BARBADOS- Caribbean countries’ Gross Financial Needs (GFN) is likely to remain elevated to 2030 largely as a result of the COVID-19 pandemic, increasing their need for external financing to maintain debt sustainability.
At the annual news conference held on January 18, at the institution’s headquarters in Bridgetown, Barbados, the President of the Caribbean Development Bank (CDB), Dr. Hyginus “Gene” Leon highlighted the situation.
In general, GFN is a measure of a country’s overall fiscal position, which includes revenue and expenditure balances, plus any funds needed to repay debts.
According to Dr. Leon, in addition to GFN requirements, the outlay necessary to address vulnerabilities exposed by the pandemic, and the resources required to achieve the Sustainable Development Goals (SDGs), CDB’s Borrowing Member Countries (BMCs) would require extensive financial support from international finance institutions.
“The onset of COVID highlighted structural weaknesses in our economies and the extent of our financing need,” the CDB President said. He went on to make a series of recommendations that he indicated could “meet the Region’s financing needs and address mounting fiscal pressures”.
Among the prescriptions outlined were expanding regional financial systems to facilitate capital flows and attract private sector interests to finance development through regional savings.
In addition, the economist emphasized the need to strengthen public financial management and expenditure systems to ensure transparency and accountability in government spending and to link the allocation of resources to government strategy.
In addition, Leon warned that several years of consecutive shocks, prospects for a slowdown in the global economy, and continued price pressures in 2023 could derail the Region’s progress.
“In this context, CDB continues to emphasise resilience as the primary ingredient for sustainable economies and societies. Key to achieving resilience is reducing our vulnerability to factors outside of our control while employing the elements within our power to achieve our development objectives,” he said.
Among his recommendations were deepening regional integration and cooperation, a renewed commitment to the CARICOM Single Market Economy, and improved intra-region connectivity and transportation, among others, for accelerating growth, building resilience, and driving transformation in BMCs. Moreover, Dr. Leon called for collaborative advocacy and action to address common threats to the Region’s future, such as climate change, food security, and energy security.
The Bank President highlighted several areas of the private sector that he identified as triggers for growth and development. In his speech, he urged this constituency to become partners in development instead of bystanders, and urged regional governments to “create an enabling environment and ensure that public value propositions offer viable investment opportunities for private capital”.