Statement by José Manuel Salazar-Xirinachs

Monday December 8, 2025

• Honourable Kennedy Swaratsingh, Minister of Planning, Economic Affairs and Development of Trinidad and Tobago, and Chair of the Caribbean Development and Cooperation Committee (CDCC).
• Distinguished Delegates of ECLAC participating as a member of the CDCC
• Distinguished Delegates of ECLAC participating as observers of the CDCC
• Distinguished representatives from the Diplomatic Corp accredited in Trinidad and Tobago,
• Colleagues from UN System, international and regional organizations,
• Distinguished guests, Ladies and gentlemen,

A pleasant good morning to all and welcome to this Seminar for the twenty-second meeting of the Monitoring Committee of the Caribbean Development and Cooperation Committee.

For me it is a great pleasure and honour to be back in Trinidad and Tobago and to participate in this important Seminar.

This year’s theme focuses on how the Caribbean can unlock its development potential by enhancing growth and development through South-South Cooperation.

This is as challenging as it is timely. I know it is clichéd, but it is apt to remark that the Caribbean is at a developmental crossroads. The decisions made and strategies employed will determine whether the sub-region escapes the middle-income trap that has bedeviled many economies.

Indeed, just five years to 2030, the Sustainable Development Goals are far off track, with only 17% of targets expected to be met and another one-third either stalling or regressing. In fact, the Caribbean is one of the regions that is regressing in key areas such as education, inequality and climate change and natural resources.

Added to this, the international environment is could not be more challenging. This has been an extraordinary turning point for the world economy, for geoeconomics and geopolitics. This is not globalization as we knew it. This is a change to a new world of unilateral measures by some of the major powers, a new kind of interaction quite appropriately described by the term “instrumentalised interdependence”, the title of the cover of the recent issue of the Journal of Foreign Affairs.

As we all know, a rules-based world trade and investment system is to the benefit of all the economies, large and small, but in particular it is essential for the small economies that do not have the power and can have much to loose in a world of raw power and unilateral actions. But this seems to be the new reality, and it is a major change from the kind of world order of the last 80 years. So we have to rethink the challenges of growth and development in light of this new reality to manage global interdependence. As we have been saying in ECLAC, and as indeed has been saying the Secretary General of the UN, countries should continue to strive for a solid multilateral systems, based on rules, and solid multilateral institutions that help countries coordinate and collaborate on the many development, environmental, security, peace and other challenges facing the world today.

On the domestic front, the Caribbean continues to battle several headwinds that keep pushing it from its desired growth path and aspirations.

First, weak productivity growth, combined with limited innovation and technological upgrading, has kept economic growth below its potential for a long time. The reality is that growth in the Caribbean has been constrained by insufficient investment in R&D, frontier technologies and modern institutions. This has been aggravated by the mismatch between the skills and competencies required for a modern workforce and the training offered in universities and technical learning institutions.

Weak growth, combined with high public debt and debt servicing costs, limits the subregion’s development prospects. Public debt has declined since the pandemic, but it remains uncomfortably high. The Caribbean countries maintain on average debt to GDP ratios which are 20 points higher that the average for Latin American countries.

This leads to a situation in which debt servicing costs, average 30% of government revenue, a situation that limits the ability of governments to invest in growth-propelling infrastructure, social policies, and resilience, and to strengthen public administration and institutions to improve state capacity and effectiveness.  At ECLAC we have called this predicament “development distress” as opposed to the usual term of “debt distress”.

Given its small size, the Caribbean must leverage the support of partners in the South to make the case for increased access to concessional financing for highly indebted, vulnerable middle-income SIDS, and for the scaling up of climate finance for SIDS, which have contributed little to the climate crisis but are most affected by it. And, as I said, it is also important to work together with all countries, in the Global South and also North, for improved rules-based trade arrangements. It is also crucial to diversify trade partners and economic partnerships.

So all these challenges make it more urgent for the Caribbean to leverage South-South cooperation to boost long-term growth.

The region must improve its strategies for attracting appropriate FDI from the global South to modernise its traditional sectors, including agriculture, tourism, and niche manufacturing.

But more than this, the Caribbean must do this by having a clear vision of what are its assets and develop clear strategies to leverage these assets to seize the opportunities of the new redefined globalization. This is the core, in our view, to unlock development potential.

This includes actively seeking out investment in the growth poles of the future. These include renewable energy and Greentech, telemedicine and digital health services, AI-enabled solutions across the economy and society, including in disaster risk reduction, education and learning and design systems, Fintech and E-commerce, among other areas. And of course one of the great assets of the Caribbean is the the ocean, the blue economy.

Nevertheless, doing this and moving up the value chains would require both qualitative and quantitative changes in investment and in productive development strategies.

There must be a strong focus on value addition in traditional industries, as exemplified by the Dominican Republic, which has developed world-class niches in medical device assembly and pharmaceuticals and St. Lucia, which has innovated in producing biofertilizer from sargassum.

At ECLAC, we have championed productive development policies aimed at transitioning our economies from the low capacity to grow trap to sustained high growth by boosting productivity and driving  structural change.  These policies are key to reduce Caribbean SIDS vulnerabilities from external shocks by creating more stable demand for their exports and build resilience.

Further, ECLAC has used its convening power to help frame debates on financing for development, digital transformation, and data for development, among other areas. This is critical for centering the particular concerns of Caribbean SIDS in global processes.

Dear Delegates,

Climate change poses an existential threat to the Caribbean and aggravates the growth and debt challenges. The sub-region is the second most disaster-prone region in the world, after Asia. Further, the hurricane season in the Caribbean has become more active in recent years, with storms intensifying more rapidly, partly due to warmer sea surface temperatures driven by climate change. This is reflected in the 224% impact on Dominica’s GDP in 2017 from Hurricane Maria, and in the significant effects in Jamaica from Hurricane Melissa over a month ago.

The sub-region has acknowledged the climate threat. Strong measures have been taken to reduce disaster risk and build resilience. CDEMA’s comprehensive and integrated approach to disaster management has facilitated risk reduction in the region.

In addition, countries such as Grenada, Barbados, and the Bahamas have included hurricane clauses in their debt contracts to allow temporary suspensions of debt payments to aid recovery and reconstruction. Indeed, Grenada was the first country to benefit from a debt pause clause after Hurricane Beryl in 2024, which led to the suspension of $12 million in interest payments.  

I invite other countries in the sub-region to adopt these clauses. South-South cooperation is essential for sharing lessons and best practices on climate adaptation and mitigation strategies that have worked well in other regions. The Brazil-Caribbean Water Management Partnership, for instance, has helped countries such as Barbados and Dominica in upgrading water harvesting, groundwater conservation, and dealing with droughts and water scarcity.

Another key topic is digital transformation, and now the enormous potential, but also challenges of AI.  Digital transformation and AI can be major drivers of development. It is a critical process that entails integrating and mainstreaming digital and AI tools and processes into business operations, household activities, and government operations. More than just technology and methods, it involves fundamental shifts in organisational culture and outlook.

Digital transformation and AI offers Caribbean SIDS a window to overcome some of the limitations imposed by size and structural vulnerabilities. It is essential to help the Caribbean move up the value chain, thereby reducing reliance on basic tourism and crude commodities. Digital-enabled activities can help promote economic diversification and scale up key activities. For example,

• digital-enabled tourism based on virtual marketing,
• AI-based virtual tours and pricing and e-booking platforms can help to boost efficiency and lower the cost of operations in the sector, thereby increasing profit margins.
• The creative economy is an important area of comparative advantage for the Caribbean. Expanding the use of digital media, animation, music technologies, and indigenous design systems could help upgrade and increase value added in the sector. Importantly, there have been bright sparks, with apps produced in the Caribbean doubling in the last year.

Here again, South-South cooperation can help the Caribbean leapfrog digital transformation for development. The Latin American and Caribbean Digital Agenda 2026 already provides a platform for catalysing digital integration in the region.

This should be further leveraged to boost investment from Latin America in digital industries, promote workforce training and capability building and to enhance digital governance in the Caribbean. Nevertheless, to reap the full benefits of digital transformation, our sub-region will need to modernize its legislative, governance and implementation frameworks. This would require forward-looking legislation, regulations, and monitoring and oversight systems for e-commerce, AI, digital payments, and fintech systems. South-South cooperation can draw on lessons from what has worked in countries such as the China-CELAC-FAO Digital Agriculture Platform, which provides digital literacy training to rural farmers in Latin America and the Caribbean, helping them to optimise the use of inputs.

Notably, this 22^nd CDCC MonCom comes on the heels of the Regional Conference on South-South Cooperation in Latin America and the Caribbean held in Santiago in June this year, which adopted a landmark Second Resolution on South-South Cooperation.

The Resolution underscored the importance of South-South and triangular cooperation in bolstering the productive capacities of developing countries, increasing trade and financial flows and upgrading technological capabilities, while strengthening social inclusion and reducing inequalities. Crucially, the Resolution reaffirms the role of ECLAC as a convening intergovernmental platform for policy advice and dialogue, and as a provider of technical cooperation and capacity-building support, which Caribbean countries continue to benefit from.

Dear Delegates, I assure you that ECLAC will continue to facilitate interregional partnerships between Latin America and the Caribbean and provide relevant support to Caribbean SIDS.

Friends,

It is not likely that overall development progress can be sustained in the Caribbean without social transformation. Indeed, the renowned Trinidadian intellectual CLR James reminded us that in the Caribbean, economics, politics and society are three in one and one in three.

Social transformation must address the education challenge by providing pathways for better investment in the skills and competencies of the workforce to match the jobs of the future. Further, the sub-region must invest in the health and well-being of its citizens to raise their productivity. This is also critical to reducing high levels of crime and deviance in our societies.

South-South cooperation can help to accelerate social transformation in the Caribbean.  For instance, Trinidad and Tobago’s HALT digital health project has rolled out telemedicine to remote communities using robots with assistance from India and lessons learned from Rwanda.

Also, under the auspices of UNESCO, Caribbean educators have benefited from the Global South Knowledge networks on education reform, literacy and technical training. Collaboration on TVET with Asia, Africa and Latin America has been instrumental in matching skills training with the needs of local industries. This is key to bolstering worker productivity and income.

Indeed, in October of this year, ECLAC presented a far-reaching approach for strengthening what we call the TOPP capacities of institutions, that is the technical, operational, political and prospective capacities. This is a new analytical and operational framework for advancing productive, inclusive and sustainable development in Latin America and the Caribbean. The TOPP framework recognizes that that the third of three traps in which we see countries in region caught is the trap of limited institutional capacities and ineffective governance. The other two, by the way are:  a trap of low capacity to grow and transform, and a high inequality, slow social mobility and weak social cohesion trap.

To overcome these traps we focus on the how question, how to manage the indispensable transformations in our development models.  And we are systematically search for answers in the related blocks of issues: the governance arrangements, the TOPP capacities of institutions, the spaces for social dialogue, and the classic but very important issue of the political economy of reforms and transformations, that is, how to create coalitions for positive change and innovation which are stronger than the coalitions that resist such changes.

Delegates,

We are acutely aware that the Caribbean is severely challenged in financing its development. Owing to its middle and high-income status, the subregion has been graduated from global concessional financing. This is unfortunate, as it fails to take into account the issues of small size and extreme vulnerability. This is why ECLAC has long championed the multidimensional vulnerability index (MVI) as a more representative framework for accessing concessional finance.

Fortunately, the MVI was adopted by the UN General Assembly last year. We hope that this will allow the sub-region to access adequate concessional funding to advance its development. Nevertheless, other forms of funding, including innovative financing, will be required to drive structural change, productive development, digital transformation and climate change adaptation.

In a decisive partnership, the African Export-Import Bank (Afreximbank) has allocated $3 billion for development projects in energy, education, tourism and other sectors in the Caribbean. This opens a window for increased trade with Africa and will help the Caribbean to benefit from the demographic and potential growth dividend in Africa.

South-South cooperation can help bridge the Caribbean’s financing gap by working on several lines:

1. First, providing non-traditional sources of development funding on more favourable terms, including concessional loans and grants as have been provided by countries such as China, India and Brazil.
2. Second, by providing countercyclical funding that helps to smooth recessions, such as India’s EXIM Bank’s lines of credit for agriculture and renewable energy and China’s concessional financing for infrastructure, including roads, ports and housing.

• Third, climate and disaster risk financing, which is lower cost and easier to access, such as the planned BRICS joint climate finance framework, and

1. Fourth, debt for climate and nature swaps. Belize, for example, has reduced its debt by 12% of GDP and unlocked $180 million in sustainable financing through its debt-for-marine-conservation swap.

Delegates,

Visionary, and effective policies require high-quality data and information. It is therefore incumbent that the Caribbean make a calculated investment in modernizing its data and information systems. Emphasis will need to be placed on upgrading data and information architectures, staff training and continuous learning, investing in data analytics and high-frequency data for more real-time analysis, and digitizing data systems. Given its constraints, the Caribbean must seek out partnerships with other countries in the South for technical assistance, experience sharing and funding to modernize its data systems.

Delegates,

All in all, the Caribbean is facing a sobering time as it continues to invest in developing its economy and society. The sub-region faces a very challenging  international environment marked by beggar-thy-neighbour policies that fail to acknowledge the vulnerabilities of SIDS.

At home, high debt, weak economic growth and insufficient decent jobs are fraying the social fabric and solidarity, leading to higher crime and deviance. Nevertheless, the region has its own success stories in disaster risk management, niche products, sports and culture, among other areas that could inform its broader development path. South-South cooperation must be fully leveraged to nurture these bright sparks, to build and leverage the many assets of this region and foster new areas for growth and innovation that could advance sustainable development in the Caribbean.

As we begin this seminar, I invite all of us to approach today’s dialogue with openness, ambition, and a shared commitment to building a stronger Caribbean. The ideas we exchange here have the power to shape policies, inspire collaboration, and unlock solutions that none of us could achieve alone.

Let this be a space for creativity, for partnership, and for the courage to imagine what is possible. Together, we can turn today’s conversation into tomorrow’s transformation.

Thank you, and I look forward to the rich exchanges ahead.