BY JULIE CARRINGTON | SEP 30, 2022
Prime Minister Mia Amor Mottley speaking during a recent press conference to announce that Barbados and the International Monetary Fund (IMF) have reached an agreement for a new Extended Fund Facility. To her left is IMF Mission Chief, Bert van Selm. (C. Pitt/BGIS)
Barbados and the International Monetary Fund, (IMF) have reached an agreement for a new Extended Fund Facility (EFF) to shore up the island’s resistance to climatic events and its efforts to reduce public debt while facilitating capital expenditure to boost growth.
This was disclosed during a joint press conference between Government and the IMF at Ilaro Court recently. There, it was also announced that the country was the first in the world to reach an agreement with the Washington-based institution to access funding from the newly established Resilience and Sustainability Trust (RST) to help build resilience against climate change and to assist with the goal of 100 per cent green economy by 2030.
Under the agreement subject to the IMF’s board approval, Barbados will have access to US $183 million in special drawing rights (SDR) under the RST and an additional US $110 million in SDR under the three-year EFF. Repayment of the RST will be over 20 years with a 10-year moratorium before repayment.
Prime Minister Mia Amor Mottley thanked the IMF officials for allowing the country to reach staff-level agreement while pointing out that Barbados had done “reasonably” well during the last programme and had passed all of the structural benchmarks.
She contended that with multiple crises impacting the world the safe option was to provide the best protection for Barbados and its citizens.
“None of us in this room or in this world, two weeks ago, could have anticipated either the impact that hurricane Fiona has had on natural gas supplies…the impact that Hurricane Ian may have on the movement of goods and I don’t only mean food…but of course food as a primary concern. And, the impact that the explosion of the gas line in Europe will have on us and on the global community. It is for these reasons that the Government of Barbados…the Cabinet of Barbados, has taken the decision after consultation with members of the Social Partnership, with members of academia and others that it is better to be safe than to be sorry,” she contended.
Ms. Mottley expressed delight at being able to access the RST after years of pleading with the international community with respect to the needs of middle-income countries that are vulnerable to climatic events.
“And we say it because countries like Barbados and the Bahamas have been graduated and therefore are not permitted in some instances even to borrow which is the discussions we’re having with the World Bank to ensure that we can borrow for climate because we were not even allowed before the loan that we just got for COVID for which exceptional access was given…,” the Prime Minister stated.
Meanwhile, IMF Mission Chief Bert van Selm said the island’s access to the RST was a vote of confidence in the island economic prospects.
“There is also a need to be able and willing to implement a fund-supported programme and few countries have shown that like Barbados has, over the past four years, with reviews under the programme completed like clockwork. That’s very exceptional and that, of course, gives a lot of confidence at the IMF but also in the international community more broadly, that this is a government that can meet its commitment and can do what it says it will do,” he underlined.
