KINGSTON, Jamaica- Increased investments led by a stronger private sector, to drive long-term sustainable and inclusive growth in the Caribbean, was the chief recommendation of a recent World Bank Group report that has been endorsed by the Caribbean Development Bank (CDB).

According to the report, also done in partnership with the International Finance Corporation, the private sector arm of the World Bank, small Caribbean states in accelerating private sector development must address key areas of vulnerability to improve the investment climate while fostering an environment that is conducive to trade and the promotion of growth.

CDB Vice-President of Operations Isaac Solomon, in further underscoring the critical role of private enterprises, credited them as an essential factor in the sustainable development equation. He indicated that a vibrant private sector can build new industries, increase competitiveness in global markets, as well as spur economic growth and job creation.

“We are gearing up to play a stronger catalytic role in generating private investment. We continue to position ourselves to be at the forefront of transforming the financing landscape, attracting more resources that will help to address many of the challenges facing our populations. Through our new Private Sector Development Framework, which is now well-advanced, the CDB is aiming to facilitate the development of dynamic, internationally competitive, high-growth firms to drive higher incomes and increased economic resilience at both the national and regional levels,” he stated.

In a Caribbean Regional Private Sector Diagnostic (RPSD), the global financing bodies outlined a number of ways to reduce cross-cutting constraints to private investment— citing gaps in connectivity, skills mismatches and limited access to financing, especially among small and medium-sized enterprises (SMEs), among the challenges which, if properly addressed, could break the region’s current low-growth and low-productivity trend.

The study which also zoomed in on critical sectors such as the digital economy and renewable energy, posited them as two key areas in which greater private investment could contribute to export diversification and job creation, enhance productivity, and strengthen resilience to climate change and natural disasters.

“The RPSD provides a roadmap to advancing reforms that will unlock the full economic potential of the Caribbean and further enable the private sector to become an engine for inclusive growth and innovation, including strengthening the digital economy and transitioning to renewable energy,” said Susan Lund, vice-president for economics and private sector development, IFC, during a hybrid event in Bridgetown jointly organised with the CDB.

As per the RPSD, leveraging digital services could be transformational in the region, helping countries to reposition and to tap into newer and more complex services. This, as they also enhance the productivity of traditional sectors and the quality and inclusiveness of public services. Concurrently, states in transitioning to renewable energy can also generate green growth, jobs, and diversified income, while mitigating the region’s dependence on imported heavy fuels and reducing energy costs for key sectors such as tourism.

The regional diagnostic, deemed the first of its kind, covers some 12 micro and small states including Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago, which despite their differences share similar cultures, language, geography and comparable challenges, thereby creating opportunities for collaboration and mutual learning.

“To realise the economic potential of the Caribbean, there is a need to bolster regional linkages and economic diversification and a move to greener and more inclusive growth,” added World Bank Country Director for the Caribbean Lilia Burunciuc.