Member states calling for expanded capacity of Caribbean Development Bank (CDB)
published: Wednesday May 17, 2006
Monique Hepburn, News Editor
Dr. Omar Davies, Finance and Planning Minister. - NORMAN GRINDLEY/DEPUTY CHIEF PHOTOGRAPHER
WESTERN BUREAU:
MEMBER STATES of the Caribbean Development Bank (CDB) are lobbying for an increase in the absorptive capacity of the multilateral institution to aid in the generation of new loan facilities geared toward their development.
Representatives of member countries of the CDB are now meeting in Montego Bay for the 36th annual meeting of the board of governors. Following a closed-door discussion on the expansion of membership of the CDB yesterday, Finance Minister Dr. Omar Davies told Wednesday Business that the states were concerned about the institution's level of disbursement when matched against their respective challenges and that the former was not satisfactory.
"The levels of disbursement given the problems that countries in the region face are not satisfactory," said Dr. Davies. "We will be dealing with the Special Development Fund (SDF) and most multilateral banks have these facilities for the lower-income countries."
EXPANDING CAPACITY
Dr. Davies said that the CDB's funding of the segment of the Northern Coastal Highway between Montego Bay and Falmouth accounts for more than 37 per cent of the institution's commitments, which in 2005, stood at US$146.2. He stated that while Jamaica was happy for the loan, the situation highlights the point that the bank must expand its capacity.
"It is obvious that there is need for us to be able to generate more," he said.
Jamaica and Trinidad and Tobago are the two largest shareholders in the CDB, with 19,342 shares each, representing 17.91 per cent of total share capital. Jamaica has received the cumulative amount of US$445.7 million to both the public and private sector.
Among the sectors which have benefited are agriculture, industry, tourism, infrastructure and social services.
Other matters discussed during yesterday's session included the possible modification of the CDB charter to make provision for institutional membership outside of the established member state membership arrangement.
"The matter of expanding membership of the CDB is one that relates to the change in the structure to allow for institutional membership. The European Investment Bank (EIB) would be one possibility but that will not be finalised because there will have to be changes to the charter," Dr. Davies explained. "We are, however, working around a general concept rather than one institution."
STRENGTHENING THE MEMBERSHIP BASE
The EIB is the world's single largest multilateral development bank and donor membership would significantly strengthen the CDB's membership base.
Revealing that the issue of whether or not regional borrowing countries would be allowed to retain their majority vote, the Finance Minister said the board had reached a consensus that that would remain.
According to the SDF Annual Report and Financial Projections, in 2005 the fund generated a net income of US$.03 million. It is an improved performance over the previous year, which recorded a net loss of US$.5 million. The fund's performance in 2005 was attributed to a four per cent increase in loan income over the year before, as well as increased income earnings from the investment portfolio.
Cash and investments grew by US$13.4 million and generated increased revenue of US$1.6 million in 2005. Loan commitments for 2006, 2007 and 2008 are projected at US$40.5 million, US$42.5 and US$47.5 million, respectively.
