REVIEW OF AID ASSISTANCE TO THE CARIBBEAN DEVELOPMENT BANK

Evaluation covers the period 6/76-9/79 and was based upon an audit review of records and interviews with project personnel. The project has not been a success. The Caribbean Development Bank (CDB) has executed only five agreements, totalling $412,000 (10%) of targeted funds. The extension of production credit has been limited by the following restrictions: (1) Amortization periods averaging under 18 months -- which are too brief, especially for countries growing bananas and sugar cane; (2) a maximum farm size of 25 acres or under which is unrealistic in countries such as Belize, where the average farm size is over 30 acres; (3) a $2,500 maximum which forced eligible borrowers needing greater sums to go elsewhere, and a $400 minimum which excluded the poorest farmers; (4) interest rates equivalent to commercial rates which excluded many farmers and barred St. Vincent from participating in the program; and (5) the exclusion of such important segments of the population as small fishermen and cotton farmers. No marketing disbursements were made. Local marketing boards are reluctant to allow a regional institution to exercise local functions which they themselves control. Because participating countries do not think regional organizations should provide inputs and because CDB has not allocated funds, the manner of delivering inputs is still being discussed. Seeds, fertilizers, and chemicals were not available at support prices in many areas. Feeder road subprojects were approved only in St. Vincent and Antigua. The requirement that the roads be properly maintained is unrealistic due to the area"s scarcity of resources. In light of the region"s varied economic, geographical, and political elements, the project was inappropriately designed, and should be modified to ensure that individual country needs are considered, that realistic targets are established, and that baseline data are collected. Six other recommendations, aimed at improving A.I.D."s management of the project, are outlined.