NASSAU, BAHAMAS — The Bahamas will advance in creating a social and inclusive blue economy with a $200 million policy-based guarantee (PBG) approved by the Inter-American Development Bank (IDB).
The operation will finance a project to promote a healthier and more productive ocean in The Bahamas.
It includes reforms and actions to foster business recovery for micro, small and medium-sized enterprises (MSMEs) in the blue economy and prospective investment projects suitable for blue bond financing.
The blue economy is a coordinated approach to climate change and climate risk solutions, environmental sustainability and economic growth by strengthening oceanic ecosystems and optimizing the use of marine resources.
The initiative also includes reforms geared at promoting digitalization in the blue economy, strengthening the resilience of the blue economy through improved climate risk management in coastal and offshore areas, promoting better management of marine resources and reducing marine pollution.
Nearly 21.5 percent of The Bahamas’ GDP — which rises to 50 percent including indirect impacts — along with 54.5 percent of wages and 73 percent of employment are attributed to the blue economy.
Properly managed and protected, marine resources can become a major source of economic production for the country’s MSMEs, which make up 98 percent of the country’s businesses.
Ninety-five percent of the 260,000 square miles that make up the country’s exclusive economic zone is the marine space — its largest development area.
The project will benefit the country’s population and firms in general, particularly those involved in the blue economy, including 249 MSMEs that employ 1,666 workers.
This includes women-led firms, which are often smaller and younger than average and operate in low-growth, low-profit markets.
They also tend to be more affected by extreme weather events that tend to impact vulnerable populations, especially women and girls.
Non-individual direct beneficiaries will include other actors in the blue economy sector through initiatives to promote their development.
The IDB’s PBG of $200 million is expected to leverage additional resources in the international capital markets, supporting budgetary needs in a time of crucial environmental, social and economic need given the ongoing impact of COVID-19.
The operation is in line with the IDB’s Vision 2025 — Reinvesting in the Americas: A Decade of Opportunities, to achieve recovery and inclusive growth in Latin America and the Caribbean in the areas of micro, small and medium-sized enterprises, digital economy, gender and inclusion and climate change.
