– 70% decline over six-year period
The decline in loan approvals by the Inter-Development Bank (IDB) remains a concern for the region. This “worrying trend”, which was first observed in 2010, continues today, said Guyana’s Finance Minister, Winston Jordan.
The Minister was at the time delivering an address on behalf of the Caribbean Constituency, at the sixth pre-Annual General Meeting at the IDB’s Headquarters in Washington, D.C United States of America (USA) on Tuesday last.
Present at the meeting were Governors from the Caribbean, President and Members of the Senior Management Team of the IDB; Executive Director and Members of the Caribbean Constituency Office of the IDB; and Representatives from Caribbean Member States of the Bank.
“We remain concerned with the Bank’s loan approvals for our constituency members, in 2016. Excluding Suriname, there were nine loans approved for a total of US$264 million, less than two-thirds of the amount approved in 2015,” Jordan told the attendees.
He added that loan approvals to Jamaica declined by 57 percent while no loan was approved for Trinidad and Tobago.
This “worrying trend”, the Guyanese Minister said, was first observed in 2010 and continues today.
He stated that $900 million was approved in 2010 and by last year this had fallen “drastically” by 70% to $264 million.
“And while the total approvals for the period 2010 to 2016 was $3.5 billion, 77% of this amount went to two countries and a mere 7.5 percent went to the poorest member of the constituency,” Jordan told the attendees.
Jordan said that the perspective expressed by many donor countries is not ‘wholly incorrect’ when they opine that the Bank has suffered some strategic drift, and that its role has evolved into focusing on increasing prosperity in Latin America and the Caribbean rather than decreasing poverty.
“But what is regrettable is that the perspective that the Bank is not very focused on eliminating poverty, is, also, not easily defensible.”
The Minister added that a quick review of the net flows between the Bank and the Caribbean constituency members does ‘little to debunk’ this view.
“Overall, again excluding Suriname, the region received total disbursements of $367 million, and paid principal, interest and fees totalling $263.6 million – implying a positive net inflow to the region of $101.7 million. However, a disaggregation of the numbers is quite revealing: The only Group D member – Guyana, an FSO (Fund for Special Operations)-eligible country – paid the Bank 131 percent more than it received in disbursements,” Jordan noted.
The Minister said that comparing the interest income received by the Bank with disbursements to Guyana, shows that the Bank made a ‘handsome profit’ of almost US$1M.
This, he opined is good business if the IDB is commercial bank, but ‘very disappointing’ for an institution focused on development.
Jordan said that it is easy to get into a blame game for this result of last year’s operations and posited that this is the reality of last years’ interaction with the Bank.
“And even as we try to avert any recriminations, just a glance at the 2017 OPR (Operational Programme Report) points to the great likelihood of a continuation of this trend, given that Guyana has zero funds programmed. Changing this situation and breaking the trend requires using the creativity, innovation and wisdom that we know the Bank possesses.
But it is important that the Bank identify specific areas for attention. If we continue along the same path, we may be better served to cease borrowing and ask to be paid dividends on our shareholdings from the Bank’s profits – certainly Guyana would be better off.”
Last year, Guyana was preparing to host the Pre- AGM meeting but this was aborted and reverted to Washington because the Bank was short of funds.
“This is the second year that this Meeting is being held in Washington without any clear indication as to when the Meetings will return in the Caribbean. We would like to see these meetings return to the Region, and for hosting to revolve among our members as had been the understanding when these meetings were first conceived.” Jordan said.
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