New, interesting, innovative and adaptable instruments have to be created to assist those countries that are unable to navigate the current recession.
This was the view of Minister of Finance and Economic Affairs, Christopher Sinckler, as he addressed the opening of the Third Inter-American Development Bank’s Annual Retreat of Caribbean Civil Society Consultative Groups, today at Hilton Barbados.
Sinckler told his audience that the IDB was seen as a champion in that regard.
He said: “We believe that the IDB, through its extensive research and human resource capacity, should be able and will be able to meet the challenge of working with our countries to safely navigate the choppy waters of this international recession, even as we work with our partners in civil society to ensure that those marginalised in our communities can continue to participate in the life and livelihood of their own countries.
“It means, therefore, that what we require of the IDB is that it truly continues to live up to its mantra as a development bank. We see the IDB
as a development institution, understanding development in ways that other international financial institutions do not and, therefore, the responsibility of all of the members and the management of the bank is to ensure that that process continues into the future.”
The minister argued that the IDB should never see itself as a second rate version of the International Monetary Fund.
“It is not. It should not see itself as aspiring to become the World Bank, it will never be that. It is a development institution constructed and established to serve its members and to ensure that those who are going through difficulties are able to manage those successfully. Successful member countries need a successful bank, the failure of your membership means essentially a failure of the bank,” he opined.
He stressed that whether a project or financing options were being offered by the bank to a country, realistic and achievable goals had to be established.
“Setting unrealistic goals, establishing unrealistic mechanisms of compliance, whether it is in projects or otherwise, and then lamenting that we have not been able to achieve what we said we wanted to achieve, is not a remedy for success. It actually is a remedy for failure. It is a remedy for defeatism, and it does not achieve the goals which we want to achieve,” he surmised.
Sinckler said that over the last two decades, many of the countries in the Caribbean had suffered successive hits by international economic actions, most of which they had very little control over.
“For Barbados it has been clear as well, we have been cut off from concessional financing from the World Bank and many other institutions because of our level of economic development. We are, therefore, forced to go on the international capital markets to borrow money or to borrow money in other cases at very high interest rates. Equally, we have had to suffer the problem of liberalising our markets in international global trading agreements.
“We no longer have preferential access for our products into the European Union, with the United States and we are currently negotiating liberalisation of market access into Canada. It means, therefore, that not only do we have to access resources at higher prices and really at world competitive prices on the private capital markets, we also have little leeway into markets on a preferential basis because our preferential arrangements have been removed.
“But added to that, we have to have the constant battle of fighting to protect our international financial and business sub sectors against repeated claims of being tax havens, which is not true, of course. We are a low tax regime but we do tax and we do regulate,” he pointed out.
ConSoC is a forum for exchanging information, strengthening dialogue and facilitating ongoing consultations between the IDB and the civil society organisations that are pertinent to the bank’s work in the 26 countries where it operates. Through ConSoC, the IDB seeks to obtain comments and suggestions from Caribbean CSOs regarding its initiatives, in order to improve its effectiveness in the social and economic development of borrowing countries.