Turning to CAF in crucial times

FINANCE Minister Colm Imbert’s impending assumption of the chairmanship of the Development Bank of Latin America and the Caribbean (CAF) in March might be a routine appointment given his office, but the development nonetheless comes at a crucial moment for the country and Caricom as a whole.

Economist Dr Terrence Farrell has stated the role will be “non-operational.”

However, it can’t be denied that this country has a direct stake in the activities of CAF as a Series A shareholder.

In June 2016, TT subscribed to US$36 million in callable capital in this regional development bank. In December 2018, TT further subscribed to US$190 million of paid-in capital to be paid in instalments.

Financial disclosures by the bank reveal CAF disbursements to TT were US$200 million in 2019, US$301 million in 2020, US$160 million in 2021, US$101 million in 2022 and US$136 million in 2023. The areas covered related to the fulfilment of the UN’s sustainable development goals. For example, in 2023 there was a US$35 million disbursal to support the Eximbank.

TT is the only full member of CAF within Caricom. Barbados and Jamaica hold Series C shares, while countries like Dominica, Bahamas, Grenada, Haiti, Antigua and Barbuda, Suriname, St Lucia and St Vincent and the Grenadines have been knocking on the bank’s door. CAF is poised to become the largest development bank in the region, with its portfolio of more than US$34 billion and approvals in the billions.

It’s important to keep an eye on and a foot within this institution particularly at a moment of global turbulence and amid the climate crisis.

CAF has already begun to position itself as a potential financial lever through which crucial green funding might flow: it had a presence at the COP28 conference and is billing itself as “the green bank of Latin America and the Caribbean.”

In addition to offices in this country, it has also opened new bases in Barbados and the Dominican Republic. It’s technical assistance facility for Caricom countries focuses on sectors such as clean energy, sustainable tourism, food security, management and protection of ecosystems and marine and coastal resources.

The possibility that Mr Imbert might not contest his seat in the upcoming general election and could make way for a new finance minister is not entirely unlikely. Even if Stuart Young returns the PNM to power, assuming the Prime Minister’s elevation of him goes forward, Mr Young may wish to have a clean slate within his cabinet.

But whoever occupies the seat, this country’s relationship with CAF must be maintained and deepened. The uncertainty around the leadership of the Ministry of Finance in the coming year only underlines how accessing more regional financing is truly a non-partisan issue.

At a time when foreign aid has been abruptly cut off by Donald Trump, Caricom must turn to other global institutions to fund the green transition. With January being the hottest on record, the need to do so is urgent.