The two bodies reviewed progress made towards their new initiative, the Compete Caribbean Programme, jointly designed by IDB, DFID and the Canadian International Development Agency (CIDA), which is set to be launched to benefit 15 CARIFORUM countries from March 2010.

The Compete Caribbean program will establish an Enterprise Innovation Challenge Fund offering matching grants to private sector businesses - clusters, and small and medium-sized enterprises – to help them develop innovative products and services that are able to compete in regional and global markets.

Compete Caribbean will also support business climate reforms - to create a sound enabling environment for private sector growth – by supporting regulatory reform and public-private dialogue, within a comprehensive private sector development framework.

DFID’s Director for Middle East, Caribbean, Asia (North, Central and East) and the British Overseas Territories, Sue Wardell, explained, “innovation in the private sector is crucial for the Caribbean to recover from the economic downturn and move their economies on to a high growth trajectory.”

“The Enterprise Innovation Challenge Fund, in particular, can provide a launching pad for new business ideas which expand the regional export base and help Caribbean companies to access international markets."

IDB program Team Leader, Jose Jorge Saavedra, added:

“Consultations with over 120 decision makers from the public and private sector, as well as regional institutions, confirmed the need for business climate reforms to promote private sector development as well as firm-level technical assistance to increase productivity, innovation and access to global markets.”

“The Compete Caribbean program responds to these demands and will support governments and businesses in generating employment and economic growth.”

The two organizations also reviewed progress made under their Aid for Trade initiative. DFID provided the first contribution to an IDB launched multidonor Aid for Trade Strategic Fund in December 2009, with GBP910,000 (around USD1.48m). The fund is designed to help the public and private sectors in Latin America and the Caribbean to integrate into the global economy.

“The Aid for Trade fund plays a key role in enhancing Caribbean countries capacity to take advantage of trade liberalization opportunities by helping them to address important constraints which impede them from benefiting of market access,” explained IDB Aid for Trade Coordinator, Carolyn Robert. “This is particularly relevant for small countries in the context of current trade liberalization efforts undertaken by the Caribbean with major trading partners and of declining trade volumes as a result of the global economic crisis.”

“The fund will support these countries by channeling grants to develop trade adjustment assistance programs, enhance trade facilitation, and improve institutional capacity to design and implement trade policy, including recently concluded trade agreements, like the Economic Partnership Agreement signed between CARIFORUM and the European Union,” added Pamela Coke Hamilton, IDB Trade Specialist in Barbados. “As the fund represents an important tool in addressing priority issues in the Caribbean regional trade agenda, DFID and the IDB are working closely with other regional organizations, governments and the private sector to set priorities and coordinate efforts.”

A high level regional review with government and private sector participants from all countries of the region was held last year in Jamaica in order to monitor progress in the implementation of the Aid for Trade initiative to support mainstreaming trade into national and regional development agendas, to foster regional approaches and to promote donor coordination.

The Aid for Trade fund covers activities under four areas: (i) trade policy, negotiation and implementation agreements; (ii) trade facilitation and private sector development; (iii) initiatives that help connect markets that are complimentary to physical infrastructure, such as the harmonization of regulatory frameworks and the reduction of transit costs; and (iv) trade-related adjustment activities to help countries adapt to trade liberalization.