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Caribbean Development Bank

(Redirected from Agreement establishing the Caribbean Development Bank)

The Caribbean Development Bank (CDB) is a development bank that helps Caribbean countries finance social and economic programs in its member countries through loans, grants, and technical assistance. The CDB was established by an agreement signed on October 18, 1969, in Kingston, Jamaica, which entered into force on January 26, 1970. The idea for the bank originated from the 1966 Canada/Commonwealth Caribbean Conference.

Caribbean Development Bank
FormationOctober 18, 1969; 55 years ago (1969-10-18)
PurposeRegional development
HeadquartersWildey, St. Michael, Barbados
Membership
28
(19 borrowing members)
(9 non-borrowing members)
President
Hyginus 'Gene' Leon
Websitewww.caribank.org

The permanent headquarters of the CDB is located in Wildey, St. Michael, Barbados, adjacent to the campus of the Samuel Jackman Prescod Polytechnic. On September 21, 2018, the Bank officially opened its Country Office in Haiti, the first outside its Headquarters in Barbados. The headquarters in Barbados serves all of the regional borrowing member countries, with staff recruited from its member states.

Membership

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The CDB's membership consists of 28 countries, including:

  • 19 regional borrowing members
  • 4 regional, non-borrowing members: Brazil, Colombia, Mexico and Venezuela
  • 5 non-regional, non-borrowing members: Canada, China, Germany, Italy, and the United Kingdom

Financial Overview

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As of December 31, 2021, the CDB's total assets stood at US$3.71 billion, which included US$2.21 billion of Ordinary Capital Resources and US$1.50 billion of Special Funds Resources.

The Bank holds a high credit rating from international agencies:

In 2021, the Bank approved US$269.5 million in loans and grants. At the end of 2020, the total value approved projects by the bank was US$122.6 million, including US$71.2 million in loans and US$51.4 million in grants.

History

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The Caribbean Development Bank was established by an agreement between sixteen members of the Commonwealth of Nations in the Caribbean region, along with Canada and the United Kingdom. Signed on October 18, 1969, in Kingston, Jamaica, the Agreement entered into force on January 26, 1970 when 15 of the 18 signing states ratified it. [1] The bank's initial capital was 50 million USD, equivalent to 100 million Eastern Caribbean dollar, with main contributions from Jamaica (11,200,000 USD and 19.52% of votes), and the United Kingdom and Canada contributing 10,000,000 USD each with 17.55% of votes in bank.[2]

The bank was created with the purpose of promoting sustainable economic growth and reducing poverty in the region, aligning with Arthur Lewis's vision of economic development. [3] During the first meeting of governors in Nassau, Lewis, who was an economist, was appointed the first president of the Caribbean Development Bank. His leadership was essential to establishing the bank's operations, emphasizing the importance of financial discipline and efficiency in development through agriculture and infrastructure projects. At this time, the bank aimed to reduce economic disparities among its member states by using soft loans to finance public works and agricultural development in the less developed states. [1]

Lewis set the CDB's independence up by retaliating against political interference in the financial decisions of the bank. He also ensured there would be efficient administration and a focus on the Caribbean states to become a key financial instrument for the countries that lacked access to international financial institutions. Lewis also played a key role in building strong relationships with other international organizations like the Inter-American Development Bank (IDB) and USAID that helped the bank gain legitimacy and credibility.[1]

List of presidents

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The Bank has had six presidents since its inception.[4]

Name Dates Nationality
William Arthur Lewis 1970–1973   Saint Lucia
William G. Demas 1974–1988   Trinidad and Tobago
Neville Nicholls 1988–2001   Barbados
Compton Bourne 2001–2011   Guyana
William Warren Smith 2011–2021   Jamaica
Hyginus 'Gene' Leon[5] 2021–2024   Saint Lucia

Organization

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Board of Governors

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The Board of Governors is the apex governing body of the CDB. It meets annually and has the authority to:

  • Admit new members
  • Amend the charter
  • Elect the Board of Directors and President
  • Change the bank's outstanding capital
  • Dissolve the bank.

Each country is represented by one governor and one alternate, with the British Overseas Territory members counted as one country.

Board of directors

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The Board of Directors is responsible for:

  • Determining the bank's programs and annual budget
  • Overseeing its operations
  • Appointing the Oversight and Assurance Committee

As with the Board of Governors, each country is represented by one director and one alternate. Directors serve renewable two-year terms.

President

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The President is the chief executive officer of the CDB, and also serves as the Chairman of the Board of Directors. Different offices for communication, risk management, and compliance are part of the Office of the President.

Presidential candidates are nominated by individual country members. A candidate must receive votes from two-thirds of the Board of Governors (representing 75% of the member countries) in order to be selected. The President serves for a five-year term, with the possibility of re-election.

Corporate leadership

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The two corporate leaders that report to the boards are the Vice-President (Corporate Services) and Bank Secretary, and the Vice-President (Operations).

Members

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Regional in green, other regional blue, non-regional members in red

As of 2023, there are nineteen borrowing members[6] and nine non-borrowing members.[7]

Regional

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Other regional

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Non-regional

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United Nations Development Business

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The United Nations launched Development Business in 1978 with the support of the Caribbean Development Bank, the World Bank, and many other major development banks from around the world. Today, Development Business is the primary publication for all major multilateral development banks, United Nations agencies, and several national governments, many of whom have made the publication of their tenders and contracts in Development Business a mandatory requirement.[9]

Recent Developments and Risk Management

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In 2012, the CDB experienced a credit downgrade due to weaknesses in the banks credit profile. The downgrade reflected concerns about the deteriorating financial conditions of its borrowing member countries, this posed risks the banks ability to finance loans effectively. There were also inefficiencies in CDB's risk management practices which prompted the bank to adopt a Enterprise Risk Management framework to address these issues. This design was meant strengthen the bank's governance, risk management, and operational processes, ensuring better oversight, accountability, and financial stability. [10] [11]

Partnerships

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The CDB collaborates with distinct institutions like the Green Climate Fund to promote sustainable development and climate resilience across the region. [12] The bank also facilitates soft loans and technical assistance for its smaller member states by working closely with partners like the Inter-American Development Bank and the World Bank. [13][14]

See also

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References

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  1. ^ a b c Ingham, Barbara, and Mark Figueroa. “W. Arthur Lewis and the Legacy of the Caribbean Development Bank.” Journal of Eastern Caribbean Studies, vol. 34, no. 4, Dec. 2009, pp. 1–20. Sir Arthur Lewis Institute of Social and Economic Studies, University of the West Indies. https://www.jecsonline.com/wp-content/uploads/2019/09/JECS-Vol-34-No.-4-Dec-2009.pdf.
  2. ^ Tomanović, M. (1971). Hronika međunarodnih događaja 1970. Belgrade. Institute of International Politics and Economics Archived 2018-08-16 at the Wayback Machine, p.2201. (in Serbo-Croatian)
  3. ^ Wood, Anthony, and Anya Lewis. “Risk Culture Development and Its Impact: The Case of the Caribbean Development Bank.” International Journal of Business and Economic Development, vol. 6, no. 1, Mar. 2018, pp. 18–24. Academy of Business and Retail Management. https://ijbed.org/cdn/article_file/content_48979_18-04-04-07-11-25.pdf.
  4. ^ "President | Caribbean Development Bank". www.caribank.org. Retrieved 2021-01-20.
  5. ^ "Saint Lucian Is New Caribbean Development Bank President". St. Lucia Times News. 2021-01-20. Retrieved 2021-01-20.
  6. ^ "Borrowing Members | Caribbean Development Bank". www.caribank.org. Retrieved 2021-01-21.
  7. ^ "Non-Borrowing Members | Caribbean Development Bank". www.caribank.org. Retrieved 2021-01-21.
  8. ^ a b c "Forging closer ties". Barbados Today. March 17, 2018. Archived from the original on March 26, 2018. Retrieved January 21, 2021. Smith pointed to the incorporation of Brazil, Colombia, Venezuela and Mexico as full members of the CDB. He also spoke of the imminent memberships of Cuba and the Dominican Republic, adding that the Bank was interested in incorporating the Argentine Republic in the near future.
  9. ^ "Development Business". devbusiness.un.org. Retrieved 2021-01-21.
  10. ^ Wood, Anthony, and Anya Lewis. “Risk Culture Development and Its Impact: The Case of the Caribbean Development Bank.” International Journal of Business and Economic Development, vol. 6, no. 1, Mar. 2018, pp. 18–24. Academy of Business and Retail Management. https://ijbed.org/cdn/article_file/content_48979_18-04-04-07-11-25.pdf.
  11. ^ Ingham, Barbara, and Mark Figueroa. “W. Arthur Lewis and the Legacy of the Caribbean Development Bank.” Journal of Eastern Caribbean Studies, vol. 34, no. 4, Dec. 2009, pp. 1–20. Sir Arthur Lewis Institute of Social and Economic Studies, University of the West Indies. https://www.jecsonline.com/wp-content/uploads/2019/09/JECS-Vol-34-No.-4-Dec-2009.pdf.
  12. ^ “Caribbean Development Bank (CDB).” Green Climate Fund, Green Climate Fund, 13 Oct. 2016, www.greenclimate.fund/ae/cdb.
  13. ^ Wood, Anthony, and Anya Lewis. “Risk Culture Development and Its Impact: The Case of the Caribbean Development Bank.” International Journal of Business and Economic Development, vol. 6, no. 1, Mar. 2018, pp. 18–24. Academy of Business and Retail Management. https://ijbed.org/cdn/article_file/content_48979_18-04-04-07-11-25.pdf.
  14. ^ Ingham, Barbara, and Mark Figueroa. “W. Arthur Lewis and the Legacy of the Caribbean Development Bank.” Journal of Eastern Caribbean Studies, vol. 34, no. 4, Dec. 2009, pp. 1–20. Sir Arthur Lewis Institute of Social and Economic Studies, University of the West Indies. https://www.jecsonline.com/wp-content/uploads/2019/09/JECS-Vol-34-No.-4-Dec-2009.pdf.
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