Barbados, Dominica collaborating on resilience investment

Barbados is engaging the services of the International Financial Corporation (IFC) in association with Dominica, as the two countries seek to embark on a pilot project to spur private sector investment in resilience.

Chairman of the CARICOM Commission on the Economy Avinash Persaud gave the update on Wednesday during an online discussion.

He noted that a lot of residents and private sector companies have “written off” the 15-member bloc because of the seeming lack of progress being made in implementing various projects.

However, he gave the assurance that with the latest report, it will not be business as usual.

“CARICOM has appeared stuck for too long, and they don’t believe anything good will come of CARICOM. That is a very strong position perhaps more held in Jamaica, but it is quite common across the region especially among the businesspeople,” said Persaud.

But he insisted that progress was now being made, as he highlighted ongoing discussions between CARICOM and the region’s telecommunications operators for a single roaming rate and the drafting of an enhanced cooperation protocol where five countries can move ahead with implementation of a proposal without requiring the support from other all members.

Coming out of the report is also a recommendation to speed up private sector investment in resilience by creating new requirements for households and enabling the issuance of a new asset class of bonds that would fund it.

In that regard, Persaud disclosed that Barbados was working with Dominica and the IFC to come up with potential projects for such an investment.

“So Barbados and Dominica are going through a pilot scheme with the IFC, where they are going to come up with a list of private sector projects to generate revenues,” said Persaud, adding that those projects would be sustainable.

“So we can then create the growth and resilience bond we are talking about which will be investing in anything above a particular rating that an independent body has determined the sustainability rating. So here you have a mechanism to help the private sector investing in resilience and sharing that resilience burden,” he said.

The economist said the bill for making countries in the region resilient was well in excess of US$20 billion, far in excess of whatever governments can actually afford.

“So we need to engage the private sector. The private sector will be prepared to engage in things that have a revenue stream but the private sector will tell you they don’t mind investing but give me the good things to invest in and give me the things that will help resilience. So what that means is some classifications,” he said.

Persaud did not give a timeline for the pilot project to start.

Barbados has already embarked on some aspect of the resilience measure, having included a natural disaster clause in the restructuring agreement when Government restructured its debt two years ago.

This move is expected to free up some seven per cent of gross domestic product should the island experience a natural disaster and need to put a hold on debt repayment.
(MM)