THEIR IMPACT ON ECONOMIC DEVELOPMENT
APRIL 3, 2011
An economy’s financial markets are critical to its overall growth and development. Banking systems and stock markets enhance growth and are considered the main factor in poverty reduction. Strong financial systems provide reliable and accessible information that lowers transaction costs, which in turn bolsters resource allocation and economic growth. Development Banks are one such member of the financial institutions that can affect growth and development of a country and the regions within its sphere of influence if it provides the accessibility, stability, and efficiency in financial resource allocation to deficit spending unit who can use it for growth and development.
The first Development Bank was found in Belgium in 1822 for the purpose of financing and promoting industry. It was a joint stock bank which nursed funds through the sale of shares and bonds in order to finance commercial and industrial enterprises. This new technique of banking got impetus only in 1852 when ‘Credit Mobilize of France’ was set up. It mobilized resources through the sale of bonds and promissory notes and made long-term investments particularly in public utility undertakings, railways, insurance companies and banks. It set a model for similar investment banks established in Germany, Austria, Belgium, Netherlands, Italy, Spain and Switzerland. Throughout the 19th century, the Credit Mobilize provided a great appeal to all countries which wanted to develop industries on a fast pace. In 1902, Industrial Bank of Japan was established for the purpose of financing her industrial development.
Regional Development Bank of the Caribbean
The Caribbean Development Bank is the regional Financial Development Institution (FDI) which was established by an Agreement signed in Kingston, Jamaica, on 18th October, 1969, and entered into force on 26th January, 1970. The permanent Headquarters of CDB is located at Wildey, St. Michael, Barbados.
Why was CDB established?
After the demise of the West Indies Federation in 1962 and the subsequent independence of Jamaica (August 6) and Trinidad and Tobago (August 31) that year efforts were made by the United Kingdom Government to form a Federation of the Little Eight for these Territories and, following an East Caribbean Conference held in London in May 1962, several surveys were initiated and Commissions established to prepare for the Federation. However it wasn’t until after the November 1966 Conference the countries concerned requested the United Nations Development Programme (UNDP) to appoint a team of experts to undertake a study of the possibility of establishing a financial institution for regional development in the Caribbean which might be used as a method of financing projects of particular interest to the smaller areas, as well as projects which might benefit the Region as a whole. (Caribbean Association of Memphis)
Members of Caribbean Development Bank
The following States and Territories are founding members of CDB, i.e. those States and Territories which signed the Agreement establishing the Bank in 1969. The Regional Members were Antigua and Barbuda, Bahamas, Barbados, Belize, British Virgin Islands, Cayman Islands, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts/Nevis/Anguilla, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago and Turks and Caicos Islands. The non-Regional Members were Canada and the United Kingdom.
Venezuela and Colombia were admitted as Regional Members, in April 1973 and in November 1974, respectively, and Anguilla (in its own right) and Mexico in May 1982. Haiti was formally admitted on January 19, 2007. Italy, Germany and the People’s Republic of China became non-Regional Members in November 1988, October 1989 and January 1998, respectively, thereby bringing non-regional membership to five, and total...