Barbados has secured the highest level of membership in the Development Bank of Latin America and the Caribbean (CAF), giving the country access to more development financing and a vote at the decision-making table. But a local economist warns that the move, while promising, won’t mean much unless the government utilises the opportunity wisely.
Dr Antonio Alleyne told Barbados TODAY that becoming a full Series “A” shareholder puts Barbados in a better position to borrow for national projects. However, he stressed that the upgrade is only an opening, not a guarantee of progress.
“It doesn’t really mean anything at this point,” Alleyne said. “It provides opportunities to have access to money. Remember, borrowing is not necessarily a problem [but] the ability to pay back what you borrow for.”
Barbados has been a CAF shareholder since 2014, but the new status gives it more influence and access. Once the transition is complete, the country will join Trinidad and Tobago as the only full CARICOM members and gain a seat on CAF’s Board of Directors.
CAF has already committed US$15 million to Barbados’ Blue-Green Bank initiative, aimed at unlocking climate finance for small island states. It also plans to open a Bridgetown office to serve the Eastern Caribbean.
Still, Alleyne cautioned that the real impact will depend on future decisions.
“We’re just subscribing to joining… putting ourselves in a position to be able to access greater funds, but we haven’t borrowed anything yet. That’s when we need to pay more attention, when we decide to borrow and what we borrow for,” he said.
He described the move as a neutral policy shift that creates “a strategic window of opportunity or a disaster,” depending on future decisions.
“It would be remiss of me as a true economist to say it means something negative or positive,” he said. “All it does is give you the chance… an opening. It’s what we do with it that matters.”
The Extraordinary Assembly of CAF shareholders recently approved the transition of Barbados to Series “A” shareholder status.
“The addition of Barbados as a CAF member country is an honour and a demonstration of Barbados’ confidence in CAF and our growing development assistance to the Caribbean,” CAF’s Executive President Sergio Díaz-Granados said in a statement.
“Under the leadership of Prime Minister Mia Mottley, Barbados has established itself as a global voice for climate action, with a very ambitious resilience agenda. By becoming a full member country of the institution, we will be able to expand the technical and financial support we provide to the country and more efficiently accompany its development priorities,” he added.
The decision to deepen ties with the regional lender comes just months after the country completed its multi-year Extended Fund Facility agreement with the International Monetary Fund (IMF), marking the end of an era of fiscal reforms and external oversight.
Alleyne acknowledged that exploring alternative financing streams post-IMF is not in itself a bad move, but stressed the need for transparency and discipline in the event of future borrowing.
“Joining a club to have access to more money is always good. But when the time comes to borrow, and it’s not conducive for developmental purposes, then that’s when people can start to throw licks at the government,” he said.
(SM)
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