Public-private partnerships are key to unlocking the Caribbean’s economic growth

A recent World Bank report has highlighted that the LATAM/Caribbean is forecast to be the world’s slowest-growing area in 2025 and 2026. This is forcing regional leaders to adapt growth strategies and to prioritise innovative growth solutions including those driven by foreign investment.

Relative economic stagnation across the region has resulted in ‘significant deficiencies’ in transport, energy, water, and telecommunications infrastructure according to a recent Development Bank of Latin America and the Caribbean report.

Looking at the Caribbean specifically, investment shortfalls largely stem from relying exclusively on public financing for infrastructure projects. Much like other developing countries, even where there is strong political will, Caribbean governments struggle to secure budget allocations for major infrastructure projects due to their limited national budgets.

As a result, projects are often delayed, scaled down, or even abandoned altogether, leaving emerging nations underdeveloped, vulnerable to global economic shocks, and unable to attract investment due to lack of investor confidence.

This was unfortunately the reality for the Dominican Republic’s water infrastructure development. Despite laudable government efforts to invest USD $8.85bn over 15 years to improve water infrastructure, a lack of funding has led to the abandonment of several critical projects at a time when climate change exacerbates water scarcity.

As a result, currently only nine percent of the country’s 36 dams are in ‘good condition’ and water treatment upgrades have been postponed, leaving citizens severe facing water shortages.

The Caribbean is therefore turning to private investors to solve economic challenges and to supercharge development, with leaders looking to build on longstanding partnerships with multilateral institutions.

The potential of public-private partnerships

Public-private partnerships (PPPs) are becoming a key mode of financing in the region across a variety of sectors and align with calls by major global bodies including the IMF and World Bank for nations to seek innovative solutions to address economic challenges.

As an example, the World Bank has pointed to a successful Jamaican initiative which has seen private capital mobilization of nearly USD $600m. This has in turn trickled down into wider infrastructure projects, stimulated the local economy, and led to growth creation.

The organisation has called on countries across the region to ‘identify opportunities for greater private capital mobilisation’. This is particularly important given recent economic challenges driven primarily by wider market instability.

Macroeconomic instability has resulted in a sharp reduction in key staples of the Caribbean’s revenue, most notably income from citizenship-by-investment (CBI) programmes.

St Kitts and Nevis, home to the world’s first CBI programme, recorded a decrease of 60 percent in 2024. Grenada witnessed similar declines, recording just 420 CBI applications in 2024, down from 2,300 in 2023.

The Premier of Nevis, Mark Brantley, has in recent months repeatedly emphasized the importance of new economic partnerships and the necessity of foreign investment. Such calls have been repeated in recent weeks by senior officials from leading development organisations.

Against this backdrop, PPPs offer a strategic opportunity to unlock much-needed investment and expertise. Leveraging private sector capital can enable governments to deliver largescale infrastructure projects that would simply be unattainable if public funds were relied upon alone.

The road ahead

The Caribbean finds itself sitting at an investment crossroads.

The region’s infrastructure needs modernizing, and economies remain almost exclusively reliant on the tourism sector. While sufficient for survival, this revenue alone is not conducive to more significant socioeconomic development.

The Caribbean’s needs cannot be met by public funds alone. With recent foreign aid cuts, the region has an opportunity to seek new solutions and partners to drive forward. Public-private partnerships form a key component of this development journey.

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