Barbados Central Bank Governor Calls for Focus on Green Initiatives and Technological Advancements in Local Banks
September 30, 2023
The Barbados Central Bank Governor emphasizes the need for local and counterpart institutions to direct cash towards green initiatives, technological advancements, and sustainable infrastructure projects. Funding strategies should be innovative and diversified. Public-private sector partnerships are crucial for launching economically viable and beneficial projects. The Caribbean's financial surplus offers both challenges and opportunities, and central banks play a pivotal role in directing investments towards sustainable growth. Green bonds, climate finance, foreign direct investments, and technology and innovation funds are avenues to access capital for responsible projects. Collaboration with institutions like Afreximbank and China Exim Bank enriches international funding and trade opportunities for the Caribbean.
By Emmanuel Joseph
The Barbados Central Bank Governor is suggesting that local and counterpart institutions need to focus on directing the “abundant” cash in commercial banks towards green initiatives.
Dr Kevin Greenidge said this type of funding should equally be channelled in the area of technological advancements, and infrastructure projects that resonate with the region’s sustainable objectives.
He said funding strategies must be both innovative and diversified.
“Public-private sector partnerships (PPPs) provide a practical avenue for blending the agility of the private sector with the scale and reach of the public domain. These collaborations are essential for launching projects that are both economically viable and beneficial to society at large,” Greenidge highlighted while delivering the third Distinguished Owen S. Arthur Memorial Lecture on Thursday night.
While acknowledging that the significant liquidity surplus in the Caribbean’s financial markets presents both a challenge and an opportunity, the senior economist pointed out that the central banks have a pivotal role in devising and executing strategies to direct that money into investments that promote sustainable growth.
“Green bonds and climate finance, coupled with foreign direct investments (FDIs), are avenues through which dedicated capital for environmentally and socially responsible projects can be accessed. The key is creating an ecosystem that attracts investment while ensuring adherence to rigorous environmental and social standards,” contended the former senior economic consultant with the International Monetary Fund (IMF).
“Technology and innovation funds are another source, ensuring that the Caribbean is not only attuned to global tech advancements but also adept at tailoring these innovations to meet regional needs and aspirations.”
Dr Greenidge observed that with the recent emergence of banks such as the African Export-Import Bank (Afreximbank) and the Export-Import Bank of China (China Exim Bank), international funding and collaboration have been significantly enriched.
He noted that these institutions are not just repositories of vast financial resources but are also epicentres of technical expertise and conduits for bilateral and multilateral trade and investment synergies.
“The Afreximbank, with its roots deeply embedded in fostering trade and economic development, has extended its focus towards the Caribbean nations, with the establishment of an office in Barbados and the provision of $1.5 billion to support sustainable development in various sectors across Caribbean nations. Similarly, the China Exim Bank, with its expansive global footprint, continues to be instrumental in driving substantial infrastructure and development projects in the region,” the central bank head reminded.
Greenidge said that together, these institutions amplify the Caribbean’s access to a diverse array of financial instruments, trade opportunities, and international markets. (EJ)
