HAAD TIME KECH AN KILL: CARIBBEAN DEVELOPMENT FUND AVAILABLE

Belize as one of the founding members of the Caribbean Community (CARICOM) has been actively engaged in the process of fostering greater regionalism with the Community.  The Revised Treaty of Chaguaramas of 2001 established the CARICOM Single Market and Economy (CSME), with the intent of creating a single economic space within the region.  It was evident that member states at various levels of development would require varying levels of support if they are to be able to realize the benefits of further integration.   It was recognized that in order to realize the objective of deepening regional integration as a means to achieving sustained economic development for member states,  that  new institutions would be required to support this objective. In an effort to address the dilemma identified; that of countries having varied levels of development and vulnerability of disadvantaged countries, regions and sectors, the Revised Treaty as contained in Article 158, called for the “establishment of a Development Fund for the purpose of providing financial or technical assistance to disadvantaged countries, regions and sectors.”   Article 4 of the Revised Treaty listed Belize along with the small islands of the Eastern Caribbean, as less developed countries within the region.  A review of the role and function of the Development Fund will be presented with an indication of how Belize can avail itself of this new opportunity.
In July 2008 the Hon. Wilfred Elrington1, as Minister of Foreign Affairs, signed and executed on behalf of the Government of Belize the Agreement related to the operation of the Caribbean Development Fund (CDF).  The Fund in providing financial and technical assistance would address the following needs:
i    Attract new investments and new industries ;
ii    Ameliorate adverse social impact arising from the operations of the CSME;
iii    Improve efficiency and competitiveness of industry;
iv    Achieve structural diversification and infrastructural development needs;
v    Facilitating regional investment promotion and mobilization; and
vi    Enhancing business development and enterprise competitiveness, by assisting to achieve standards such as ISO and HAACP and best practices in production and marketing.
Areas not to be financed by the CDF include:
•    Complex projects that have multiple objectives;
•    Balance of payment support for governments; refinancing activities and debt consolidation that does not create new or improved productive capacity; and
•    Working capital.
The CDF is governed by a Board of Directors, with Dr. Carla Barnett as Belize’s representative on that Board as its deputy chair.  The CDF has its own legal identity but as a CARICOM institution it reports to the Council for Trade and Economic Development (COTED) and CARICOM Heads of Government.  All parties to the CDF Agreement have an obligation to contribute towards the capitalization of the Fund.  Belize’s assessed contribution is US$3.05M.  Eligible recipients of the CDF are member states’ government and subject to the approval of the member state government, any regional or private sector entities that are concerned with the economic development of their respective country.  This therefore, means subject to GOB’s approval, private sector enterprise can access funding from the CDF.  In the first contribution cycle (3 years), the CDF will focus on disbursing concessionary loans and grants that address objectives related to the implementation of the CSME.  To ensure the sustainability of the Fund, loans would range between US$0.5M and US$4M. The minimum size of a grant would be US$20,000.  Total grants would be limited to the sum of a country’s contribution.  The CDF would charge a variable interest rate on loans, with rates set at 3% for government and 6% for private sector in this first contribution cycle.  Repayment terms would vary from 15 years for government to 10 years for private sector; with maximum grace periods of 3 years and 2 years respectively.  Lending is limited to 80% for government and 50% for private sector in the case of loans.  A 1% commitment fee is charged on all loans.  For grant funding, the limit is 90% of project cost for government and up to 60% for private sector.  Therefore, in no case would a recipient be able to seek 100% funding from the CDF.
PM Barrow, in his News Years address, indicated that GOB would be in receipt of some funding from CDF, but further detail was not forthcoming.  It is therefore, extremely important that private businesses with the potential of increasing their productive capacity, seek to consider the CDF as a viable source of low cost funding as the private sector plays a positive role in Belize’s economy recovery efforts.
It goes without saying that the effort of Government and its representative on the Board, Dr. Carla Barnett, must be to spearhead efforts that would adequately inform and support Belizean businesses and their anticipation for funds.  In a time of recession, a mark of failure on the part of Government would be that the productive sector, as a result of not being informed, did not access the facility.
Our dilemma has been that Government’s support by way of proactively initiating creative measures whereby businesses can access cheaper finances, has been woefully absent.  This situation cannot continue to obtain.
1 With respect to the Hon. Elrington’s  statement of an artificial border, It is the view of this columnist that whereas it is understandable that the minister may have rethought his personal position on the Guatemala issue and other foreign affairs matters; the constitution provides for no greater responsibility than the protection of Belize’s sovereignty with all its territory intact.  Clearly, sufficient time has elapsed for a national retraction and international clarification; it now behooves the PUP as a means to indicate seriousness of intent in this matter, that they should go further and indicate that they will withdraw from these talks until and unless Minister Elrington resigns.  There must in my opinion be clarity on this issue if on no other.
Send comments to GwynethNah@gmail.com

| | | | | |