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World Bank to Help Caribbean Nations Regain Growth Path

March 12, 2010

  • Bank to strenghten partnership as region faces unique growth, trade and climate challenges in post economic crisis scenario.
  • CARICOM chairman expresses his support for Bank’s recapitalization at meeting of heads of government in Dominica.
  • Haiti features prominently on meeting agenda with pledges of support from Bank and CARICOM members.

ROSEAU, Dominica, March 12, 2010 - World Bank President Robert B. Zoellick renewed the Bank’s commitment to help the Caribbean nations build a sustainable and inclusive growth following a gathering of CARICOM heads of government in Dominica.

As the region struggles to overcome the effects of the global economic crisis, Zoellick noted that the Bank can be a partner in a post-crisis scenario where CARICOM states, especially smaller ones, face unique challenges in terms of economic growth, trade, climate change, water and natural disasters.

As the world looks to 2010 for the grip of the global economic crisis to lessen and recovery to take firmer hold, it is important to realize that there are still dangers to economic growth,” said Zoellick after meeting with government leaders gathered in Dominica for the 21st inter-sessional meeting of CARICOM –a group of 15 Caribbean nations promoting economic integration and cooperation among its members.

Describing his discussions with the Caribbean leaders as useful, Zoellick said that he addressed many key issues facing the region including the economic crisis, climate change, and financial jurisdiction issues.

I very much appreciated our useful discussions and the practical problem solving approach of CARICOM leaders. I learned important insights from the leaders' exchange,” he indicated.

Attending leaders noted the benefits of CARICOM’s long-standing relationship with the World Bank over the years. Education reform –the region’s success story- has seen secondary school attendance surge by 60% thanks to the Bank’s unwavering support and involvement, said Dominica’s Prime Minister and CARICOM Chairman Roosevelt Skerrit.

World Bank programs in the CARICOM region include 45 operations focusing on economic policy, urban development, and education, among other areas, for a total of US$733.7 million. In addition, it manages over 70 active Trust Funds for an equivalent of US$89.6 million in grants.

Skerrit also signaled that CARICOM will continue to forge a deeper partnership with the World Bank. “We must say that so far, we have been getting tremendous support and co-operation from the World Bank and we look forward to forging, for the want of a better word, an alliance with the President of the World Bank to seek to advance the issues which confront CARICOM,” he said.

Support for capital increase

In order to sustain the Bank’s continued and vital support, Skerrit argued in favor of a capital increase for the multilateral institution. He said that the recapitalization would allow the World Bank to better respond to challenges confronting CARICOM.

Haiti featured prominently on the meeting's agenda. Caribbean leaders urged the international community to continue focusing on Haiti after the tragic earthquake of January 12. "We want to ensure that Haiti continues to be at the centre of our agenda and that the international and regional community do not forget Haiti now that the headlines are no longer on Haiti,” Skerrit argued.

Zoellick met with Haitian president Rene Preval in Washington on Tuesday to discuss the Bank’s support in the coming months.

So far, the institution has mobilized an additional US$100 million in grants, as well as its global reconstruction expertise, in response to the earthquake. Additionally, the Bank’s private sector arm, the IFC, has made a US$35 million investment to help boost jobs. The World Bank also joined other donors in 2009 granting Haiti US$1.2 billion in debt relief through the Heavily Indebted Poor Countries initiative and the Multilateral Debt Relief Initiative.

The debt issue is not alien to CARICOM nations. It was raised at the Dominica summit where CARICOM Secretary-General Edwin Carrington described it as “a difficult one”, as most nations have been struggling with a debt problem for some 17 years now.

Zoellick explained that the World Bank is willing to look at the debt situation of each country, in order to identify options for each one.

In our exchange on debt, we have explored ways in which the World Bank can work to help countries identify options and customize a framework for debt sustainability and economic growth,” he said.

Other areas of cooperation highlighted at the meeting include climate change and financial jurisdictions. Zoellick noted that CARICOM is particularly active on climate change, and that the world is increasingly recognizing the needs of the small island states.

The World Bank can help CARICOM with increasing its resilience to climate change, innovative financing, and low carbon growth strategies that include a focus on reducing the cost—and increasing the efficiency-- of energy in the region.”, the executive said.

The Bank's private sector arm, the International Finance Corporation, is exploring opportunities to support renewable options, such as geothermal, hydro, wind and solar, along with an energy efficiency program.

With regards to financial jurisdictions, Zoellick addressed the range of issues the region faces in complying with international standards under the OECD and G-20. He reiterated the Bank’s commitment to supporting countries with advice and assistance to put the necessary legal frameworks and treaties in place.

While it is in the region's interest to complete these steps as quickly as possible, we recognize their special circumstances and are pleased to work with countries as needed on the implementation path.”