The Caribbean Development Bank (CDB) is a regional financial institution that was founded by way of an agreement in Kingston, Jamaica, signed on October 18, 1969. Just over three months after the signing, it came into force on January 26, 1970. Since then the Bank has been serving several countries including states and territories of the Caribbean region or non-regional states, which are members of the United Nations. Dr Warren Smith is the current President of CDB. Love News met up with him earlier this month as he was in Belize for the CARICOM event in Placencia. Dr Smith spoke to us on the role CDB has played in Belize particularly via the Development Finance Corporation.
DR WARREN SMITH
“We like to think that we played a very important role in the reconstruction of the DFC. We know that the DFC had a little bit of a rocky history and we felt that it was important to have a financial intermediary in Belize that was focused on development issues. Belize is a very important client of the Caribbean Development Bank, you are also a shareholder of the Caribbean Development bank. So we provided technical assistance to the government of Belize to help them to do a study which would inform the restructuring of the DFC. In my opinion it was a good story, the bank was restructured, it is now in operation, my information is that it’s doing pretty well, it’s meeting the needs of the smaller medium enterprises here in Belize which is the dynamic sector for growth and development here and from our perspective it represents a good conduit for us so we can reach smaller medium enterprises here in Belize working through the mechanism of the DFC which has a very good appreciation of the local risks and also a very good appreciation of where you can get the best bang for your buck from a development perspective right here in this country.”
As it relates to the monies being loan to Belize from the Caribbean Development Bank, Dr Smith explained that there are two funds used to allocate loans for Belize including one that focuses on poverty alleviation.
DR WARREN SMITH
“In a country like Belize what we do is we provide both financing from what we call our ordinary capital window, that is our commercial window and we also provide financing from our special development fund which is the window that is more focused on poverty related projects. So we tend to blend those two resources to give Belize a rate of interest but if you have a financier coming in with an even lower rate of interest and or grant resources I think you would appreciate that that is to the benefit of the country.”
One example of a project that was funded by the CDB in Belize was the Kendall Bridge in southern Belize. Dr Smith was in-country for the inauguration which he spoke of during our interview.
DR WARREN SMITH
“We finished a project not to long ago in fact I had the privilege of coming to Belize and opening the project here, I think it’s called the Kendal Bridge. That was about half an hour away from here and it was an absolutely rewarding occasion. There are a lot of kids from the local community who came out for the occasion, they actually sang the national anthem in their native language which blew me away, it was really a heartwarming experience and we said some nice things about the project, some of the benefits that it would bring to the local community and it was really great to hear about how the disaster that led to the need for the reconstruction of the bridge affected people’s lives and how the new development was going to make their lives so much better. That’s one of the beauties of working in the development business. You can see the direct impact of our work on the livelihoods and on the quality of life of ordinary people.”
As for the process of acquiring monies from the CDB, the Bank’s President spoke on how often they look at the needs of the country.
DR WARREN SMITH
“How we work is every three years for example we come to Belize and we sit down with your government and we try to get an understanding of what the priorities of the government are at a particular point in time. So if you say to us “Oh our priorities are in building infrastructure, renewable energy, energy efficiency” then we will say okay the quantum of resources that we have, the package of funding that we have for you is “x” millions of dollars we say to you, look, we want as much as possible to align what we finance for you with the expertise that we have in the bank. So for example if you want to do something in health we’ll say to you that we prefer not to finance that because we don’t have the expertise in CDB at this particular point in time to be able to do a health project. You give us an infrastructure project, you give us a project in renewable energy that is the kind of thing that we’d love to do. We helped to finance a project called Belcogen some years ago that was a biomass project. For us that was a good project because it was in the agriculture sector but it also had the side benefit of being able to produce electricity for the factory itself and also for the grid. So it was a good example of how we can leverage your domestic resources to build your country in several different aspects.”
Dr Smith went on to assure the public that one of the key aspects of the CDB is to ensure that sound returns are gained from the loans. He spoke in-depth on this issue.
DR WARREN SMITH
“We like to think that we bring greater value for money to a country than say a commercial bank, no disrespect to the commercial banks they have their role to play but because we are about development we are very anxious not to provide you with financing for projects that don’t optimize the return on your investment because we don’t want to be in the business of impoverishing the country, we want to be in the business of developing your country. So if we give you money for projects that is not a well planned and executed project chances are we are going to be contributing more to your impoverishment than to your development. So we spent a lot of time studying and examining a project. When the CDB team comes in to do a road project you’re probably going to find on that team a civil engineer, an environmental specialist, a social analyst, a gender specialist and sometimes even a lawyer. Now the purpose of that multifaceted team is to ensure that all these bases, the social and the economic areas are covered such that you get good return on the investment. Sometimes we get criticized for taking too long in the appraisal and disbursement of the a project. We don’t think that we take too long because we can turn around a project on fairly complex in two to three months, we can do that but we want to ensure that we have done the job effectively. These days we are especially concerned about climate impacts so when we are designing a road we want to make sure that that road is designed in such a way that it takes into account the heavier rainfall, all of the things that are now associated with climate change so that you are going to find that we are going to be putting greater focus on the nature of the drainage that you have in place because if the water doesn’t drain off it’s going to affect the life of the road. So all of that we bring to bear when we finance a project in your country and we think that that is the best mechanism for ensuring that you get value for money.”
One of the upcoming projects in Belize that will be co-funded by the Caribbean Development Bank is the Haulover Bridge and Philip Goldson Highway projects.