The Caribbean Improvement Financial institution (CDB) president Dr. Gene Leon is urging regional nations to undertake an built-in strategy to threat mitigation to enhance threat profiles, as a method of making extra fiscal area to pursue Sustainable Development Goals (SDGs).
Dr. Gene Leon posited that presently Caribbean nations primarily determine and mitigate dangers in an remoted method, lacking important linkages, which perpetuates the area’s vulnerability to the influence of shocks leading to high-risk profiles.
“At present, worldwide traders demand excessive returns for investments within the Caribbean to compensate for these comparatively excessive dangers. These excessive returns translate into excessive funding prices for Caribbean governments, which put strain on fiscal sustainability and reduces fiscal area for the achievement of SDGs,” Dr. Leon defined.
“One other approach to view that is that the implementation of acceptable threat mitigation insurance policies improves threat profiles and by extension credit score scores; additional, the improved threat profile has a everlasting impact on creditworthiness, which reinforces entry to extra inexpensive financing. This attitude gives an answer that means a everlasting influence on our capacity to entry extra inexpensive finance whereas decreasing the reliance on temporary-impact, decrease fee concessional funding,” he added.
The CDB president suggested that an efficient nation threat administration strategy should acknowledge the interconnectivity of dangers and that the built-in enterprise threat administration frameworks utilized by establishments, together with the CDB, to handle present and rising dangers can be employed by nations.
“These instruments are relevant additionally on the sovereign degree to be used by governments to conduct a sound built-in framework that mixes local weather and non-climate dangers. It will be important that heads of governments embrace this new mind-set because it pertains to threat administration on the sovereign degree. Utilizing this built-in strategy is the one approach to successfully conduct threat mitigation, which as famous is essential to attaining sustainable growth objectives,” Dr. Leon stated. “On this context, threat mitigation generally is a catalyst in direction of attaining SDGs, by creating extra fiscal area from decrease funding prices to pursue SDGs, or by the use of accessing extra inexpensive capital to pursue SDGs. Threat discount can’t be achieved, nevertheless, with out the adoption of an built-in strategy to threat administration. Due to this fact, dangers mitigation insurance policies turn out to be a basis for decrease threat profiles and improved potential to attaining SDGs.”
The CDB president was talking on the Caribbean Regional Threat Convention, a joint initiative between CDB and CCRIF SPC.
The 2-day occasion addressed the myriad dangers dealing with Caribbean nations together with, local weather change, financial, geopolitical, environmental, societal, technological, and pure hazard dangers, which proceed to influence the area’s growth prospects.