As negotiators quibbled during the opening week of COP31 in Antalya, Türkiye last week, Daniel Best spent most of his time at the Caricom pavilion on the sidelines of the main event. It is his second Conference of Parties as president of the Caribbean Development Bank (CDB). In a meeting room in the pavilion, Best held bilateral meetings, informal meetings and featured in several panel discussions organised by the regional body.
At a COP where climate finance is becoming a bitter and divisive dispute, Best is working on a narrative that the Caribbean cannot afford to wait for international climate financing, and the CDB is trying to position itself as a catalyst for investment, resilience and economic transformation. It is both necessary and urgent.
The Caribbean has been hit by five category five hurricanes in the last eight years. For those living on islands along the hurricane belt, it is a worrying new norm.
Best said the frequency of extreme weather events had fundamentally changed the development challenges facing Caribbean countries, making resilience a central consideration for the region’s future.
He told the Business Guardian, “I don’t think I have sufficient mastery of language to articulate the scale of this moment that we’re in. What would have been typically a one-in-100-year event has happened almost every other year in the Caribbean. So resilience is not just another term for us at the Caribbean Development Bank. It is not a programmatic feature of what we’re doing. It undergirds our very strategic plan 2026 to 2035.”
While COP after COP, small island states in the Caribbean and the Pacific battle Global North countries for climate financing, Best is adamant the region isn’t looking for handouts. He argued that the region had repeatedly demonstrated its capacity to develop innovative solutions to its own challenges.
“Caribbean people have a history of innovating. It’s not just something we do, it’s who we are. When Hurricane Ivan decimated Grenada and other countries within the Caribbean, what did we do? We created the world’s first parametric insurance facility. That is what we did. We didn’t sit around and wait for the world to come and save us. We did that.
“When correspondent banks decided to reduce their relationships with banks in the region, what did we at the Caribbean Development Bank do? We created a trade financing guarantee to provide risk cover for confirming banks doing business with issuing banks in the Caribbean, thereby making financing for entrepreneurs and those engaged in trade in the Caribbean more easily accessible,” said Best.
Perhaps the biggest challenge Best has had to confront in his 21 months in the job has been how Caribbean countries are penalised by an international financial system that place much emphasis on their exposure to natural hazards while failing to adequately account for the measures they were taking to reduce those risks.
When asked about this, he said, “We have political stability in the Caribbean. We have a highly educated and employable populace. The risks that we face are largely not of our doing. Asking a country to finance rebuilding from a disaster that it did not create, using financing that is at a high premium, is not a market operating efficiently. It is a global system designed in 1944 for a world that no longer exists. The challenge is that the global financing architecture is better at facing that hazard and is better at facing that risk than it is at facing all the mitigating factors that we are putting in place.”
With Caribbean governments facing competing demands on their limited public resources, Best said development institutions such as the CDB had an important role to play in reducing the risks associated with projects and making them attractive to private investors.
He added, “It is the matter of access. What do private entities want? They want, as far as possible, minimal risk. That is a two-way street. We’ve heard many of our leaders say, and I agree with them, there will always be risk. You are being paid a premium because of the risk. However, the role that multilaterals such as the CDB needs to play in this is, whether it is through first-loss guarantees or grant-based financing or concessional public financing, to move projects from that concept stage to a stage of certainty, a stage of investability that creates the enabling environment for private actors to come in.”
He pointed to the CDB’s support for geothermal exploration in Nevis as an example of how the Bank was using innovative financing arrangements to reduce investment risks without necessarily adding to the debt burden of Caribbean governments. Additionally, Best said the CDB had developed a financing instrument that would allow it to absorb some of the early exploration risks while protecting countries from additional debt if the resource was not commercially viable.
He warned, however, that government cannot do it alone, and the need attract private capital was widely recognised by Caribbean governments, which were struggling to meet development demands while balancing significant social and economic pressures.
Best stated, “Every leader that I have spoken to within the Caribbean is fully aware that private capital is needed. We don’t have the fiscal space to do the full lifting that is needed at this time to move our countries forward. Our governments have nurses and doctors, have teachers, have children to keep sending support. There are dramatically competing priorities at a time when we’re seeing commodity prices consistently raising, at a time when geopolitical uncertainty is perhaps at its highest since the pandemic.
Best has brought back some level of stability within the CDB. Under his predecessor, the institution was embroiled in a major leadership crisis surrounding its sixth president, Dr Hyginus Leon, who was sent on administrative leave pending an internal administrative investigation. The bank refused to publicly disclose the specific reasons for his suspension.
When asked about his leadership of the regional organisation, Best said, “I am not one to look in the mirror or to look and see my reflection in shiny trophies and pat myself on the back. I have a great team around me who supports the vision of rebirth of the Caribbean Development Bank. I have a board that has approved our strategic ten-year plan, which will guide the decade of decision.”
But Best believes the Bank’s success cannot be measured by institutional stability or a new strategic plan alone. Its real test, he said, will be whether it can deliver for Caribbean people facing the consequences of climate change and economies struggling to finance their development. For him, the work is only beginning.
