Countries in this region that benefit from the Caribbean Development Fund (CDF), are at risk of getting less assistance for critical projects in the future because the more “developed” countries are not meeting their pledged contributions.
As a result. the CDF, the organization established to provide financial and technical assistance to disadvantaged countries in the Caribbean Community (CARICOM), may have to scale back on projects expected to come on stream in under two years as the region’s more developed countries are slow to pay up for the second funding cycle.
Chairman of the CDF Board of Directors Dr Sherwyn Williams told reporters that the fund could be forced to scale back on the number of projects it would assist needy countries with if owing member states did not meet their financial obligations to the CDF for the second funding cycle.
Last year Barbados TODAY revealed that Barbados was the second most indebted country to the fund, owing its pledged US$7.4 million as at December 31, 2016. At that time, the fund was owed a total of US$57.2 million, with US$40 million of that outstanding from Trinidad and Tobago.
During 2017 the CDF received contributions from two member states, St Kitts and Nevis and Belize, completing their second cycle commitment, while the outstanding balance was received from Jamaica.
Today Williams made an appeal for owing countries to pay up, insisting that not doing so could affect future projects of those who really need it.
“We have enough resources to continue the programmes that we have already agreed to. However, if we do not get all of the subscriptions that were due in the second cycle, there is a possibility that we may need to scale down operations, not projects that are discussed, but scale down new projects that will be anticipated for 2020. We are hoping that this will not be the case,” he said.
As at December 31, 2017, total fund balance was US$122.42 million or two per cent above that reported for 2016. This increase reflected payments from the three member states which brought the net contribution to US$109.42 million at the end of 2017.
Following last year’s hurricanes, which left a trail of destruction in a number of Caribbean territories, officials had expressed concern at the annual meeting at the end of September that the fund could approach a “critical” stage since member countries were expected to request more assistance.
For 2017 the less developed countries (LDCs) of St Lucia, Belize, Antigua and Barbuda, St Kitts and Nevis, Guyana, Dominica, and Grenada benefited from the fund as 17 disbursements of loans and grants totaling US$4.27 million and US$5.01 million, respectively, were made during the reporting period.
That total disbursement of US$9.28 million in 2017 was 28 per cent higher than the previous year. In line with this performance, the loan portfolio recorded another year of growth at eight per cent from US$23.6 million in 2016 to US$25.71 million last year.
The fund has undisbursed balance of US$7.3 million in its coffers as at December 31, 2017.
Chief Executive Officer of the CDF Rodinald Soomer said the response from member states in relation to their payments was not what the fund expected, indicating that they were still too slow in meeting their obligations.
Without naming them, he said there were currently four member states that still owed the fund for cycle two.
However, Soomer said the CDF was aware of the financial restraints facing the regional economies and was therefore taking a different approach with those countries by engaging them “in one-on-one” dialogue.
“We recognize that they have their fiscal challenges and the approach they seem to be buying into is that if we can move quickly to design programmes that they can benefit from then we have their subscriptions coming in, do our appraisal and board consideration and turn back the resources as quickly as possible so that there is no significant loss of revenue for the country,” he explained.
He said the CDF had no issue with the quality of the programmes for which the countries were seeking technical assistance, grants and loans.
Pointing out that the CDF was perhaps not the only regional institution having challenges in getting member countries to pay their dues, Soomer disclosed that the CARICOM Secretariat was working on a system to ensure for automaticity of financing for regional institutions. This would ensuring there is less more consistency by contributing governments.
“This is work that CARICOM should really accelerate and focus on so that all the regional institutions that have their mandates to execute can be properly resourced and do the work that they are required to do for the community,” said Soomer.
The officials, who were speaking to members of the media on Tuesday on the sidelines of the CDF’s seventh annual meeting of contributors and development partners at the Hilton Barbados Resort, did not issue a timeline for countries to make good on their outstanding contributions.