­is­tics based on the way in which Saint Lu­cians live and work

THE CARIBBEAN CON­NEC­TION

Along­side Saint Lucia, fif­teen other Caribbean na­tions are mem­bers of the World Bank Group. Ev­ery na­tion has its own unique tri­als but, from the Bank’s per­spec­tive, it iden­ti­fies across re­gional na­tions the threat that en­vi­ron­men­tal fac­tors like cli­mate change and hur­ri­canes can pose. But it also sees the thriv­ing op­por­tu­nity for the fur­ther de­vel­op­ment of ser­vices, lo­gis­tics, and the dig­i­tal and cre­ative sec­tors. With Saint Lucia a mem­ber of the Or­gan­i­sa­tion of Eastern Caribbean States (OECS), it finds it­self amidst a group that can recog­nise in the Bank’s mis­sion a path to spur eco­nomic growth that fur­ther re­duces poverty, and op­ti­mises the use of skilled work­ers to en­sure that growth is sta­ble and on­go­ing.

A BANK FOR THE WHOLE WORLD?

While the World Bank has clearly brought some ben­e­fits to Saint Lucia and other Caribbean na­tions, there are on­go­ing is­sues, when it comes to the World Bank’s struc­ture, that could pose a grow­ing chal­lenge to the na­tions of the Caribbean in the years to come, es­pe­cially given the cur­rent po­lit­i­cal cli­mate glob­ally.

How­ever one looks at it, while the World Bank has 189 coun­tries among its mem­bers, the weight and in­flu­ence of the or­gan­i­sa­tion heav­ily favours the most pow­er­ful na­tions on Earth. The USA, Ja­pan, the Peo­ple’s Re­pub­lic of China, Ger­many, and France make up the top five in terms of vot­ing power.

Each of these na­tions is an eco­nomic heavy­weight in its own right and, when the mind­set is mu­tual, they can form a pow­er­ful bloc that can far out­pace the voice of a smaller na­tion(s) that is a mem­ber.

Yet the era of ‘post-Truth’ of Trump and Brexit has seen a thump­ing re­turn of great power pol­i­tics to the world stage, where eco­nomic heavy­weights flirt heav­ily with full-blown trade wars daily. In this cli­mate, lit­tle na­tions can more eas­ily be squeezed and smoth­ered, and how the World Bank’s power dy­nam­ics play out, re­mains a mat­ter that lit­tle na­tions need to mon­i­tor care­fully.

THE PATH AHEAD

For many lo­cal stake­hold­ers, it is of­ten felt that the ul­ti­mate goal for any na­tion that utilises for­eign fund­ing is to de­velop and grow to a point at which cap­i­tal and fund­ing from abroad is no longer re­quired.

While this per­cep­tion is un­der­stand­able — and cer­tainly there’s a univer­sal as­pi­ra­tion across Saint Lucia to see fur­ther de­vel­op­ment and eco­nomic growth — there re­mains a marked dif­fer­ence be­tween ‘good’ and ‘bad’ debt. Many na­tions (in­clud­ing the rich­est and most pow­er­ful in the world) con­tinue to utilise ‘good’ debt to fund their fu­ture eco­nomic growth.

The on­go­ing chal­lenge for Saint Lucia and other Caribbean na­tions is to build a pro­duc­tive and strong work­ing re­la­tion­ship with the World Bank that sees not only on­go­ing fund­ing de­liver new growth, but also sees the fund­ing de­ployed and utilised most ef­fec­tively.

There is no sug­ges­tion that such a task is easy, just that any who seek a stronger econ­omy for Saint Lucia or less World Bank in­volve­ment can find com­mon mid­dle ground in the most ef­fec­tive ap­pli­ca­tion of World Bank fund­ing go­ing for­ward into the fu­ture.

Saint Lucia’s Prime Min­is­ter Honourable Allen Chas­tanet (left) with World Bank Coun­try Di­rec­tor Tah­seen Sayed

The Of­fice of the Ex­ec­u­tive Di­rec­tor (EDS07) rep­re­sents An­tigua and Bar­buda, The Ba­hamas, Bar­ba­dos, Belize, Canada, Do­minica, Gre­nada, Guyana, Ire­land, Ja­maica, St. Kitts and Ne­vis, Saint Lucia, and St. Vin­cent and theGre­nadines. Col­lec­tively, they rep­re­sent the con­stituency coun­tries in meet­ings at the World Bank Group

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