Guyana Electrical Consultants & Associates

Stabroek News-June 21st 2007

With the right reforms and investments, Guyana, Jamaica and Barbados could substitute at least ten per cent of their current gasoline consumption with domestic ethanol fuel, President of the Inter-American Development Bank (IDB), Luis Moreno has said.

Quoting from a study the IDB financed in collaboration with Caricom at the opening of the three-day Conference of the Caribbean at the World Bank on Tuesday, he said that if they adopt the latest technology these three countries could also co-generate a total of 100 megawatts of electricity by burning sugarcane bagasse. The study, on expanding bio-fuel opportunities in the three Caribbean countries and which was conducted earlier this year, showed the potential that exists.

Moreno noted that the IDB has an active programme, which grants technical assistance to help member governments determine the feasibility of renewable energy in the production of ethanol, bio-diesel, wind, geo-thermal energy.

In addition, he announced that the IDB private sector department was also preparing to launch a green energy programme that would provide at least US$300 million in loans for projects in energy efficiency and renewable energy. The programme is specially designed to favour small developing countries.

He said the issue of energy was one of three priority areas that the IDB considered challenges for the Caribbean. The other two he described as competitiveness and “initiative opportunities for the majority.”

Noting that with the exception of Trinidad and Tobago energy has become a critical issue for the Caribbean with the cost of their dependency soaring, he cited Jamaica’s energy cost as growing by 41% in 2005 and 30% in 2006. It is now projected to pass US$2 billion this year. This is almost as much as the total amount of the country’s exports.

“Now more than ever, the Caribbean needs a bold energy strategy that combined energy conservation and efficiency with investments in renewable resources,” Moreno said.

However, he said, the good news was that the Caribbean had significant potential in bio-fuels and wind-power and there were also savings to be garnered from serious conservation measures.

Meanwhile, Moreno said competitiveness was another priority area, which has been showing some showing enterprise. Last year a large amount of advanced technology products were assembled on the islands of St Kitts and Nevis. The quality of the products and the work force placed it in contention with fierce competition from Mexico and China. “St Kitts has leverage; its proximity to the US and the high quality of its work force to compete effectively in this dynamic market,” Moreno said.

Noting the increase in businesses with call centres and the out-sourcing exports of the business processes, he said market analysts have estimated that the number of people employed in the Caribbean call centres has almost doubled between 2006 and 2007 to nearly 40,00 agents. “These so-called near-shore industries barely existed a few years ago and now they are growing at 40% a year,” he said.

Tourism has reinvented itself in innovative ways through high-end activities such as health and wellness spas, specialized eco-tourism, full-service retirement communities and medical education generating new areas for economic growth and job creation, he said. But he noted that the tourism industry now faced a threat in the form of more natural disasters and global warming.

To remain competitive, he stressed the need for the industry to do a better job by anticipating the risks and adopting mitigation plans and to this end, he said the IDB has created a disaster prevention fund to help member countries. Jamaica is at present using US$800,000 from the fund to strengthen disaster risk management in coastal communities.

In terms of tackling social problems, he said the IDB was making a concerted effort to support an innovative approach at the base of the socio-economic pyramid through an initiative called ‘Opportunities for the Majority’.

He noted that 70% of the Caribbean population’s purchasing power was below US$300 per month and this translates to 11 million people experiencing sub-standard social service, inadequate housing and limited access to credit.

Many of these citizens were not passively awaiting assistance since they were smart consumers and resourceful entrepreneurs whose collective purchasing powers exceed US$8.7 billion per year.

Noting the example of cell phone giant Digicel in Haiti he said, the IDB was “convinced that companies capable of delivering quality products and services at prices that are accessible to the population are crucial allies of government efforts to eradicate poverty.” (Digicel signed up 1.4 million Haitians in one year by offering payment plans that meant even the poorest person could have a cell phone.)

He noted also that housing could also benefit from public and private partnerships and gave the example in which the IDB was piloting a project in Jamaica that would bring together private hotel chains, construction firms and building societies to build affordable houses for entry-level hotel employees. The IDB resources would provide loans and partial credit guarantees to enable construction for long-term mortgage financing. Local builders would carry out the construction for local jobs.

The IDB through its Multilateral Investment Fund has a US$2 million grant programme to support capacity building of Caribbean micro-finance institutions.

And in terms of the IDB’s commitment to regional trading and to enhance trade and integration in Latin America and the Caribbean, he said that together with the World Trade Organisation, the IDB was organising a high-level dialogue in Lima, Peru on an ‘aid for trade’ programme. The meeting will feature a session dedicated to the Caribbean on ‘aid for trade’.