[dropcap]O[/dropcap]ctober saw the news the World Bank would provide $20 million of funding towards strengthening the public health care system here in Saint Lucia. This initiative itself is notable, yet also follows on from other projects within the nation in education, combatting the impact of climate change, and energy development.
While anything with a headline price tag like $20 million will always garner much attention and enthusiasm, the diverse work of the World Bank is something often overlooked until it is viewed overall, just as the priorities of certain Bank projects can often slip by those who may not have an in-depth interest in the relevant field.
So what has the track record of the World Bank’s funding initiatives in Saint Lucia been like? And how does the Bank approach its work in the wider Caribbean region? Let’s look now.
THE HISTORY OF THE WORLD BANK
For nations across the globe the World Bank has long played a vital role in fostering economic growth and seeking to secure stability during times of crisis. Established following World War II, the Bank is commonly identified as one organisation.
Yet, in practice, it is actually five groups all bound together: the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), the International Centre for Settlement of Investment Disputes (ICSID), the International Development Association (IDA) and the Multilateral Investment Guarantee Agency (MIGA).
Beginning chiefly with a role of lending and providing loans to nations ravaged by World War II so that they could rebuild, subsequent years have seen the bank become best known for its role in funding capital projects and assisting developing nations in economic growth, with the IBRD and IDA serving as the two core wings of this goal.
SAINT LUCIA AND THE WORLD BANK
Within Saint Lucia the World Bank has engaged numerous projects that seek to address issues that are common around the world, yet locally have unique characteristics based on the way in which Saint Lucians live and work.
Its recent health initiative is not only seen as a down-payment on the battle against diabetes and heart disease — both of which have become more common here — but also as an avenue to see over 100,000 Saint Lucians ultimately covered by health insurance. Certainly there remain inroads to be made in this sphere in a nation of 179,000, but with well over half the population to be covered by the end of the project, it is a strong foundation for the future.
As this new health initiative begins, the World Bank’s involvement in geothermal resource development across the island, that first obtained bank approval in December 2014, is now slated for close in January 2019. Though the $1.16 million budgeted for the project cost is not small fry, it is dwarfed by the $19 million set aside for the Bank’s education development project, and the $68 million allocated to the nation’s vulnerability reduction project.
It is with these cold, hard figures that a clear-cut understanding of the Bank’s project priorities in partnership with Saint Lucians can be seen. Many factors go into the commissioning of a project, yet the substantive investment in health and education, plus the vulnerability reduction project that seeks to combat the impact of climate change, represent cornerstones of building Saint Lucia’s future economic growth in partnership with the Bank.
THE CARIBBEAN CONNECTION
Alongside Saint Lucia, fifteen other Caribbean nations are members of the World Bank Group. Every nation has its own unique trials but, from the Bank’s perspective, it identifies across regional nations the threat that environmental factors like climate change and hurricanes can pose. But it also sees the thriving opportunity for the further development of services, logistics, and the digital and creative sectors. With Saint Lucia a member of the Organisation of Eastern Caribbean States (OECS), it finds itself amidst a group that can recognise in the Bank’s mission a path to spur economic growth that further reduces poverty, and optimises the use of skilled workers to ensure that growth is stable and ongoing.
A BANK FOR THE WHOLE WORLD?
While the World Bank has clearly brought some benefits to Saint Lucia and other Caribbean nations, there are ongoing issues, when it comes to the World Bank’s structure, that could pose a growing challenge to the nations of the Caribbean in the years to come, especially given the current political climate globally.
However one looks at it, while the World Bank has 189 countries among its members, the weight and influence of the organisation heavily favours the most powerful nations on Earth. The USA, Japan, the People’s Republic of China, Germany, and France make up the top five in terms of voting power.
Each of these nations is an economic heavyweight in its own right and, when the mindset is mutual, they can form a powerful bloc that can far outpace the voice of a smaller nation(s) that is a member.
Yet the era of ‘post-Truth’ of Trump and Brexit has seen a thumping return of great power politics to the world stage, where economic heavyweights flirt heavily with full-blown trade wars daily. In this climate, little nations can more easily be squeezed and smothered, and how the World Bank’s power dynamics play out, remains a matter that little nations need to monitor carefully.
THE PATH AHEAD
For many local stakeholders, it is often felt that the ultimate goal for any nation that utilises foreign funding is to develop and grow to a point at which capital and funding from abroad is no longer required.
While this perception is understandable — and certainly there’s a universal aspiration across Saint Lucia to see further development and economic growth — there remains a marked difference between ‘good’ and ‘bad’ debt. Many nations (including the richest and most powerful in the world) continue to utilise ‘good’ debt to fund their future economic growth.
The ongoing challenge for Saint Lucia and other Caribbean nations is to build a productive and strong working relationship with the World Bank that sees not only ongoing funding deliver new growth, but also sees the funding deployed and utilised most effectively.
There is no suggestion that such a task is easy, just that any who seek a stronger economy for Saint Lucia or less World Bank involvement can find common middle ground in the most effective application of World Bank funding going forward into the future.
