President of the Caribbean Development Bank (CDB), Dr Hyginus “Gene” Leon has restated the need for a multi-facetted suite of financing instruments to drive sustainable development in the Caribbean as the region braces for exogenous shocks from the Russia-Ukraine conflict and other global events.

“In the Caribbean, we are still reeling from the ravages wrought by the COVID19 pandemic and we are just beginning to see some faint light in the tunnel ahead. Although growth in the region is expected to rebound to around 6.0 percent in 2022 … several threatening storm clouds have already formed that may significantly dampen this encouraging outlook,” Dr Leon said.

The Bank President cited the fallout from the ongoing Russia-Ukraine war, including rising energy prices, increasing inflation and worsening food insecurity, and the monetary tightening in advanced economies as developments that could negatively impact the Region’s sustainable development agenda.

While addressing the 52nd Regular Meeting of the Latin American Association of Development Financing Institutions’ (ALIDE) General Assembly today, Dr Leon disclosed that developing countries require between USD 3 trillion and USD5 trillion in annual investment to achieve the Sustainable Development Goals (SDGs) according to estimates from UN Global Compact Action Platform on Financial Innovation for the SDGs. The CDB President emphasised that marshalling the necessary investment would require, mobilisation of financial resources, strategic, collaborative partnerships and a strong focus on implementation.

In outlining the way forward, the seasoned economist contended that an allocation from the USD650 billion in Special Drawing Rights (SDR) approved by the International Monetary Fund (IMF) in August 2021 could be utilised for sustainable development financing. Dr Leon proposed that developed countries channel two percent of their excess SDR holdings to Multilateral Development Banks (MDBs) to support targeted initiatives that would address the integration of the twin issues of stabilisation and long-term sustainable development.

“MDBs are well placed to play this integrative role by forging an internal and temporal consistency among the three key policy frameworks in use: I refer to the debt sustainability framework of the IMF, the investment-growth nexus of the World Bank Group, and the Resilience Building Approach of the United Nations. This unifying perspective is key to providing viable, inclusive, and sustainable solutions for transformative development,” he explained.

The CDB President also called for deeper functional cooperation among development institutions in the Caribbean and Latin America and emphasised the need for partnerships with the regional and international private sectors and the regional public sector to achieve common transformative development goals.

“The overarching objective would be to support broad economic development and enhance resilience in our countries through investments in projects aligned with the SDGs and associated with carbon competitive energy, climate resilient infrastructure, digitalisation and economic diversification,” he said.  

Dr Leon delivered the keynote address on the second day of the 52nd Regular Meeting of the ALIDE General Assembly, which is currently underway in Willemstad, Curaçao.  The Meeting is scheduled to run until May 20, 2022.