Caribbean Program

Overview

Fourteen countries in total―11 island states (Antigua and Barbuda, Bahamas, Barbados, Dominica, Grenada, Jamaica, Montserrat, Saint Kitts & Nevis, Saint Lucia, Saint Vincent & the Grenadines, Trinidad & Tobago) and 3 continental ones (Belize, Guyana, and Suriname)―are served by CIDA's Caribbean Program.

CIDA has a separate bilateral program for Haiti as well.

These 14 countries have a population of 6.8 million in total. With undiversified industrial sectors and lacking economies of scale, they compete with each other for tourism, which accounts for 20 percent of the gross domestic product (GDP) and 34 percent of the employment in the region.

In addition, the countries remain highly indebted―public debt averages 85 percent of the GDP (IMF 2008)―raising risks of macroeconomic instability. High debt servicing is already an obstacle to economic growth in the region.

Over the past decade, the region has made progress in poverty reduction and social development. However, recent history has also underscored the vulnerability of Caribbean states. There has been a decline in the region's traditional economic base, which focuses strongly on tourism and exports of products such as bananas and sugar. Crime, instability, and violence are serious problems that, among other factors, can negatively impact tourism. There has also been an increase in the frequency of natural disasters, and HIV/AIDS continues to be a serious health problem.

The Eastern Caribbean region is situated in a hurricane belt and is a seismically active area―12 times as exposed to natural disasters as the world average. This presents a significant draw on public finances and undermines private sector capacity to sustain investment and growth. The global economic crisis of 2009 has hit key sectors of the Caribbean economy, particularly tourism and commodity exports. Worker remittances, which account for 8 to 20 percent of the Caribbean GDP, are in decline. Governments face serious fiscal difficulties, and public spending is being cut. Private sector investments and external capital flows are also falling. Expected effects are a rise in unemployment, a greater degree of inequality, and an increase in crime. Job losses could lead to an ever-expanding and insecure informal sector.

The region has taken bold steps to join the separate economies in a single market called the CARICOM Single Market and Economy, although the process is not yet complete. Even with this achievement, additional political will, leadership, and capacity development, coupled with broad based economic growth, will be needed to advance regional integration.

Overall, the governments in the region are politically stable, with a long tradition of democratic elections. Nevertheless, further work is needed to build the capacity of regional institutions and national governments.

A more competitive regional economy will provide the basis for investment, economic growth, and poverty reduction. Cooperation to develop effective regional services will strengthen security and social development. Caribbean states are committed to democratic practices, respecting human rights and fighting corruption.

Thematic Focus

In 2009, as part of Canada's new aid effectiveness agenda, the Caribbean region was selected by CIDA as a country of focus.

Through CIDA, Canada supports the development agenda established by CARICOM to achieve regional integration. While CARICOM promotes greater regional cooperation and harmonization, there is not yet a comprehensive regional development plan for the member countries.

CIDA's long-term goal in the Caribbean region is to help build a more prosperous and integrated Caribbean community, one that is able to generate sustainable economic growth, and eventually provide opportunity and security to its citizens.

CIDA's support will be directed at creating an enabling and predictable environment for economic growth through the increased capacity and accountability of public institutions and by fostering a more competitive private sector. CIDA will also continue to advance rule of law and strengthen legal institutions to counter rising crime and to maintain law, order, and personal security. CIDA's objectives for the Caribbean region include assistance for improving the capacities of the governments to manage and respond to natural disasters and to strengthen regional disaster coordination mechanisms.

Economic growth

CIDA's programming will focus on promoting sustainable economic growth, through:

• Strengthening the management of public financial resources, including debt management
• Increasing access to employment skills for youth
• Strengthening the productivity of small- and medium-sized enterprises and increasing participation in regional and global markets
• Promoting public-private partnerships that generate employment and attract investment for growth

Progress on Aid Effectiveness

Donor coordination remains strong with active sectoral working groups. For example, donor harmonization is advancing, with model initiatives underway in disaster management, trade and competitiveness, and public financial management. CIDA plays a leading role in all of those areas.

As a region, the Caribbean is still working to develop a shared and coherent development vision. Regional institutions, such as CARICOM, have an important role, not fully realized yet, to mediate and articulate the often-divergent views, needs, and interests of member states.

CIDA programming through regional institutions will help support alignment, build capacity, foster regional integration, and achieve economies of scale that are not feasible at the national level.

Accomplishments 2009-2010

Economic Growth

• Made improvements to Jamaica's agricultural productivity, completing 17 commercial greenhouses, rehabilitating three fishing beaches,and training participants
• Helped women gain better access to credit through microfinance, representing 66 percent and 73 percent of total borrowers in the Guyana and Jamaica initiatives respectively
• Helped agricultural incomes grow by more than the targeted 20 percent in the first year of a project with 1,261 smallholder farming households receiving training, farm tools, and information to increase and diversify agricultural outputs in Guyana
• Helped five states upgrade their national emergency operation centres and trained 158 people, through disaster preparedness projects that improved hands-on disaster risk mitigation and risk reduction in Barbados, Suriname, Saint Vincent and the Grenadines, and Dominica

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