Caribbean’s financial sector must match cash with needs, reduce risks- Ali tells Jamaica Stock Exchange conference

Last Updated on Thursday, 26 January 2023, 22:32 by Denis Chabrol

President Irfaan Ali on Thursday urged Caribbean financial institutions to partner with the rest of the world in mobilising the US$10 billion that the Caribbean Development Bank (CDB) estimates is required to address the region needs.

“We know that this cannot be done from the savings in the region and, therefore, the challenge will have to involve partnership with others but also play the role as a catalyst for development,” he told the opening of the Jamaica Stock Exchange’s (JSE) Regional Capital Market Conference 2023.

Recommending that the Caribbean’s financial architecture must be modernised and integrated, he said the time has come for more regional commercial and indigenous banks to be established. Dr Ali also wants to see the regional financial sector’s investment to become more aligned with food and energy security including energy transition to cleaner and renewable energy which will require multi-billion dollar investments.  “Without investment, our region’s energy and food security plans will flounder,” he said. With Latin America and the Caribbean expected to face a major food crisis, he added that that would be an investment opportunity for a regional food hub and agri-tech zone to reduce food import bills and create a viable “plank” for farmers. He said Guyana was teaming up with Brazil, India and Barbados to increase food production and supply.

The CDB last week announced that consultants would later this year provide details about a proposed shipping route to link Guyana, Trinidad, Barbados and Grenada.

The Guyanese leader singled out the need for the financial sector to invest in a consortium to fix the Caribbean’s logistics and transportation woes. Since the virtual collapse of regional airline, LIAT (1974) Limited, and the absence of a cost-effective maritime shipping network, Caribbean peoples have been finding it extremely costly and difficult to move and ship agricultural produce and products across markets. “We need to develop a financial model and a creative vehicle to raise the capital that we can demonstrate a feasible way in which we can fix the transport and logistics problems in the region,” he said.

Delegates at the JSE Regional Capital Market Conference 2023 were reminded about the need for capital markets to be strongly regulated and subjected to  stiff due diligence in order to reduce  extreme risks of implosion. In apparent reference to the now aborted sale of Scotiabank (Guyana) to the Trinidad and Tobago-owned Republic Bank which already operates in Guyana, he said that decision was aimed at insulating Guyana’s financial sector. “Guyana has been careful with the management of its financial sector. A short while ago, we came in for some criticism for denying the buying of a certain financial institution by a major regional bank but we are mindful of the risk involved in allowing any one institution to have an inordinately large share of the sector which can expose us to risk,” Dr Ali said. Back in 2018, Republic Bank had formally agreed with Scotiabank to acquire the latter’s operations in Guyana and several other Caribbean countries but the local regulator, Bank of Guyana, had objected to the sale.