Archive for October 2014

Big Jump in the Doing Business Indicator Ranking, More Improvements Expected


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by Juan Pedro Schmid

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50-what? That was my reaction when the IDB representative told me the news that Jamaica had moved up in the World Bank’s Doing Business indicator from 94 in 2014 to 58 in 2015 (the World Bank changed the methodology, so officially they moved from 85 to 58, not too bad either).

We all know that Jamaica is in the process of doing a series of reforms that will positively impact on the Doing Business indicator. They will come on stream very soon but could not have made the cut for this year’s indicator. So I started wondering whether the Doing Business team has had a generous day during their visit to Jamaica and included some almost finished reforms to give the country ranking such a boost.


Looking at the detailed report, I had an even bigger surprise: the move in the ranking was almost entirely caused by the changes in the ranking for ‘Getting Credit’, which jumped from rank 125 to 12  (Jamaica also improved the ranks for starting a business and getting electricity). Jamaica recently introduced two credit bureaus, which should improve the risk assessment of banks for giving loans and thus reduce lending rates and facilitate access to credit. In addition, the country adapted a new law on secured transaction (Secured Interest in Personal Property –SIPP), which broadens the range of assets that can be used as collateral and established a unified collateral registry.

Both reforms should improve access to finance, which remains an important concern for smaller companies in Jamaica. They also show that structural reforms take time and can benefit from collaboration between Multilaterals and governments. For both areas, the IDB has been working with the government since 2006, including through US$150 million budget support disbursed between 2008 to 2013.


Given the prominence that the Doing Business Indicator has, the news could also help Jamaica attract foreign investors. It shows that Jamaica is serious about growth-enhancing reforms, especially when we consider that important reforms are taking place that will further improve the DB indicator for Jamaica. New insolvency legislation has just been passed, electronic business registration should be possible in early 2015 and streamlining of construction approvals is very high on the agenda of several ministries. All of these address specific areas of the Doing Business Indicator.

As such, I congratulate the Government of Jamaica for this important achievement and look forward for the next surprise in the 2016 Doing Business Indicator.

Housing Policy and Urbanization in the Caribbean: The State of the Debate


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by Michael G. Donovan

Relief_Map_of_CaribbeanPhoto courtesy of National Oceanic and Atmospheric Administration via Wikimedia Commons

Despite the existence of several successful housing programs in the Caribbean, governments and the private sector have not produced enough housing units to accommodate the growing population. Today, many households cannot afford even the cheapest units produced in the formal private sector and most public sector housing. Faced with this situation, residents are increasingly paying larger amounts of their income to cover formal housing or opting for informal housing where over five million residents live in the twelve countries represented in the Caribbean Association of Housing Finance Institutions (CASHFI). In Jamaica alone, nearly 20% of residents live in slum conditions. > Read more

Child Abuse: Breaking the Cycle through Public Education?


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by Janet Quarrie

534px-USMC-07144Photo courtesy of Wikimedia Commons 

October is being celebrated as “Domestic Violence Awareness Month”.  It’s a good time for us to reflect on issues close to home. I was pointed to an interesting article published in the New York Times entitled Punishment or Child Abuse.  The author dealt with the topic in the context of the American society, but I want to take a few minutes to analyse it in the context of the Jamaican society and to see how we can assist in this regard. > Read more

Get Up, Start Up: Local and global partners help launch young entrepreneurs in Jamaica


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by Winsome Leslie


Recently, I spent a few hours in a conference room with 60 young tech entrepreneurs in downtown Kingston.  Their excitement was palpable.  This was the final day of the Start-Up Jamaica boot camp, led by coaches from Oasis500, a Jordanian company that provides entrepreneurship training, business incubation, mentoring, and seed funding to help turn new tech ideas into startups.  Oasis500 is one of the key partners supporting Start-Up Jamaica, the first Jamaican accelerator focusing on technology.  This initiative is a unique public-private sector partnership, bringing together the Ministry of Science, Technology, Energy and Mining, the Jamaica National Building Society, LIME Jamaica (formerly Cable and Wireless), Oasis500, the National Commercial Bank of Jamaica, and Caribbean Export Development Agency. Start-Up Jamaica is an important step in providing support to fledgling companies, but it is also viewed by the partners as much more: a key part of positioning the country to be an entrepreneurship and innovation hub in the Caribbean. > Read more

Much More than a Mosquito Bite


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by Guest blogger, Jonathan Cali

Did you know that as of 2005, nearly a quarter of residents of the capital region of Guyana were at risk of suffering lymphatic filariasis, an illness that causes permanent swelling in body extremities? This painful condition is locally known as “Goadie” and “Big Foot,” but what causes it?

Lymphatic filariasis is a disease classified as a Neglected Tropical Disease (NTD) due to its continued existence in only a few regions of the world. This disease is transmitted when an infected mosquito bites a person and injects him or her with thread-like filarial worms. These worms multiply inside the body until they ultimately block or destroy the infected person’s lymph vessels, potentially resulting in extreme swelling and constant pain. > Read more

Three ways multilaterals support local banks and drive innovation in the Caribbean


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by Hans Schulz


Local banks are a core component of the market architecture in Latin America and the Caribbean with the potential to catalyze innovation and growth. As I return from the Americas Competitiveness Forum in Trinidad & Tobago, my third visit to the country this year, I am reminded how dynamic and innovative its business environment is and how multilaterals can better engage Caribbean business. Here are three ways we support local banks and drive innovation.

 1.      Small and medium enterprise scoring

Small and medium enterprises (SMEs) contribute to GDP, employment, innovation and competitiveness. Yet in Latin America and the Caribbean, access to finance constrains them. Regional SMEs receive 12 percent of total credit compared to 25 percent in OECD countries. The region’s estimated credit gap is $125-155 billion.

Targeted and innovating credit scoring models can support local banks to close the gap. We have seen the success of non-traditional credit assessment methodologies, such as Entrepreneurial Finance Lab (EFL). EFL is a cost-effective, automated way to assess borrowers’ willingness to repay without relying on formal credit history.

In 2012, we approved a facility focused on local banks lending to MSMEs with EFLBanco Interamericano de Finanzas in Peru was first to participate. Technical assistance to incorporate EFL is being provided to 13 other financial institutions, such as Haiti’s Sogesol and the Dominican Republic’s BHD.

Another way to address access to finance is through local rating agencies. We have engaged CariCRIS in the Caribbean to expand SME ratings and to build local bank capacity to better understand the rating system. The project targets 60 SMEs and four commercial banks in the Caribbean.

2.      Women entrepreneurs

Women entrepreneurs have tremendous potential to create jobs, innovate and foster competitiveness.  In the Caribbean, the number of firms with female managers is higher (24 percent) than in Latin America (19 percent).  We have seen women entrepreneurs pilot new technologies and diversify the product and service offerings in local economies. From 2000 to 2010, the rise of women’s incomes alone contributed to a 30 percent reduction in extreme poverty in Latin America and the Caribbean.

However, only one in five women-led SMEs in the region have their working capital needs financed by banks. Yet research demonstrates women are less likely to default and more loyal and likely to take advantage of cross-selling opportunities –  an ideal client segment.

To reach women, who still make up $86 billion of the regional credit gap, the IDB Group targets banks through the women entrepreneurshipBanking program. We now have $110 million in approved loans plus technical assistance to local banks with the goal of reaching 100,000 women SMEs by 2019. Lending strategies inclusive of women can benefit banks and provide the financing solutions that support business innovation.

3. Environmentally-friendly green lines

The region is slowly realizing that a thriving planet correlates with a thriving business environment. Local financial institutions are one cost-effective channel to support renewable energy, energy efficiency, sustainable agriculture, forestry and other “green growth” projects. Banks are increasingly being approached by “green” project developers seeking finance. Until recently, few banks knew what to do.

Multilateral financial products and technical knowledge can provide private banks working capital and know-how.Training can include energy efficiency audits for sub-borrowers to identify energy saving investments and consulting to understand which financing products are most appropriate. This mitigates banks’ perceived risks and strengthens local capacity to originate in the sector.

Currently, we have 14 approved planetBanking Green Lines deploying $626 million in IDB capital to local banks. Additionally, this portfolio relies on borrowers’ and other co-financing partners’ resources to de-risk and build capacity.

With some of the world’s highest energy costs, businesses in the Caribbean are especially poised to benefit from innovative banking products that finance alternatives to traditional sources of energy or promote efficiency.

Supporting local banks to target SMEs, women and green growth, we as multilaterals can positively impact sustainable business, innovation and economic and social development.



Originally posted on the IDB’s blog, Sustainable Business

HIV Positives in the Caribbean


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by Jan Gilbert

AIDS-ribbon (1)
Photo Courtesy of Wikimedia Commons, Author, Amada44

I sat frozen, shell-shocked at the news she had just given me. She was only in her twenties and had her whole life ahead of her. Her words replayed in my mind like a scratched record. She was HIV positive. Admittedly, I was not sure how to react. My own selfish needs made it difficult to immediately see that she needed my support. My mind raced with so many thoughts! How could this happen in this day and age with so much education and ready access to condoms? I tried to block the judgmental thoughts from my mind. I spent the next two weeks crying, lamenting at the potential loss of such a bright mind. > Read more

Energy Efficiency Promotes Sustainable Development in the Caribbean


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by Alice Driver

Glühwendel_brennt_durchPhoto Courtesy of Author Stefan Krause, Germany via Wikimedia Commons

October 15th  marks the launch of the United Nations Decade of Sustainable Energy for All (SE4ALL) in the Americas, an event that is being hosted in Santiago, Chile by President Michelle Bachelet in conjunction with the United Nations and the Inter-American Development Bank (IDB). The event and subsequent conference will highlight the fact that sustainable energy is sustainable development, and will define the vision of the SE4ALL in Latin America and the Caribbean for the next decade. SE4ALL has three key objectives: to ensure universal access to modern energy, to double the global rate of improvement in energy efficiency, and to double the share of renewable energy in the global energy mix. In LAC, which already has the highest rates of energy access and use of renewables of any region in the world, energy efficiency is an area where great strides can be made.

There is nothing sexy about energy efficiency, which is perhaps why the subject receives less attention than it deserves. However, it is one of the best investments governments, businesses, and residents can make to decrease pollution and lower energy bills. The IDB recognizes the importance of promoting energy efficiency in the region, and has diverse programs that promote energy efficient technology, education, and energy audits. For example, the Caribbean Hotel Energy Efficiency Action Program (CHENACT), which was funded by the IDB, has met with success since its 2009 launch. It is an energy and climate change project in the tourism sector that helps hotels assess and invest in energy efficiency measures. Something as simple as choosing energy efficient light bulbs can dramatically lower energy costs for individuals and businesses alike. For example, incandescent light bulbs cost around $1.50 and last 1,200 hours. Although LED light bulbs require a greater initial investment, $7, they last 50,000 hours, which produces savings in the long-term. The program focuses on how renewable energy and micro generation can help hotels become more competitive over the long-term. > Read more

Unemployment and Growth: Does Okun’s Law Apply to Trinidad and Tobago?


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by CCB Caribbean Economics Team

Market_Produce,_Debe_Market,_Trinidad_and_Tobago_croppedAuthor & User Kalamazadkhan, Photo courtesy of Wikimedia Commons

 CCB’s Caribbean Economics Team is pleased to send the tenth Issue of the Caribbean Region Quarterly Bulletin.

Are output changes and the unemployment rate related in Trinidad and Tobago? According to the economic theory known as Okun’s Law, the two variables should be negatively correlated, and for the United States this relation holds quite well. We test this hypothesis for the economy of Trinidad and Tobago using annual data between 1980 and 2012 and also look at more recent quarterly data, accounting for the fact that the energy sector is a large contributor to the country’s GDP. We find that the relation between unemployment and real growth is negative but weaker in Trinidad and Tobago, compared with the United States, but seems to be clearly affected by underestimation of the unemployment rate in recent years. This exercise also reinforces the importance of improving labor and GDP statistics in the country. > Read more

Good bye to summer of 2014!


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by Julian Belgrave

BeachAuthor & User toastbrot81, Photo courtesy of  flickr

Good bye to summer of 2014!  It is now Autumn/Fall or Spring depending on how far north or south of the equator you find yourself and you may be pondering what the next winter or summer will bring. Those of us closest to the centermost line of latitude will be peeking over the horizon with bated breath anticipating the arrival of a late season tropical system. Some will be ruminating on where all that the time went.

Are you on track towards meeting your individual, team and/or unit’s goals for the year? What result(s) do you have to show? What have been the result(s) of all your efforts? What about your performance evaluation? Are your efforts going to be noticed or (“heavens forbid”) rewarded? > Read more

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The views expressed in this blog are those of the author and do not necessarily reflect the views of the Inter-American Development Bank, its Management, its Board of Executive Directors or its member Governments.

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