Government of Canada

Foreign Affairs, Trade and Development Canada

www.international.gc.ca

Caribbean Program

Table of Contents

International development projects in the Caribbean
International development projects in the Caribbean

CIDA disbursements in the Caribbean: 2011-2012

CIDA disbursements in the Caribbean
Amount in $M
Long-term development assistance
86.63
10.81
Total 97.43
Sources
A young girl hangs her teddy bears on a clothesline. © ACDI-CIDA/Roger LeMoyne

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 Canada's Caribbean Program.

Canada has a separate bilateral program for Haiti as well.

These 14 countries have a population of 7 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 affect 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. These circumstances result in a significant draw on public finances and undermine 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 as a country of focus for international development.

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.

Canada'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.

Canada'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. Canada will also continue to advance rule of law and strengthen legal institutions to counter rising crime and to maintain law, order, and personal security. Canada'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

Canada supports efforts to promote 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
Key anticipated results
  • Improved environment for business development, trade, and integration
  • More highly-trained staff in ministries of finance and central banks
  • Established national debt-management policies and procedures in eight countries
  • Strengthened the technical, planning, financial, and managerial capacities of small and medium-sized firms
  • Public-private joint investments in four physical infrastructure projects
  • Improved justice system
  • Mitigated the effects of natural disasters

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. Canada 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.

Canada's support to regional institutions will help build capacity and alignment, foster regional integration, and achieve economies of scale that are not feasible at the national level.

Achievements 2011-2012

Economic Growth

  • Supported improvements in public finance management which helped 4 out of 8 member countries to decrease their debt to GDP ratio
  • Helped 4 countries complete national mental health disaster plans and trained more than 350 Caribbean health workers to manage mental health issues after disasters;
  • Delivered first aid training in 916 communities;
  • Launched the first-ever Human Development Report for the Caribbean region, tackling the issues of security and crime;
  • Strengthened midwifery skills in the region;
  • Helped the Global Fund to Fight AIDS, Tuberculosis and Malaria provide HIV/AIDS treatment to 15,170 people, detect and treat 1,200 cases of tuberculosis, and distribute 150,000 insecticide-treated bednets to prevent malaria between 2002 and 2012;
  • Helped establish a life-long learning partnership among Jamaican farmers, educational institutions, and banks to improve livelihoods
  • Enabled the Caribbean Development Bank to build or upgrade 255 primary and secondary classrooms and train over 1,330 teachers, benefitting more than 40,200 students in the region.

Achievements 2010-2011

Economic growth

  • 5 countries introduced more efficient value-added taxes, leading to increased revenue for governments
  • 6 countries are modernizing customs systems and procedures, resulting in increased trade within the region
  • 8 countries adopted public financial management reform action plans
  • 11 countries undertook bank supervision and stress testing, resulting in increased transparency and stability
  • Continued to improve Jamaica's agricultural productivity, completing 40 commercial greenhouses (23 within the past fiscal year) and training participants, about 42 percent of whom are women
  • Using the Caribbean Catastrophe Risk Insurance Facility, the governments of Barbados, Saint Lucia, and Saint Vincent and the Grenadines accessed US$12.8 million in insurance after Hurricane Tomas in October 2010, enabling these countries to maintain services during the crisis and reduce fiscal pressures

Achievements 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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