Don’t delay necessary reforms

INTER-AMERICAN Development Bank Executive Director Caribbean, Kurt Kisto, has suggested that any drive for engaging in successful Public/ Private Partnerships (PPPs) must be spurred by more than just an economic crisis.

He pointed out that with fiscal space narrowing for many regional governments, it would be tempting to embrace PPPs as a policy mechanism to divest public assets and outsource the supply of public goods and services, or as a mechanism to finance, build and operate new infrastructure works, “all in an attempt to improve the national balance sheet”.

Nevertheless, as he addressed the recent Caribbean Public/Private Partnerships for Sustainable Growth forum at Hilton Barbados, Kisto said that such a focus was not enough.

“While pragmatism dictates that PPPs can possibly fulfil some of this criterion, it should not be seen as an incentive for delaying the implementation of the necessary structural reforms in support of fiscal discipline, and for building a foundation for sustained growth and development,” he reasoned.

Kisto stated that PPP arrangements have become the new “go-to solution” for confronting the challenges of financing, constructing and managing public assets and providing public goods and services, and therefore expressed his hopes that stakeholders would be able to craft models that were Caribbean specific, building on international and regional best practices and local peculiarities.

“Within this spectrum, PPPs can however be categorised based on the extent of public and private sector involvement and the degree of risk allocation.

“As such, I do believe that a good starting point for exploring PPPs in the Caribbean would be to identify and define those key elements that constitutes a good PPP, and explore what are the implications of these elements in designing and structuring PPPs that are relevant to the needs of the Caribbean, especially in the context of Small Island States where there are challenges of capacity, scale, scope and the ingrained socio-cultural relations and dynamics between the actors,” he added. (JMB)