Barbados seeks new loan deal with International Monetary Fund
On Friday, Prime Minister Mia Motley announced that Barbados would seek a new loan deal with the International Monetary Fund (IMF) this month, telling Barbadians “these are indeed rough waters”.
In 2018, the Washington-based financial institution approved an expanded US$290 million arrangement under the Expanded Financing Facility (EFF) for Barbados, noting that the program was aimed at helping the island restore debt sustainability, strengthen the external position and improve growth prospects. .
Mottley, speaking at a press conference here, said his government had decided to return to the IMF later this month “with the intention of launching a BERT (Barbados Economic Recovery and Transformation) 2022 program.
“This decision was not taken lightly, but it is done to ensure that Barbados can continue on its positive growth trajectory,” she said.
“In addition to providing additional means to stabilize our country, this program will unlock critically important funding, giving Barbados a boost on the great progress we have already made, despite the difficulties caused by global challenges. “, Mottley said.
She told Barbadians “these are indeed rough waters but this is not a race for the fast and I know we can and will endure and at the same time create a better society for every Bajan”.
In September 2020, the government announced that the BERT program had been updated to reflect the arrival of the coronavirus (COVID-19) pandemic and its overall response. Authorities then said that BERT was not a rigid set of goals, but a plan of action and measured and monitored behavior.
Mottley Friday defended the decision to seek help from the IMF, saying Barbados could have easily turned to the international market to raise the necessary funds.
“But I don’t want to go into the market when interest rates go up. We can go to the IMF and pay a fraction of what the market will ask us to pay,” she said, adding that the environment in the international market is not something the island would want to be involved in. for the moment.
“So we know the reality is that it’s mostly overcast outside, and there’s a possibility of not just a few showers, but also hurricanes and earthquakes and other things that destabilize countries.
“All we’re saying is blame the government, we’re playing inside the fold, we’ll come out of the fold to play some shots when we can and we want to work with the private sector to trigger the growth needed.
“There are things that we are still not comfortable with as a government in terms of facilitating business, we are getting there,” she assured Barbadians.
Mottley, who announced she would be in “Paris” on Monday before heading to Washington, reported on her discussions in the French capital with representatives of the Organization for Economic Co-operation and Development (OECD) on tax issues .
“They are the ones who continue to be able to put a lot of pressure on this whole question of the global minimum tax. Now, most of us in the world have invariably agreed that it will happen. But the problem is they want transitions by governments by 2023 and then they changed it to 2024 because of COVID.
“2023 and 2024 is still tomorrow for all intents and purposes and therefore countries like ours must be able to say that being able to sacrifice this kind of corporate tax in that 18 month period…is unfair, it is wrong”.
She said that even if countries wanted to correct these problems, “countries need to be compensated or need a longer period to adjust, because what you are talking about is actually about 10% of our overall income which cannot be put on the table as well.
“Now I don’t want to go, but if I don’t… then we risk being victims of decisions made outside our region, let alone outside our country,” said she declared.
Mottley said Wednesday next week that she will be in Washington where she will testify before the U.S. House of Representatives Financial Services Committee in a hearing titled “When the Banks Go: The Impacts of Risk Reduction.” on the Caribbean and strategies for ensuring financial access.
She reminded reporters of sessions held in Barbados earlier this year with Committee Chair Maxine Waters and other US lawmakers.
“When they came, they promised that they would hold congressional hearings for us so that we could plead,” she said, adding “because in the Caribbean, if banks can’t access services correspondent banks, you cannot negotiate.
“There are banks that are now refusing to take US dollars in this region, not local currencies, but US dollars, because there is no corresponding banking relationship and so these are the battles we are fighting,” Mottley added.
She said on Thursday that a meeting will be held with US Vice President Kamala Harris “to be able to report on the subcommittee that Barbados chaired and that was part of the finance committee that came out of the Summit of the Americas” that took place. is held in the United States in June.