ifc in the caribbean
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1
IFC in the Caribbean
Presentation on Small States
December 11, 2008
2
Caribbean Profile – Region of Diversity
OECS – OECS – IFC MembersIFC Members• Antigua and
Barbuda• Bahamas• Barbados• Dominica• Grenada• St. Kitts & Nevis• St. Lucia
Belize Jamaica Haiti
DominicanRepublic
Trinidad &Tobago
GuyanaSuriname
Belize Jamaica Haiti
DominicanRepublic
Trinidad &Tobago
GuyanaSuriname
13 countries• o/w 5 IDA and 8 non-IDA, 8 small states
11 island economies 30% living under $2/day High unemployment Anemic growth since early 1990s
3
Development Challenges of the CaribbeanDevelopment Challenges of the Caribbean
High unemployment, poverty and inequality• Rising crime
High HIV/AIDS incidence
Gap in education, skills and productivity • Brain drain • Labor cost is high relative to skills
High levels of public debt: i. 7 out of 10 (14 out of 30) most
indebted countries in world; ii. Average debt rose from 67% of GDP
(1997) to 96% (2003)iii. high tax rates
Small and fragmented market sizes• Economies vulnerable to disasters
and external shocks• Lagging growth and investments,
especially FDIs• Non-uniform regulatory climate
Increasing competition in tourism market• Few indigenous successes and little
linkages to local economy
Infrastructure constraints• Inefficient Ports and Customs • Costly Power and Water• Air/sea freight – Inadequate and
expensive route structure
Agriculture increasingly uncompetitive• Preferential access [US, EU]
removed
Public Private
4
Challenges for IFC
What products?
What delivery model?- Decentralization and industry specialization- Investment and Advisory solutions- Leverage donor dollars for advisory work and first-loss products
Issue Goal IFC/WBG Response
Markets Regional common market ?Harmonized enabling regulations BEE/ Doing Business reforms
Sponsors Needs hand-holding AS + IS solutions
Fiscal constraints Private sector steps in PPP models, advisory
InfrastructureEnergy Diversification and independence WBG study and geothermalTransporation Free movement of goods & traffic IFC study and PPP
Access to Finance Growth of SMEs
Tourism Sustainable, better branding Linkages
MSME, trade finance, credit bureau, housing
5
Strategy and Results
Funded US$1.3* billion in 48 investments, plus Funded US$1.3* billion in 48 investments, plus 14 Technical Assistance in the region14 Technical Assistance in the region
PRIORITY SECTORS:
- Access to Finance- Infrastructure- Healthcare & Education- ITC - Tourism
Focus Areas Results 2000-2008
* IFC’s own account + B-loan + co-funding
Financial Markets 302 23%
General Manufacturing 383 29%
Infrastructure 386 29%
Telecom 200 15%
OGM 56 4%
Health & Education 5
0%
6
Results: Reversing a Declining Trend
2 3 37
13
62
5
4
5 1
6
0
2
4
6
8
10
12
14
16
18
20
2003 2004 2005 2006 2007 2008 2009E
# of
pro
ject
s
DR/Haiti
ESC
• In 2009, a doubling of business• More complex projects requiring industry and advisory focus
2003 2004 2005 2006 2007 2008 2009E
141.4 89 72.9 250Commitment
(US$ mm) 115 67.1 164.6
7
Recent IFC Business Development Efforts 3 11 4 14 28 2 10 3 2 22 7 7 7
Business Enabling EnvironmentBusiness Edge, SME Toolkit
Credit bureau FM & MSME Banking Trade Housing
Infrastructure: PPP Advisory Investment
Tourism: Investment Linkages
Emerging Sectors: Health & Education Information Technology
Portfolio/mandated Pipeline deals
120 Business Development Trips
Trin
idad
& T
obag
o
Dom
inci
a
Gre
nada
Ant
igua
St. K
itts
St. L
ucia
Jam
aica
DR
Hai
ti
Bah
amas
Guy
ana
Financial Markets & Access to Finance:
Bar
bado
s
Bel
ize
BY SECTOR
BY COUNTRY
8
Systemic Efforts
Infrastructure Energy Independence
• World Bank study on alternative energy
(March-June 2009)• Geothermal (current)
A2F Transportation
• Inter-island Ferry (OECS)• Low-cost airline (East Caribbean)
Small businesses• Microfinance, SME• Credit bureau• Direct small investments (< $5.0 mm)
Coordination between WBG, Govt, Donors and Private Sector Important
Sustainable Tourism• Linkages• Agribusiness• Vocational training
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