The Dominican Republic is a middle-income country, with the largest economy of Central America and the Caribbean. The country has weathered the global economic crisis well and in 2010 experienced one of the highest growth rates in the region.
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Nicaragua is the first Central American country to sign up to the insurance WASHINGTON, April 18, 2015 - The Council of Ministers of Finance of Central America, Panama and the Dominican Republic ... Show More +(COSEFIN) and CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility) signed today a memorandum of understanding that enables Central American countries to formally join the facility to access low cost, high quality sovereign catastrophe risk insurance.During the ceremony, CCRIF SPC and the Government of Nicaragua also signed a Participation Agreement for Nicaragua to become the first Central American country to formally join the facility. Other member nations of COSEFIN are expected to join CCRIF SPC later this year and in 2016.“For Nicaragua, it is an honor to be the first member of COSEFIN countries to join the CCRIF. This insurance will allow us to strengthen financial resilience to natural disasters and continue our efforts to reduce poverty and respond to climate change challenges as part of our National Human Development Plan,” said Ivan Acosta, Minister of Finance of Nicaragua.Nine countries in Central America and the Caribbean experienced at least one disaster with an economic impact of more than 50 percent of their annual gross domestic product (GDP) since 1980. The impact of Haiti’s earthquake was estimated at 120 percent of GDP. The same year, tropical cyclone Agatha, in Guatemala, had devastating consequences and poverty rates increased by 5.5 percent. Climate change also represents a significant development challenge, with average annual economic losses due to weather-related disasters amounting to 1 percent or more of GDP in ten Caribbean countries and four Central American nations, including Nicaragua.Established in 2007, CCRIF is the world’s first multi-country catastrophe risk pooling mechanism which offers sovereign insurance at affordable rates to its members against hurricanes, earthquakes and excess rainfall. Currently, 16 Caribbean countries are members of CCRIF.The facility enhances the fiscal resilience of its member countries to catastrophes caused by natural hazard events by providing immediate financial resources in the aftermath of a disaster, allowing governments to better respond to the initial needs of their populations and continue providing critical services. Since its inception, CCRIF has made twelve payouts totaling US$35.6 million to eight member governments. All payouts were transferred within two weeks after each event.“After exploring options for engaging in sovereign disaster risk financing, Central American countries concluded that joining the CCRIF SPC facility was the most efficient and cost-effective insurance mechanism to pool our risk”, said Martín Portillo, Executive Secretary of COSEFIN. “This will allow us to reduce our countries’ fiscal vulnerability to the adverse effects associated with earthquakes, tropical cyclones, excess rainfall and other events.”This new 23-nation partnership will benefit both existing and new CCRIF members, providing low prices due to more efficient use of capital and insurance market instruments. New members will be able to take advantage of CCRIF’s low premium costs and existing members could realize premium reductions due to the increased size of the CCRIF portfolio. This partnership between Caribbean and Central American countries could strengthen economic engagement throughout the greater Caribbean Basin.“We foresee a range of benefits to both regions emanating from this partnership,” said Milo Pearson, Chairman of CCRIF SPC, “including the creation of a strategic mechanism in which Caribbean and COSEFIN countries can share best practices in disaster risk management and learn lessons from each other in advancing collaborative approaches to reducing vulnerabilities to hazards, alleviating poverty, enhancing debt and financial sustainability and creating a framework for the sustainable prosperity of the countries of both regions.”The World Bank provided the initial finance and technical advisory services to establish CCRIF in 2007 and in 2014 the Bank supplied resources to finance entrance fees to CCRIF for Honduras and Nicaragua, as well as annual insurance premiums for four years.“This a real example of a regional public good where collective action has clear financial benefits and can help countries tackle the adverse impacts of climate change,”, said Jorge Familiar, World Bank Vice President for Latin America and the Caribbean. “We look forward to deepening our engagement with COSEFIN, CARICOM and CCRIF as part of this ambitious regional initiative.”About CCRIF SPCCCRIF was developed under the technical leadership of the World Bank and with a grant from the Government of Japan. It was capitalized through contributions to a multi-donor Trust Fund by the Government of Canada, the European Union, the World Bank, the governments of the United Kingdom and France, the Caribbean Development Bank and the governments of Ireland and Bermuda, as well as through membership fees paid by participating governments. Show Less -
Average Latin America and Caribbean Growth Down to 0.8 Percent This YearAbsent Structural Reforms, Future Growth May Remain LowLesson Learned: Domestic Saving Can No Longer Be OverlookedWASHINGTON, Ap... Show More +ril 15, 2015 – With China growing at a more moderate pace and commodity prices stabilizing at lower levels, Latin America and the Caribbean will need to adapt to a “new normal.” Average GDP growth in the region, slowing down steadily and sharply since 2011, is expected to reach only 0.8 percent this year, and may remain at low rates in the future unless ambitious pro-growth structural reforms are adopted. A boost in savings, which would need to be a key ingredient in a pro-growth agenda, would also help rebuild monetary and fiscal policy maneuvering space.In its latest semiannual report, “Latin America Treads a Narrow Path to Growth: The Slowdown and its Macroeconomic Challenges,” the World Bank´s Office of the Chief Economist for Latin America and the Caribbean forecasts a fourth year of slow growth for the region. The report concludes that the strong growth of the 2000s is not likely to revisit the region, unless vigorous pro-growth reforms are adopted. “The evidence suggests that the external shocks emanating from China’s deceleration and terms of trade changes are permanent,” said Augusto de la Torre, World Bank Chief Economist for Latin America and the Caribbean. “In the absence of growth-friendly structural reform, this situation firmly points in the direction of an also permanent growth slowdown for the region, with rates that would be insufficient to support significant social progress.”Beyond averages, the region continues to tell a widely diverse story. Commodity exporting countries in South America are growing at a much slower pace than commodity importers in Central America and the Caribbean. Especially hurting among the exporters is Venezuela with its economy expecting to shrink again by 5 percent in 2015. Also in negative territory would be Brazil and Argentina, countries with very different realities but both pulling the regional average down due to their larger size. This year the slowdown is expected to hit other South American commodity exporting countries, such as Bolivia, Colombia and Ecuador, which had delivered relatively strong growth through 2014. Meanwhile, commodity importers in the region are benefitting from lower prices and will see growth in 2015 above the regional average, with particularly strong growth rates expected for Panama, Nicaragua, and Dominican Republic. Mexico, benefitting from the US recovery, is expected to grow this year also above the regional average.The report, issued ahead of the World Bank Group and IMF Spring Meetings, finds that Latin America and the Caribbean decelerated more than all other emerging regions. This reflects the amplification effects of an unusually strong decline in investment among commodity exporting countries in the region.In this less favorable external environment, leaders in Latin America are facing diverse policy response options to stimulate their economies. Commodity importers, such as the countries of Eastern Caribbean, will have an easier path given lower commodity prices and U.S. economic recovery. Commodity exporters with little exchange rate flexibility will likely face a much harder time, as the transition to the “new normal” will have to rely on a significant reduction in aggregate spending.“Hindsight is 20/20. But we can say now that both the private and public sectors in many countries in the region interpreted the change in the external environment, and hence the nature of the deceleration, as transitory. This resulted in continued expansions in spending even as income growth was declining, which ended up reducing monetary and fiscal maneuvering space,” said de la Torre. “Looking forward, it is now clear that adopting policies to stimulate savings will be important to strengthen the foundations for growth and macroeconomic stability. This is a tall order that will take time, but it will show that we learned from our experiences.” Currently, Latin America’s savings rates stand at about 10 percentage points below Asia’s. According to the report, higher saving rates would provide more breathing space for both monetary and fiscal policy. In addition, there is increasing evidence that savings can promote growth by both underpinning a more depreciated real exchange rate, and reducing the dependency on foreign savings. Both, in turn, would boost external competitiveness, and reduce the cost of capital, respectively, enhancing the sustainability of growth. The evidence shows that countries that save more, have more competitive exchange rates, export more, and grow more.Learn more about the work of the World Bank in Latin America and the Caribbean: www.worldbank.org/lac Visit us on Facebook: http://www.facebook.com/worldbankBe updated via Twitter: http://www.twitter.com/BancoMundialLAC For our YouTube channel: http://www.youtube.com/lacregion2010 Show Less -
ChallengeSmall-scale indigenous and Afro-descended cacao farmers in Honduras were engaging in poor farming and production practices and lacked the necessary entrepreneurial skills and management knowl... Show More +edge to expand production and increase their sales into new market. The challenge was to introduce new environmentally sound farming and production methods and create an entrepreneurial mentality for sustainable growth and development. In addition, with improved production and quality, the farmers would need to learn how to market and negotiate prices.SolutionThe World Bank’s South-South Unit sponsored the trip by the 10 Honduran farmers, members of the mestizo, Pech, and Afro-descended communities of both genders. Each farmer represented a farmers’ association. Drawing on the experience of the farmers in the Dominican Republic, the South–South Exchange provided the Honduran farmers with the training to manage cacao production as a lucrative enterprise.In addition, the Bank-supported Environmentally Sustainable Cacao Production for Small-Scale Indigenous Peoples and Afro-descendant Farmers Project (AGROCACAO) provided an operational development model that promoted territorial development and agroforestry to foster environmental protection, conservation, and recovery of damaged and eroded areas. The project targeted small cacao farmers in the departments of Atlántida, Olancho, and Gracias a Dios. The project focused on promoting agroforestry as an environmentally friendly activity to improve the farmers’ livelihoods. The project also promoted organic production using native species, which are more resistant to diseases and are known for their excellent quality. It also provided technical assistance for the farmers and entrepreneurs.ResultsThe visit to the Dominican Republic provided the Honduran cacao farmers with the opportunity to improve their knowledge in a number of areas: Organization planning and resource management: The farmers visited and learned about the organizational model and structure of the National Confederation of Dominican Cocoa farmers (Conacado), one of the country’s leading exporters with more than 8,500 small farmers.Organic and sustainable cultivation methods: The farmers also visited the departments of El Seibo and María Trinidad Sánchez, where they learned about organic methods to optimize the cacao production and reduce some diseases.Cocoa chain value: The four women farmers visited the Women’s Association “Esperanzas Unidas,” where they participated in the elaboration of cocoa derivatives, such as chocolate, jam, and cocoa butter.Fair trade commercialization: The farmers learned about the process and importance of acquiring fair trade certificates to obtain a better selling price and better conditions for their communities.Marketing: The farmers learned about the various markets for the different qualities of cocoa beans and the different organic and fair trade certifications. They also visited the farm of Eric Reid, the owner of a gourmet chocolate factory, where they learned about this specific market niche.The farmers who travelled to the Dominican Republic introduced the lessons learned to their organizations and other groups through workshops organized around Honduras. AGROCACAO also showed tangible results in the number of beneficiaries, the number of hectares cultivated, the establishment of chocolate factories, and in the enhancement of skills. The project exceeded by almost 200% its target of reaching 1,000 farmers. As a result of these efforts, beneficiaries who were required to provide 10 percent as counterpart have provided up to 46 percent. The President of the Republic of Honduras will inaugurate one of the chocolate factories on April 9, 2015. Bank Group ContributionThe Bank’s South-South Unit supported the South-South Exchange visit to the Dominican Republic.PartnersThe Japan Social Development Fund (JSDF) funded the AGROCACO project with a grant of US$2.25 million. The coordination of the South-South Exchange was a joint effort with the implementing agent, the Asociación Coordinadora Indígena y Campesina de Agroforestería Comunitaria Centroamericana (ACICAFOC). In the Dominican Republic, the National Confederation of Dominican Cocoa Farmers (Conacado) organized the visits to the factories and the farms, and arranged for the participation of local producers Cristóbal Mejía and Eric Reid.Moving ForwardDonors, governments, and the private sector have expressed interest in the project’s development model. Recognizing the project’s success, the Bank’s management has encouraged scaling up AGROCACAO in Hondurans and in other countries in the region. To achieve that objective the Bank is preparing a dedicated Trust Fund. The model has also been discussed with other development Banks to promote an integrated notion of territorial development.BeneficiariesLeonidas Zavala Domínguez, one of the farmers from the Olancho department, said that he had broadened his knowledge about the drying of the cacao bean and how to improve its quality “The challenge now is to identify a market for our products”, added Leonidas, while saying that he will replicate in his farm what he learned. Maura Eligia Duarte, from a Pech community, mentioned that she had learned how to prepare artisanal chocolate and other cocoa derivatives. Show Less -
Bank Group ContributionThe Bank’s South-South Unit supported the South-South Exchange visit to the Dominican Republic.PartnersThe Japan Social Development Fund (JSDF) funded the AGROCACO project with ... Show More +a grant of US$2.25 million. The coordination of the South-South Exchange was a joint effort with the implementing agent, the Asociación Coordinadora Indígena y Campesina de Agroforestería Comunitaria Centroamericana (ACICAFOC). In the Dominican Republic, the National Confederation of Dominican Cocoa Farmers (Conacado) organized the visits to the factories and the farms, and arranged for the participation of local producers Cristóbal Mejía and Eric Reid.Moving ForwardDonors, governments, and the private sector have expressed interest in the project’s development model. Recognizing the project’s success, the Bank’s management has encouraged scaling up AGROCACAO in Hondurans and in other countries in the region. To achieve that objective the Bank is preparing a dedicated Trust Fund. The model has also been discussed with other development Banks to promote an integrated notion of territorial development.BeneficiariesLeonidas Zavala Domínguez, one of the farmers from the Olancho department, said that he had broadened his knowledge about the drying of the cacao bean and how to improve its quality “The challenge now is to identify a market for our products”, added Leonidas, while saying that he will replicate in his farm what he learned. Maura Eligia Duarte, from a Pech community, mentioned that she had learned how to prepare artisanal chocolate and other cocoa derivatives. Show Less -
Even though female workers comprise 40% of the world’s labor force, the International Labor Organization estimates than nearly half of women’s productive potential is not being used.But a study by the... Show More + International Finance Corporation (the World Bank Group entity that works with the private sector) reveals that if companies hired more women, they would not only help to protect women’s rights, but also improve their businesses.The report analyzed different aspects of women’s employment and included suggestions on how to estimate the benefits and calculate the costs for a company that decides to open its doors to the female workforce.The report also presents six case studies of companies in different regions around the world that obtained concrete benefits from hiring women and establishing policies to promote gender equality in the areas of recruitment, management and wages, or developing flexible maternity, family and health policies. The companies were:Odebretch (Brazil): This construction company significantly increased the number of potential candidates to occupy jobs ranging from entry level positions to top management posts, enabling the company to access the best talent available.Anglo American (Chile): Despite preconceived notions that this firm’s jobs were “man’s work,” this mining company decided to hire female workers, which increased its productivity and innovation, strengthened team dynamics and streamlined the decision-making process.Continental (Thailand): Women make up 41 percent of the staff of this auto parts supplier. In a country where there are few engineers and few well trained local employees, this company managed to attract and keep the type of workers it needed.Finlays Horticulture (Kenya): In two years, the internal promotion of 69 women saved this agricultural company the US$ 200,000 it would have cost to hire and train new employees.Mriya Agro Holding (Ukraine): In rural Ukraine, women live up to 10 years’ longer than men. In addition, many men emigrate. By hiring women under good working conditions, this company keeps more employees and has a good relationship with the community – which in turn helps attract investors.Nalt Enterprise (Vietnam): In 2008, this clothing exporter established a daycare center for employees’ children. Since then, monthly staff turnover has decreased by a third. This means a savings of nearly US$500 for every employee it did not need to replace.Latin American barriersUnfortunately, these types of initiatives are uncommon in Latin America. In some countries in the region, barriers to women’s employment are not only cultural but often legal and administrative as well.World Bank Economist Elizaveta Perova says that “the lack of flexible, family-friendly policies, together with traditional gender roles that assign women household responsibilities, impede women’s access to paid employment.”These constraints carry considerable weight, for example, in many women’s decision not to pursue more lucrative careers in science, technology, engineering or mathematics. This is compounded by practical difficulties, such as the absence of affordable, quality childcare services for the children of working mothers.Nevertheless, the work of Latin American women was crucial for enabling the region to make significant progress in overcoming extreme poverty. Approximately 30% of the reduction in extreme poverty between 2000 and 2010 is attributed to the work of women, according to experts.To combat stereotypes, experts recommend creating programs to develop non-conventional skills for women to promote their interest and opportunities in engineering, mechanics and other traditionally “male” sectors. Show Less -