Improving the business climate in the Caribbean

WASHINGTON, USA — The Inter-American Development Bank (IDB) is financing several programs to improve the business environment, foster diversification and enhance competitiveness in the Caribbean.

In recent years, the IDB has approved projects that are helping to reduce the cost of doing business and improve the region’s regulatory framework as well as enhancing the region’s capabilities to design and implement productive development policies. The Bank is also providing financing and technical support to improve the competitiveness of the private sector, particularly of small and medium-sized enterprises (SMEs).

In the past two decades the region has improved human development indicators significantly but its competitiveness and integration into the world economy remain a challenge. The recent global financial crisis and slow economic growth in North America and Europe have exacerbated the region’s needs to diversify its economy and its export base.

Compete Caribbean

Last year, the IDB teamed up with the Canadian International Development Agency (CIDA), and the United Kingdom’s Department of International Development (DfID) to support Compete Caribbean, a program to foster private sector development and improve competitiveness in 15 Caribbean countries.

The five-year program provides technical assistance and investment funding to implement productive development policies, business climate reforms, clustering initiatives and SME development activities within a comprehensive private sector development framework.

The program supports governments, chambers of commerce and industry, academic institutions, regional organizations and private sector entities in Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominican Republic, Dominica, Grenada, Guyana, Haiti, Jamaica, Saint Lucia, St Kitts and Nevis, St Vincent and the Grenadines, Suriname and Trinidad and Tobago.

The program integrates international best practices for private sector development and prioritizes projects that have a potential for positive impact on poverty reduction, gender equality and environmental sustainability.

Compete Caribbean currently has 28 operations under development and is expected to contribute to economic diversification, an increase in non-traditional exports, and the creation of approximately 8,000 new jobs in the region.

Caribbean Competitiveness Center

To increase the effectiveness of productive development policies in the Caribbean, the IDB and the United Kingdom’s Department of International Development (DFID supported the establishment of the Caribbean Competitiveness Center (CCC) at the University of the West Indies (UWI) which will be launched on March 25, 2011.

The Center will increase the institutional capacity to generate and share world-class and Caribbean-specific knowledge products on private sector development and competitiveness; and upgrade the technical capacity of academics as well as public and private sector officials on cutting edge approaches to competitiveness, business climate reforms, clustering and SME development.

Work with individual countries

The IDB is also working at the country level to reform tax and business incentive systems, expand access to finance, improve the business climate, and help small and medium-sized enterprises improve their productivity and become more competitive in national, regional and global markets.

In Barbados, the Bank is implementing a $11.8 million project to optimize the use of government expenditure, strengthen the business climate, improve trade facilitation and increase the competitiveness of productive sectors.

The project will provide information needed to determine a coherent framework for business development, implementing tools to assess the direct and indirect impact of alternative tax regimes on economic activity and government revenues. It will support the expansion of private sector participation in the economy and increase government effectiveness by reducing burdensome transaction costs, and establishing a more expeditious and equitable processing of investment applications.

Additionally, the project supports the modernization of trade logistics and trade facilitation services, with emphasis on upgrading the design of a Cargo Examination Facility (CEF) and risk assessment mechanisms, the establishment of an Electronic Single Window (ESW), as well as the overall update and improvement of customs procedures. The project will also support the restructuring of institutions that provide financial and non-financial Business Development Services as well as strengthen clusters and value chains to help firms improve productivity and access foreign markets.

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2 Comments

  1. Roger Burnett
    March 27, 2011

    A welcomed initiative, but I trust that one of the hands in the picture is from this region. Otherwise it might be taken to signify a done deal from outside.

  2. William McLawrence
    March 26, 2011

    This is definitely a positive move to improve the business environment, foster diversification and enhance competitiveness in the Caribbean, and in particular, Dominica. The Micro Small and Medium Enterprises (MSME) sector in Dominica needs serious attention both in terms of financial and technical support if this sector is to become competitive…in this global business village

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