SAN Jose, Costa Rica (CMC) — President of the Barbados-based Caribbean Development Bank (CDB), Dr Gene Leon has proposed a new initiative aimed at making more concessional funding available to regional countries.
He said the CDB’s Recovery Duration Adjuster will help Caribbean countries align with the current framework to access concessional finance.
Addressing the fifth meeting of the Forum of the Countries of Latin America and the Caribbean on Sustainable Development, Leon said “finance eligibility criteria and systems are often not suited to the unique challenges and constraints of small states”.
“Given our vulnerabilities, it remains a fact that even when small states have achieved high levels of gross national income per capita and graduated from access to concessional finance, they still face significant challenges after the occurrence of exogenous shocks, in particular natural hazard events.”
He said while modifications to the eligibility criteria have been tried, the existing vulnerability framework has not garnered consensus and still has many deficiencies.
Leon said existing vulnerability indices are backwards in calibration and therefore unable to incorporate the evolution of vulnerability and forward-looking dynamics of the economies.
To address the structural and vulnerability factors that constrain growth and development, as well as distinguish the magnitude and impacts of shocks, Leon has proposed the use of the Recovery Duration Adjuster as a forward-looking concept that takes into account internal resilience capacity, which should underpin access to concessional finance.
The CDB president, illustrating the diverse recovery duration of a developing country like Dominica compared to an advanced economy like the State of Florida in the United States after a Category Five hurricane hits, said that the magnitude of impact from such a shock differs significantly.
He said Dominica exhibits more deficient infrastructure, limited access to finance, lower levels of capital efficiencies, and limited institutional capacity and as a result, the duration of recovery for Dominica will be significantly longer than for Florida, which can access resources from the Federal government in the United States.
He said that the gross national income being used as an indicator for access to concessional finance aftershocks is inadequate.
“We propose instead an internal resilience capacity-adjusted gross national income measure — the Recovery Duration Adjuster — that adjusts the gross national income on the basis of duration to recovery, which we believe is a more appropriate and equitable measure for use in classifying countries for access to concessional finance,” said Leon.
Representatives of the 33 countries of Latin America and the Caribbean championed the Forum on Sustainable Development as an indispensable space for regional integration and cooperation amid global uncertainty.
The forum, which ends on Wednesday, is being attended by more than 1,200 delegates including government delegates and representatives of international and United Nations System organisations, the private sector, academia and civil society.
The delegates will review the progress and challenges related to the implementation of the 2030 Agenda in Latin America and the Caribbean, the developing region most affected by COVID-19 from a health, economic and social point of view.
The Deputy Secretary-General of the United Nations, Amina Mohammed, told the event that in many ways, Latin America and the Caribbean has given birth to the Sustainable Development Goals (SDGs).
“As the world faces unprecedented challenges, we need the region’s leadership to ensure that we ‘rescue’ the SDGs and build a future of peace, dignity and prosperity. Together, we can do it,” she said, adding that meeting must serve to chart an ambitious path forward.
“This is a region that can and must lead the way,” she urged.
In her remarks, ECLAC’s Executive Secretary Alicia Bárcena said that we are facing a true change of era where structural problems converge with serious circumstantial difficulties.
She said that the global asymmetries between developed and developing countries have deepened, affecting the middle-income nations that include the majority of countries in our region. Furthermore, gaps have widened on access to vaccines, to financial resources, and in the capacity to implement initiatives for economic recovery.
Bárcena indicated that access to vaccines exposed the fiercest nationalist tendencies. She specified that Latin America and the Caribbean were affected by trade protectionism on medicines, equipment and vaccines that prompted the consideration of a plan for self-sufficiency in health matters with a regional perspective, which was approved unanimously by the heads of state and government of the 32 countries of the Community of Latin American and Caribbean States (CELAC) on September 18, 2021.
She noted that while the average total vaccination rate in the region is high, reaching 62.6 per cent of the population, the Caribbean, with the exception of Cuba and the Dominican Republic, has only been able to ensure full vaccination for 14.7per cent of its population.
Bárcena said that this singular time should redouble Latin America and the Caribbean’s shared vocation for closeness, integration and fraternity and be the foundation for a change in the development pattern.
“Our region faces major challenges today, but it also has multiple opportunities to achieve long-awaited development with a vision centred on equality, social justice, sustainability, democracy and peace. I am convinced that it is possible for the region to raise its voice in unison amid the historic challenges that this crucial time has prompted us to address.”
During the first day of the conference, Bárcena presented the document titled “A decade of action for a change of era,” which reviews progress and challenges in relation to the 2030 Agenda for Sustainable Development in Latin America and the Caribbean.
The report analyses the growing global asymmetries between developed and developing countries, along with the economic, social and political effects of COVID-19 in Latin America and the Caribbean. It affirms that the recovery has furthered a development model that had already shown its structural limitations, which imposes growing costs and moves away from the attainment of the SDGs.
According to the document, 68 per cent of the sustainable development targets continue along an insufficient path towards 2030. It warns that just one-third of the 111 targets of the SDGs are on the proper pace and trajectory in Latin America and the Caribbean.
“These results reinforce the need for a decade of action to transform the development model based on effective multilateralism,” the senior official emphasised.
