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Opening Statement by the President of Guyana, His Excellency Mr. Bharrat Jagdeo to the 35th Annual Meeting of the Board of Governors of the Caribbean Development Bank at the Le Meridien, Pegasus


 

It is with great pleasure that, on behalf of the Government and people of Guyana, I extend a very warm welcome to all of you.

Many years have passed since the Governors last met in Guyana. We are meeting now under better circumstances. Guyana today has returned to the democratic fold of nations; we have recorded substantial economic and social progress; our economy is considered one of the most open; and we are now in a better position to provide an improved standard of living for all our people.

While this meeting is demanding, I am sure that you would take time off to get to know more of the rich and diverse culture as well as the extensive fauna and flora of this beautiful country and its hospitable citizens.

Importantly, this meeting is being held at a time when the region is confronting some of its more serious challenges. Governments and various institutions are expected, more than ever, to be fully responsive notwithstanding the constraints of resources that have beset small and emerging economies.     

The Caribbean countries now face new and unique challenges to development, while still subject to the enduring problems of small size, and vulnerability to natural disasters and economic instability. The old economic structures have taken us to a certain point along the way to development but there are serious doubts about their sustainability and dynamic potential. The path ahead must be one of accelerated growth through increased competitiveness. The most potent means for advancing in this direction is through the CARICOM Single Market and Economy, to which I will return.

The role and support of the CDB has been sterling. Guyana today is a success story because of the hard work of its people and the support received from abroad including from the CDB. Our macroeconomic framework is one of the more stable in the region. For example, during the past decade we have been able to reduce the foreign debt by half; our currency is relatively stable; inflation has been kept within single digit range; and our foreign reserve targets have been surpassed. This has been achieved when expenditure in housing, health, education, physical infrastructure, poverty reduction and job creation activities have been steadily increasing. 

Mr. President, Governors:

I would like to begin with the most pressing business engaging the attention of this meeting the replenishment of the Special Development Fund (SDF). As you know, this fund is the principal source of concessionary finance available in the CDB, and has been indispensable, in particular to the implementation of projects focused on reduction of poverty and achieving the Millennium Development Goals (MDGs). My own country Guyana has been the principal beneficiary of these funds, including those secured through the Basic Needs Trust Fund, and for support for physical and social infrastructure. I would like to take this opportunity to thank all the contributors for their generosity.

During this meeting, we have had the second session of negotiations for SDF Six. The matter is now urgent as the fund’s resources are nearing exhaustion and the scope for blending them with the OCR becomes increasingly narrow.  In the case of Guyana, given its still high debt burden, it will only be possible to finance accelerated poverty-reducing growth by access to funds on highly concessionary terms. I urge completion of these negotiations no later than July, and encourage all potential contributors to indicate their support for the replenishment in the near future, hopefully at increased levels. For not only are we a long way from achieving our poverty reduction targets,  and  the Millennium Development Goals, but the imminent accession of Haiti and Suriname will vastly expand the number of people living in poverty. Within the Bank’s membership, I can assure you that Guyana, although a HIPIC country, will be supportive of this replenishment.

I would like now to focus on some of the newer challenges-some of which I alluded to in the first session of negotiations for the replenishment of the SDF in November 2004 in Guyana that at this point in time should be more prominent in our development policy planning.

Crime and violence have now assumed major importance as obstacles to development with far-reaching consequences for our society. They are creating an atmosphere that inhibits inflows of investment, discourages the growth of tourism, and weakens the middle class through migration, thereby encouraging outflows of capital and skills. They are now closely linked to the trade in narcotics. The success in drug control in Columbia and elsewhere has driven the trade across the long unprotected borders of neighboring countries, like Guyana and Suriname and into the islands via the equally inadequately secured Caribbean Sea.

Often, the corrosive effects of the network of crime and violence and narcotics nullify the gains made in public policy management

A second major challenge we have to grapple with is the development of human resources and their retention in the region. The improvement of learning skills to better take advantage of the needs of increasing knowledge –based activity is perhaps the single greatest investment in development that our societies ought to be undertaking. This cannot be done without modern education and an open telecommunications sector to make it possible to narrow the digital divide and apply information-technology to the development of new services. The export of new knowledge-based products should now replace the export of our skilled human resources. We can sell knowledge without the migration of our people. Nor is it a prohibitively expensive proposition. In Guyana, for example, to equip 100,000 households - half the number in the country - with computers would require an investment of US$40 million. But tapping this capital from many institutions for this purpose is difficult, and a fact which the CDB must take careful note of. 

A third challenge is the diversification of our economies. For decades, we have been advised to pursue diversification as a response to the erosion of trade preferences. How are we going to do this? Many of us do not have the institutional and financial capacity to do so. We now have to attend to the behind-the-border constraints. In particular, we have to identify the areas that have sustainable opportunities and in which we can be globally competitive. And importantly, we have to undertake investment in the institutional infrastructure necessary for diversification.

A fourth challenge – and one I alluded to earlier when I referred to the need for accelerated growth through improved competitiveness - is to advance and put in place the CSME. The Single Market aspect is nearing completion. We need now to be creating the foundations for taking the Caribbean onto a new economic trajectory through the creation of the Single Economy. The centre-piece of this effort should be the creation of Regional Sectoral Development Policies and Plans. The principal areas we have to tackle are regional agricultural, fisheries and forestry development, air and maritime transport, energy, human resource development, science and technology, and disaster risk management plans.

Guyana, as you know, has a special interest in regional agricultural and fisheries development. We would like to see common agricultural and fisheries policies and plans developed. These must go beyond being a guide to our external trade negotiations and provide a framework for regional production and trade. They will also make for an important contribution to development of the rural areas where poverty remains much above the national average and which are by-passed by such developments as tourism. The FAO is ready to provide some technical assistance in this field, and given the multi functionality of Agriculture, we would like the CDB in cooperation with the CARICOM Secretariat to take the lead in this development.

One report from a multilateral financial institution said that it is time to choose. However, although it may be the time to choose we have to know what it is we are choosing. At the economic cross roads to which we have come, the CDB must look to new strategic directions and priorities - and especially at a time when it will be embarking on the consideration of a new Strategic Plan for the next five years. This should provide an important opportunity to review the CDB’s role in the region in supporting development and poverty reduction. The Bank should be responsive to these challenges without necessarily overloading its mandate.

             Finally, I think we have to recognize frankly that the CDB - with an annual lending program of just over US$100 million a year in a region with annual total investment of some US$6 billion - is not by that means alone going to make a substantial contribution to transforming the economy of this region. In view of this, and the scale of challenges the region faces, it is more important than ever that the CDB be effective and efficient in its development role.  

I believe that it must avail itself of innovative resource mobilization mechanisms and lending instruments. It must complement more focused lending operations with greater attention to its economic policy and advisory services. It must also enhance synergies with other multilateral development agencies as well as leverage its resources with those of private capital market institutions.

2005 marks a third of the way to the target year for achieving the Millennium Development Goals. It is therefore a critical year when our decisions and actions will be extremely crucial to meet the MDGs. There is strong agreement that this will require enhanced domestic efforts and external support. While the regional economies must do more to implement the development agenda, aid and other forms of development financing play an important role. Therefore, it is imperative that there is successful replenishment of the SDF to support the region in confronting present and future challenges.    

I wish to congratulate the President, the Governors and contributors to the CDB for their support as this institution continues to play its role in the development of our region.  

 

May 18, 2005