President Dr Gene Leon warns Caribbean Development Bank must expand to stay relevant.
The new president of the Caribbean Development Bank (CDB), Dr Gene Leon, has warned that the bank may simply be too small to remain an effective partner for the region in a changing and challenging global environment.
Speaking at the 51st annual meeting of the bank’s board of governors, Dr Leon said: “If the bank is to function as an effective development partner in the drive towards the Sustainable Development Goals (SDGs) and beyond, it must remain relevant and fit-for-purpose, and be appropriately sized, skilled and structured. Our preliminary estimates suggest that to reach our goal of halving poverty by 2030 would require more than a doubling of average CDB lending.”
The predicted financing gap may be part of the reason so much of the region is falling behind on the UN’s sustainability ambitions. Only seven of the CDB’s 19 borrowing member states have yet submitted voluntary national reviews reporting on the pace of their SDG implementation.
Even among those that have submitted reviews, most cite inadequate funding and responses to natural hazards as major hindrances to their progress. They also suggest insufficient data and statistical capacity is in place for good policy-making. That prompted Dr Leon to put forward a plan to resolve the data and policy challenge.
He told the meeting: “We need to measure better to target better. That includes building data architectures and databases to better inform our evidenced-based decision making; involves improving capacity in data analytics, leveraging developments in big data and digital technology; and requires better measurement of the impact of our vulnerabilities and articulating better the nexus among enabling resilience for increasing public value, promoting priority growth-oriented investment, and managing financing needs for debt sustainability.”
Such a data hub could include a distance-to-SDG tracker that would update not only on implementation issues but on the remaining progress still needed and on financing shortfalls. The hub could also become a resilience tracker – something especially important in a region highly susceptible to natural disasters and extreme weather events.
Dr Leon explained: “Natural hazard events increase the capital needs of a country and suggest the interest rate at which this capital is financed should be appropriately lower. This is counter to the standard market dynamics, where increased perception of risk would increase the rates of interest required of countries in the wake of a natural hazard event; and would push those rates to levels that lead to adverse debt dynamics, given lower output trajectories and higher interest rates.”
Dr Leon became president of the CDB in May of 2021. He has a doctorate in economics and has previously spent over 20 years with the IMF.
