Prime Minister Mia Mottley is eager to see a new funding model for the CARICOM Development Fund (CDF), suggesting that the ability of the Fund to be maintained at a certain level is at risk.
“With the best will in the world, this Fund cannot be sustained purely from the contributions of the more developed countries as they are known in the Revised Treaty of Chaguaramas,” said Mottley, Chairman of CARICOM, as she welcomed regional prime ministers on Tuesday to the 31st CARICOM Inter-Sessional Meeting of the Conference of the Heads of Government here.
“It is against this background that I hope this meeting will reflect and resolve on the best way to ensure the CARICOM Development Fund is capable of better accessing funds, both regionally and internationally, to ensure that those who may be affected or disadvantaged as a result of our commitment to come together can benefit by being able to have access to concessionary funding that they would not otherwise have access to,” she said.
Pointing to the over US$50 billion in savings in the region, Mottley said given the negligible interest rates they were attracting, a way should be found to put those savings to use to help in the development of the region and its people.
“We trust and pray that this conference will make appreciable progress in that regard,” she said.
The CDF, which became operational in August 2009, was established to provide financial or technical assistance to so-called disadvantaged countries, region and sectors within CARICOM.
In a brief interview on Tuesday, former CARICOM Chairman Dr Keith Mitchell told Barbados TODAY the regional bloc was seeking to get international partners to help finance the CDF.
“That is one of the things we are asking more development partners like Canada and the others – to help put some funds in there for us because it is an area we have serious deficiency,” he said.
“The question is getting the appropriate funding for some of the things we want to do because as you know we have difficulty in the region in getting some of the larger countries meet their commitments. So we are asking other countries to provide some support for that CDF.”
The CDF’s Chief Executive Officer Rodinald Soomer told Barbados TODAY that CARICOM leaders gave the assurance on Tuesday that they would continue to support the Fund, acknowledging that its sustainability was a long-standing issue for CARICOM.
He said the major constraint related to the fiscal challenges that regional governments faced, but they would continue to look for innovative ways to raise the necessary funding to support the Fund.
“We, of course, have to be opened to proposals. The proposal that was discussed at the meeting as part of the report from the Commission on the Economy, is supposed to be put now to the Prime Ministerial Subcommittee on the CSME [CARICOM Single Market and Economy]. So it is only when that discussion takes place we will know exactly what shape this additional financing will take, what modality,” said Soomer.
He said the second cycle of funding for the CDF was scheduled to end this year, but was likely to be extended until 2021. This is to allow owing member states to meet their obligation and for programmes to be designed and implemented.
“I believe new modality for financing will be considered in the context of the capitalization of the fund for the third cycle,” said Soomer.
He reported that there were still some member states that were behind on their pledged contribution to the Fund, and it was a matter that was “being taken up by the Heads in caucus”.
Up to the middle of last year, Barbados, which is considered one of the more developed countries, owed about US$7.4 million, which Mottley pledged to pay up.
Barbados TODAY understood at the time that in order to clear its arrears, the Mottley administration would have issued the CDF with Government paper for up to half the portion of the sum owed, and paid the remainder in cash at a later date.
Soomer declined to say what payment has been made so far or by what method, but said he has seen some progress with Barbados and other countries meeting their pledges. Trinidad and Tobago, Jamaica and Suriname had also owed the Fund.
“We are actually expecting payments in the short-term, but I am not at liberty to say where these will be coming from. What I can say definitively is that Barbados is well on its way now to be fully financially compliant, and we expect by April that Barbados will be fully paid up,” he said.
Between the time of its establishment and 2015, the Fund disbursed some US$51 million in grants and loans to member states, and between 2015 and 2020, the figure to be disbursed is estimated to reach US$72 million.
