Ilan Goldfajn | Catalysing growth through ‘One Caribbean’

The Caribbean stands at a potential inflection point. The region faces significant challenges around extreme weather events, citizen security, low productivity and growth, as well as food security. Yet, amidst these challenges, there is vast potential for growth by turning these challenges into opportunities, such as leveraging regional collaboration through our ‘One Caribbean’ initiative to increase jobs.

Working together to seize on this potential was a key issue on the agenda of finance ministers when they met in Nassau last week for the annual meeting of the Governors of the Inter-American Development Bank (IDB) for the Caribbean. In many ways, The Bahamas was the perfect venue to have this debate, as the country has shown remarkable resilience and progress in dealing with these challenges, and has been steadfast in implementing reforms that lay the groundwork for long-term growth and sustainability.

CHALLENGES WE FACE

Our region is highly vulnerable to extreme weather events. Every year, between June and November, the region faces potential catastrophic damage from the hurricane season. Hurricanes Beryl and Elsa wreaked havoc on Jamaica and Barbados, while Hurricane Dorian alone cost The Bahamas $3.4 billion or 12 per cent of GDP.

Low growth rates resulting from limited investment are leading to bottlenecks to boosting productivity and limiting opportunities for the private sector. The Caribbean’s dependence on imported food leaves the region subject to price shocks that raise the cost of living and undermine gains in nutrition.

Violent crime is a persistent problem that ranks top among citizen concerns. Homicide rates in the Caribbean are three times that of the global average, according to United Nations figures, while robberies and extortion by organised crime groups hinder our region’s economic development.

COLLECTIVE VISION

These are challenges that transcend borders and affect all sectors of the economy. Their magnitude is such that no country can solve them alone. Regional collaboration is key to integrating markets, reducing costs, protecting shared resources and ensuring that growth benefits everyone. This is where the IDB, as the region’s main development partner, comes in by offering region-wide initiatives and solutions.

One Caribbean embodies that spirit. Launched in 2024, together with governments in the Caribbean, the initiative seeks to enhance climate resilience, increase growth and promote social development across the region, in line with the IDB Group’s core objectives and the United Nations’ Sustainable Development Goals (SDGs). This initiative focuses on four pillars:

1. Climate adaptation and resilience and disaster risk management – Building resilient infrastructure and increasing the use of renewable energy to reduce fossil fuel imports.

2. Citizen security - Strengthening citizen security improves lives while removing a key barrier to economic development. Our ONE Safe Caribbean initiative, part of our Alliance for Security, Justice and Development, is set to address this challenge collectively.

3. Private-sector development – Greater integration can yield scale and harness the varied capabilities across the region helping to spur private sector engagement. IDB Invest, our private sector wing, and IDB Lab, our innovation laboratory, are working with the Caribbean private sector to expand these opportunities.

4. Food security - Boosting domestic agricultural production and improving trade facilities can reduce costs and provide more stable supplies while providing nutritious food for all.

One Caribbean leverages financing from the IDB, private sector, and other partners to maximise impact. Our role as a strategic partner is anchored in deep experience driving successful regional projects.

ROAD AHEAD

But the IDB’s support does not stop there. Through our new approach that we call IDBImpact+, we are transforming how we work to deliver greater scale and impact across the region. This ambitious agenda includes several reforms and initiatives, designed to increase our effectiveness, align resources with measurable outcomes, and strengthen our capacity to tackle the most pressing challenges in the Caribbean and throughout Latin America.

The Impact+ includes enhancing our scale by increasing our overall annual lending capacity to LAC by $5 billion (a 40 per cent increase) to reach $19 billion by 2030, with a focus on maximising impact through clear, evidence-based metrics for reducing poverty, tackling climate change, and boosting sustainable growth. Additionally, reforms to IDB Invest, our private sector arm, and IDB Lab, our venture capital arm, will drive private capital, entrepreneurship, and innovation.

Our strategic vision positions the IDB as a knowledge partner and a bridge to global opportunities for the region. From school reforms in the Dominican Republic to initiatives boosting female labour participation in Belize, we are transforming challenges into opportunities for the Caribbean and Latin America. By aligning regional initiatives like One Caribbean with national priorities, we are delivering tangible results through actionable insights, technical assistance, and targeted investments.

SHARED VISION

The Caribbean and the IDB share a vision for a brighter future. Together, we can transform obstacles into opportunities, fostering a region that thrives economically, protects its environment, and creates opportunities for all its people.

Increased regional collaboration is not just an option – it’s a necessity. By investing in our shared progress, we can ensure that our region fulfils its immense potential.

Ilan Goldfajn is the president of the IDB. Send feedback to columns@gleanerjm.com