CDB Lending Activities

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1 CDB Lending Activities Responding to the Impact of the Global Crisis on Caribbean Economies Ian Durant Country Economist Economics Department July 2011

2 Structure of Presentation Main Aspects of CDB Borrowing Member Country (BMC) Economic Performance Main Structural Economic Issues CDB s Strategic Response Loans approved in 2010

3 Main Aspects of CDB BMC Recent Economic Performance - Overview CDB BMC were adversely affected by the Great Recession However, 2010 marked the beginning of a turnaround Even though there was the lingering fiscal effects of the Great Recession Exacerbated by the impact of natural disasters

4 Main Aspects of CDB BMC Recent Economic Performance - Output ANG ANT BAH BAR BZE BVI CAY DOM GRE GUY HAI JAM MON SKN SLU SVG TT TCI 2009P (13.6 (9.6) (4.3) (4.7) - (14.8 (7.0) (1.1) (7.6) (2.9) (0.8) (4.4) (1.3) (0.6) (3.5) (2.0) 2010E (3.8) (5.9) (4.2) (0.3) (2.0) 3.6 (8.5) (1.0) (2.9) (4.2) 4.4 (1.2)

5 Main Aspects of CDB BMC Recent Economic Performance - Output Output remains sluggish Global recovery from 2008/09 recession But the recovery has been led by emerging and developing economies Advanced economies are the main source of exports, transfers and foreign investment flows in CDB s BMCs Therefore, recovery has been severely lagged in CDB s BMCs

6 Main Aspects of CDB BMC Recent Economic Performance - Output Tourism dominates output in the region Households in source markets repairing their balance sheets Savings in source markets has increased Affecting the performance and prospects for tourism and tourism-related construction

7 Main Aspects of CDB BMC Recent Economic Performance - Fiscal Performance Fiscal performance has deteriorated Resulting from: poor revenue performance; Increased social-safety-net expenditure Debt levels continued to climb as a result

8 Main Aspects of CDB BMC Recent Economic Performance - Debt-to-GDP Ratios and International Rank Country Debt/GDP Rank SKN JAM GRE BAR ANT DOM SVG BZE SLU GUY BAH TT TCI

9 Main Aspects of CDB BMC Recent Economic Performance - Fiscal Performance Five countries have embarked on fiscal consolidation programs with assistance from MDBs: Antigua and Barbuda embarked in 2010 on a 3- year program with assistance from IMF and CDB Barbados implemented in 2010 medium-term fiscal strategy with assistance from CDB Grenada focused on fiscal consolidation with assistance from IMF and CDB Jamaica deepened its fiscal reform program with assistance from IMF, WB, IDB and CDB St. Kitts and Nevis about to enter into a debt restructuring program with assistance from IMF

10 Main Structural Economic Issues High levels of poverty, ranging from 65% in Haiti to 14% in Barbados Persistently low growth Export concentration High levels of debt Vulnerability to natural hazards

11 CDB s Strategic Response CDB has embarked on a new strategy for the period Supported by a 150% increase in general capital Strategy focuses on five strategic objectives, including: Promoting broad-based growth and inclusive social development Environmental sustainability and disaster risk management Promoting good governance

12 CDB s Strategic Response: Broad- Based Economic Growth Education and training Agriculture and rural development Economic and social infrastructure Private sector development Social protection

13 Loans Approved in 2010 Country Loan Amount Anguilla Policy-Based Loan 55,000,000 Bahamas Family Islands Transport Sector Enhancement Project 10,109,000 Barbados Policy-Based Loan 25,000,000 Barbados Low-Income Housing Programme 36,000,000 Barbados TA Water Supply Network Rehab and Upgrade Study 1,062,000 Belize The Belize Social Investment Fund II 15,000,000 Belize Fourth Road Project Santa Elena San Ignacio Bypass 24,719,000 Dominica Road Improvement and Maintenance Valley Roads 2 nd Add. 3,890,000 Grenada Market Access and Rural Enterprise Development 3,000,000 Guyana Community Roads Improvement Programme 16,292,000 Jamaica Student Loan (Students Loan Bureau) 20,000,000 St. Kitts and Nevis Nevis Water Supply Enhancement Project 8,425,000 St. Lucia Policy-Based Loan (Additional Loan) 15,000,000 St. Vincent and the Grenadines Financial Sector Stabilization Loan 37,000,000

14 Thank you for your attention. Questions?

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