The occasion is the 41st annual meeting of the board of governors of the Caribbean Development Bank (CDB), on May 25 and 26 at a time of great challenge for the bank’s borrowing member-countries, all of which are still affected to varying degrees by the post-2007 global recession and are being assisted by the CDB in the efforts at recovery.
A few have sought stabilization assistance through IMF programs, under conditions from the Straus-Kahn regime which some observers have assessed as much less onerous on the receiving countries than were some previous IMF assistance packages.
Shareholder-countries of the CDB are 17 English-speaking territories in the region, together with Colombia, Haiti, Mexico and Venezuela, and Canada, China, Germany, Italy and the United Kingdom. An application from Brazil has been accepted by the bank, but there is yet to be an announcement that the membership formalities have been completed.
The World Bank, the Inter-American Development Bank and a number of other major international development institutions, as well as non-member countries, also contribute loans and grants in support of the CDB's lending program for capital and technical assistance projects and annually are invited as guests to the public sessions of the governors' meeting.
At Port of Spain, one of the managing directors of the World Bank, Dr. Ngozi Okonjo-Iweala, is scheduled to present the William G. Demas Memorial Lecture, an annual feature of the meeting, which commemorates the services to the bank and the region of a former CDB president.
The United States is not a member of the CDB because it considers the bank a sub-regional development institution and expresses itself as constrained by Congress from joining. But, in earlier years, the U.S. made substantial contributions by way of loans, and grants for special programs, one of which, the Basic Needs Trust Fund, is widely regarded as the most popular within those countries to which it applies. This Fund has been continued and is being expanded by resources from the CDB, the Special Development Fund, beneficiary member countries and the government of Canada.
However, since the turn of the century, the CDB, an institution which has demonstrated its capacity to intermediate foreign financing capably, honestly, competently and effectively, has attracted only dwindling U.S. interest and assistance and not much has been forthcoming, either, since the June 2009 Summit of the Americas in Port of Spain, which was President Barack Obama's first foray in the region.
This week's meeting is taking place at the beginning of a new focus on a heightened role for the CDB in helping to meet the development challenges of the region. Shareholder-governments agreed when they met in The Bahamas in May 2010 to an increase of $1 billion in the bank's authorized share capital. Also, contributors to the bank's Special Development Fund – its “soft lending” window – agreed to a substantial increase in its resources.
Further, the CDB has announced that it has joined with four other leading international financial institutions active in the Caribbean in a landmark agreement which reinforces their commitment to ensuring long-term economic growth across the region, resilience to the global financial crisis and effective deployment of assistance for reconstruction efforts in Haiti.
This agreement, called the Caribbean Joint Action Plan, will enable more effective use of financial and technical assistance by encouraging a stronger focus on each participating institution’s experience and capabilities.
Under the plan, joint investments totaling $850 million will be concentrated on crucial economic sectors seriously affected by the economic slowdown: finance, tourism and infrastructure.
The other participating institutions are the European Investment Bank, the Netherlands Development Finance Company, the International Finance Corporation – part of the World Bank Group – and PROPARCO, the private sector arm of the Agence Française de Développement Group.
The bank has gone into the Port of Spain Meeting under new leadership, with Dr. William Warren Smith, a Jamaican, having just two weeks ago, succeeded to the presidency from Dr. Compton Bourne, a Guyanese who served two five-year terms. Dr. Smith becomes the fifth CDB president since the bank began operations in 1970.
The institution, which has its headquarters in Barbados,, has an exceptional reputation within the international development financing fraternity, for through the 41 years of its existence, it has never been touched by even a breath of scandal – neither financial infelicities nor moral depravities – and, in the area of its operational efficiencies, the bank has repeatedly been scoring a “Triple A” rating from some of the world's foremost rating agencies.
The CDB’s greatest challenge lies in its geographic area of operation and the annually recurring season of storms.
The period from June 1 to November 30 is officially classed as the Caribbean hurricane season but severe weather could occur, as is the case this year, well before June and extend well after the end of November.
Extensive damage is done to housing, farmland, economic infrastructure such as roads, bridges, seaports and airports and, as in the case of borrowing member-country Haiti, in January 2010 the capital city Port-au-Prince was substantially destroyed by an earthquake.
Demand for the bank's financing and staff expertise is always great in its member-countries which borrow, as they face major challenges from nature, loss of trained manpower through a constant outflow of migrants to mostly North America, scarce locally generated resources and constrained lending capacity in recession-hit donor countries.