What Is the Caribbean Development Bank (CDB)?
The Caribbean Development Bank (CDB) is a multilateral financial institution (FI) dedicated to assisting Caribbean nations and dependencies achieve sustainable long-term economic growth and development. In addition to financing programs that contribute to the social and economic development of the Caribbean region, the Caribbean Development Bank (CDB) provides its member states with advice and research on economic policies.
- The Caribbean Development Bank (CDB) is a multilateral financial institution (FI) dedicated to assisting Caribbean nations and dependencies achieve sustainable long-term economic growth and development.
- The bank finances programs that contribute to the social and economic development of the region as well as provides member states with advice on economic policies.
- Loans are usually made to governments and public sector entities, although private sector institutions based in member states can also apply.
- Approximately 55% of the CDB's shareholder equity is owned by its borrowing members.
Understanding the Caribbean Development Bank (CDB)
Headquartered in Barbados, the Caribbean Development Bank (CDB) currently serves and supports 19 of the 20 member states that make up the Caribbean Community and Common Market (CARICOM) by providing their governments as well as their public sector entities with debt financing for projects. In 2019, slightly more than half of the bank's total loan portfolio was accounted for by Jamaica, Barbados, Belize, and Antigua and Barbuda.
Private sector institutions based in member states are also able to apply for financing. For example, LIAT, the Caribbean's largest airline company, borrowed $65 million in 2013 from the Caribbean Development Bank (CDB) in order to upgrade its fleet.
Approximately 55% of the bank's shareholder equity is owned by its borrowing members, with the rest of the remaining equity being owned by non-regional countries such as Canada, the U.K., and China. The Caribbean Development Bank's (CDB) two largest shareholders are Jamaica and the Republic of Trinidad and Tobago, which each hold a 17% stake in the entity.
The Caribbean Development Bank (CDB) has a total of 28 member countries, consisting of 19 regional borrowing members, four regional non-borrowing members, and five non-regional, non-borrowing members.
History of the Caribbean Development Bank (CDB)
In 1966, following a conference with Canada, a proposal to study the possibility of establishing a FI to serve the Caribbean countries and its territories was given the green light. The report arrived one year later, in 1967, recommending that a Caribbean Development Bank (CDB) be set up with an initial capital of $50 million.
Once this recommendation was accepted, the wheels were put in motion to get the bank up and running. A preparatory committee was established and a project director appointed, with assistance from the International Bank for Reconstruction and Development (IBRD), now known as the World Bank, the Inter-American Development Bank (IDB) (IDB), and the United Nations Development Programme (UNDP).
The Caribbean Development Bank was finally established in Oct. 1969 in Kingston, Jamaica, entering into force the following year in Jan. 1970.
Examples of the Caribbean Development Bank's (CDB) Activities
The Caribbean Development Bank (CDB) funds a number of different projects. At present, its core goal is to reduce inequality and halve extreme poverty in its borrowing member countries by 2025. The bank is setting out to achieve this by throwing its muscle behind projects covering food safety management systems, agriculture enterprise programs, infrastructure development, improving education, and supporting small and micro-businesses.
Many of the current projects underway also focus heavily on climate change and disaster prevention. Throughout the years, the region's geographic location has made it susceptible to natural disasters. Hurricanes and volcanic eruptions have destroyed homes and businesses, taken lives, and regularly impeded economic progress in the Caribbean.
In Sept. 2019, the Caribbean Development Bank (CDB) offered to provide nearly $1 million in relief funds to the Bahamas after Hurricane Dorian wiped out entire neighborhoods and left thousands of people without food, water, and shelter.
A $200,000 grant was allocated to the Bahamas National Emergency Management Agency for humanitarian assistance, on top of a $750,000 loan to assist with the cleanup and short-term recovery of the country.