World Bank and Inter-American Development Bank Collaborate to Provide Major Assistance for Resilience Building in Barbados and Caribbean
September 2, 2023
The World Bank and the Inter-American Development Bank have signed a four-year agreement to support Barbados and other countries in building resilience in areas such as climate change and digitization. Trillions of dollars will be made available to achieve development goals.
By Marlon Madden
Barbados and other countries in the Caribbean and Latin America are in line to get major assistance from the World Bank and the Inter-American Development Bank (IDB) in securing funding and implementing programmes to build resilience in several areas.
On Thursday, the presidents of both financial institutions signed a four-year agreement, cementing a pledge made two months ago during a joint trip to Peru and Jamaica, to collaborate on three priority areas on which to scale up financing for development in the Caribbean and Latin America – protection of the Amazon and its people, climate resilience, and digitisation to improve education.
During a fireside chat on Thursday under the topic Strengthening Collaboration to Maximise Development Impact, President of the World Bank Ajay Banga and President of the IDB Ilan Goldfajn said the time had come for the Caribbean and Latin America to have access to trillions of dollars instead of millions, in order to achieve development goals.
In addition to providing better debt repayment options, the two institutions will help raise funds to assist Latin American and Caribbean countries in building resilience in the areas identified.
Recalling that he joined Prime Minister Mia Mottley in Paris recently in discussing matters relating to the climate crisis, Banga said “it is important to me and to her”.
“It’s not only debt repayments that we have announced, it is also having financing available – whether through insurance or deferred drawdown options, things that the bank has been doing in different countries. The question is, can we scale them, can we learn from each other and can we do more together? That is the idea,” he said.
Other areas they discussed but are not currently pursuing are digitisation for health care and governments, as well as financial inclusion, among others.
They explained that through the memorandum of understanding, both institutions would collaborate in the areas of planning and implementation of programmes and activities, research, training and dissemination of information.
Banga said if the institutions were able to help countries shift some risks associated with various projects, “then we remove an unnecessary friction point in attracting private capital and that is what we are trying to do”.
“We need all shoulders at the wheel. We need concessional capital from philanthropists and richer countries. We need the private sector to come in for the right reasons, not that they shouldn’t make money but come in for the right reasons and with the right risk profile. We need multilateral banks to work together [and] we need governance in countries to work well,” said Banga.
Goldfajn said constant high standards were critical to the collaboration and for development to take place in a meaningful way that benefits residents and the economies.
“We cannot go there to the same people with different standards and different ways. We keep telling them to do it that way, and somebody else comes 10 minutes later and says, ‘Let’s do it in a different way’. We need to have standards and reduce the burden on our clients,” he said as he singled out the area of procurement as “a very good way to start”.
Goldfajn also pointed to the need for better monitoring and measurement of success.
“We want to think about how to help countries to have the projects they need. We want to be able to let the countries have coordination. This is holistic and it is about the people. It is about the cities and the economies,” he said.
“In the Caribbean, it is about resilience . . . . We are having more natural disasters with larger costs. So thinking of resilience, thinking how we can help this region, is fundamental. One institution can think about the catastrophe bonds and one institution can think about how we can give some time for the countries to not pay their debt while this happens. I know the World Bank has announced some [debt] suspension. We can think about these things in a more general term,” added Goldfajn.
[email protected]
