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Title page 1
Contents 9
Foreword 4
Acknowledgements 5
Editorial 7
Abbreviations and acronyms 13
Executive summary 16
Overview 18
1. Main development dynamics and the role of investment 43
Unpacking macroeconomic dynamics and structural features in the Caribbean 45
Advancing social inclusion in the Caribbean: Tackling poverty, inequality and informality 53
Building resilience: Confronting environmental risks and climate vulnerabilities 59
Investment as a driver to unlock development potential in the Caribbean: Main trends and features 66
Key policy messages 79
References 80
Annex 1.A. Methodological annex 87
Annex 1.B. Empirical model to estimate the effect of FDI on the energy mix 88
2. Investment as a driver of sustainable and resilient development 89
Introduction 91
Investing in resilient development 91
Investing in sustainable development: Unlocking the potential of key sectors of opportunity 108
Key policy messages 138
Notes 139
References 140
3. Promoting better financing through enhanced resource mobilisation, innovative instruments and renewed partnerships 156
Introduction 158
Domestic resource mobilisation will be essential to finance the development agenda 158
Strengthening fiscal frameworks can help Caribbean countries cope with high debt levels 173
Private capital can be unlocked as a fundamental source of development financing 177
Development finance institutions are central to supporting resource mobilisation for sustainable development 183
New debt financing mechanisms can mobilise resources to support environmental, social and climate resilience objectives 187
Key policy messages 200
Notes 202
References 202
Figure 1. Climate-related extreme weather events and GHG emissions in the Caribbean 19
Figure 2. Potential GDP per capita growth in the Caribbean, Latin America and advanced economies 20
Figure 3. Central government total public debt as a percentage of GDP, selected Caribbean countries and regional averages, 2014 and 2024 21
Figure 4. Trade basket composition in the Caribbean, 2024 and 2023 22
Figure 5. Monetary poverty in Caribbean countries, latest year available 23
Figure 6. Distribution of the population by household informality and welfare quintile, latest available year 24
Figure 7. Total investment in the Caribbean as a percentage of GDP, 2023 25
Figure 8. Foreign direct investment net inflows as a percentage of GDP, 2024 26
Figure 9. Greenfield FDI capital investment, number of projects and share by sector, 2014-2024 27
Figure 10. PPPs for infrastructure projects in the Caribbean and Latin America, 2010-2024 and Infrascope Index scores, 2023-2024 30
Figure 11. Tax structure in the Caribbean, OECD, Latin America and other SIDS, 2023 33
Figure 12. CIT incentives in selected Caribbean countries, 2025 34
Figure 13. Market capitalisation and stock turnover ratio in the Caribbean, 2024 or latest year available 35
Figure 14. GSSSB bond issuance in international markets in the Caribbean, 2019-2024 37
Figure 15. A generic multi-layered risk management strategy for natural disasters using pre-arranged financing instruments 39
Figure 1.1. Potential GDP per capita growth in the Caribbean, Latin America and advanced economies 45
Figure 1.2. Labour productivity in the Caribbean and Latin America as share of the OECD, 1991-2023 47
Figure 1.3. Central government total public debt as a percentage of GDP, selected Caribbean countries and regional averages, 2014 and 2024 48
Figure 1.4. Trade composition in the Caribbean as a percentage of GDP, 2023 49
Figure 1.5. Merchandise export composition of the Caribbean by economic profile and tech intensity, 2023 50
Figure 1.6. Services trade basket composition in the Caribbean, 2023 and 2024 52
Figure 1.7. Main destinations of Caribbean exports, 2022 or most recent year available 53
Figure 1.8. Monetary poverty in Caribbean countries, latest year available 54
Figure 1.9. Distribution of the population by household informality and welfare quintile, latest available year 56
Figure 1.10. Employment to population rate, by gender, Caribbean countries 57
Figure 1.11. Unemployment rate as a share of labour force, 2014, 2019 and 2024 58
Figure 1.12. Young people not in education, employment or training by gender, in selected Caribbean countries, 2024 59
Figure 1.13. Climate-related extreme weather events by type, selected Caribbean countries (1980-2024) 60
Figure 1.14. Vulnerability index: Caribbean, Latin America and OECD selected countries, 2023 61
Figure 1.15. GHG average emissions by region and sector, 2013 and 2023 62
Figure 1.16. Share of renewables in electricity generation, 2013 and 2023 64
Figure 1.17. Water stress and water use efficiency, 2012 and 2022 65
Figure 1.18. Total investment in the Caribbean as a percentage of GDP, 2023 67
Figure 1.19. Public investment in infrastructure in selected Caribbean countries as a percentage of GDP, 2015-2021 68
Figure 1.20. Private vs. public investment as a share of total investment in the Caribbean, Latin America and OECD, latest year available 70
Figure 1.21. Foreign direct investment net inflows as percentage of GDP, 2024 71
Figure 1.22. Greenfield FDI capital investment, number of projects and share by sector, 2014-2024 72
Figure 1.23. Origin of announced greenfield FDI projects in the Caribbean, 2014-2024 73
Figure 1.24. Number of jobs created by greenfield FDI in the Caribbean, 2014-2024 74
Figure 1.25. Relative difference between foreign and domestic firms' wages and shares of permanent employment, latest year available 75
Figure 1.26. Greenfield FDI in digital sectors in the Caribbean as share of total FDI, 2014-2024 76
Figure 1.27. Greenfield FDI in merchandise producing sectors, 2014-2024 77
Figure 1.28. Greenfield FDI in renewable energy: Capital investment, number of projects and share of total FDI by country, 2014-2024 78
Figure 1.29. FDI impact on renewable energy supply and the energy matrix in LAC 78
Figure 2.1. Infrastructure Vulnerability Index in the Caribbean and Latin America, 2023 92
Figure 2.2. PPPs for infrastructure projects in the Caribbean as a percentage of GDP, 2010-2024 97
Figure 2.3. Infrascope Index: Aggregate scores by category for Latin American and Caribbean economies, 2023-2024 98
Figure 2.4. Perception of government effectiveness in the Caribbean, 2023 102
Figure 2.5. Statistical Performance Indicator (SPI) overall score by region, 2023 103
Figure 2.6. Main regional and sub-regional organisations with Caribbean membership 106
Figure 2.7. Value of ocean goods and services exports per capita by development status groups, 2023 109
Figure 2.8. Total production and consumption of fish and seafood in the Caribbean, 2022 112
Figure 2.9. Share of aquaculture in total fish production, 1960-2022 113
Figure 2.10. Marine and terrestrial protected areas, 2014 and 2024 116
Figure 2.11. Creative services exports as percentage of total trade in services, 2024 119
Figure 2.12. The energy matrix in the Caribbean, 2024 121
Figure 2.13. Liner Shipping Connectivity Index, 2021 124
Figure 2.14. Progress towards productive and sustainable agriculture in the Caribbean, 2023 127
Figure 2.15. Composition of waste generation per capita in the Caribbean, 2024 129
Figure 2.16. GDP and productivity gains in Caribbean countries from closing digital infrastructure gaps with OECD Member economies... 132
Figure 2.17. Estimated broadband gaps relative to the OECD average 132
Figure 2.18. Estimated gaps relative to the OECD average, 2024 133
Figure 2.19. IDB Broadband Development Index: Scores and rankings of lead country and Caribbean countries, 2023 134
Figure 2.20. Digital affordability gap: Cost of data-only mobile-broadband basket and fixed-broadband basket, 2023 (percentage of GDP per capita) 135
Figure 2.21. Government AI Readiness Index (GAIRA), 2024, by pillar 136
Figure 2.22. Presence of computer science education in school curricula, Caribbean countries, 2024 137
Figure 3.1. Tax structure in the Caribbean, OECD, Latin America and other SIDS, 2023 159
Figure 3.2. Environmentally-related tax revenues by main tax base in Caribbean countries, 2023 161
Figure 3.3. CIT incentives in selected Caribbean countries, 2025 163
Figure 3.4. Tax officials' perceptions of the role of the tax administration, by region, 2024 167
Figure 3.5. Compliance issues facing tax administrations in Caribbean countries, 2024 168
Figure 3.6. Evaluation of tax administrations' key functions in Caribbean countries, 2024 169
Figure 3.7. Central government non-tax revenues in Caribbean countries, 2023 171
Figure 3.8. Debt service-to-tax revenues ratio, 2013 and 2023 173
Figure 3.9. External public debt: Share and composition by creditor in Caribbean countries 174
Figure 3.10. External public debt service in Caribbean countries, 2012-2023 175
Figure 3.11. Small states: Change in government debt around large natural disasters 177
Figure 3.12. Market capitalisation and stock turnover ratio in the Caribbean, 2024 or latest year available 178
Figure 3.13. Main external financial flows to the Caribbean, 2000-2024 179
Figure 3.14. Remittances and emigration in the Caribbean, 2024 181
Figure 3.15. Structure of a global credit loan by the IDB to the CDB 187
Figure 3.16. GSSSB bond issuance in international markets in the Caribbean, 2019-2024 189
Figure 3.17. A generic multi-layered risk management strategy for natural disasters using pre-arranged financing instruments 197
Figure 3.18. Jamaica's national natural disaster risk financing policy (by frequency and severity of natural disaster) 198
Figure 3.19. Sustainable finance framework development in the Caribbean, 2018-October 2025 200
Boxes 12
Box 1.1. Suriname: Poverty, human capital and skills for a sustained recovery 55
Box 1.2. Hurricane Melissa: Devastating impact in Jamaica (October 2025) 60
Box 1.3. Key policy messages 79
Box 2.1. Examples, of grey, nature-based and hybrid infrastructure solutions 93
Box 2.2. The IDB ONE Caribbean Project Preparation Coordination Mechanism (PPCM): Strengthening the pipeline of investment-ready projects 99
Box 2.3. IDB's resilient public-private partnership toolkit 101
Box 2.4. Strengthening Caribbean statistical systems: A tailored, sustainable approach 103
Box 2.5. Iceland Ocean Cluster 112
Box 2.6. Transforming sargassum into a development asset in the Caribbean 114
Box 2.7. Mangrove plantation in Viet Nam 115
Box 2.8. Impacts of nature-based tourism in Fiji, Madagascar and Lao PDR 118
Box 2.9. Creative industries in Mauritius: Dedicated incentives and programmes to support local entrepreneurship 120
Box 2.10. Extending electricity access in rural areas in Vanuatu using renewables 123
Box 2.11. Renewable energy for sustainable marine transport in Pacific SIDS 125
Box 2.12. An example of resilient agriculture in Pacific SIDS 128
Box 2.13. International circular initiatives to reduce food waste 131
Box 2.14. Key policy messages 139
Box 3.1. Caribbean Tax Outreach Programme 166
Box 3.2. Scaling development finance in the Caribbean: The Caribbean Development Bank's efforts to unlock capital for growth and resilience 185
Box 3.3. Innovative debt transactions for nature conservation and climate resilience in Barbados 190
Box 3.4. Carbon credits in Guyana: Using forests to generate revenue in exchange for protection and conservation 192
Box 3.5. The Contingent Credit Facility of the Inter-American Development Bank 195
Box 3.6. Key policy messages 200
Infographics 11
Infographic 1.1. The Caribbean faces a complex set of environmental and socio-economic challenges 44
Infographic 2.1. Investment should drive greater resilience and sustainability 90
Infographic 3.1. An ambitious regional investment agenda requires mobilising multiple sources of financing 157
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