Prime Minister Mia Motley Friday announced that Barbados would be seeking a new loan agreement with the International Monetary Fund (IMF) this month, telling Barbadians “these are indeed rough waters”.
In 2018, the Washington-based financial institution approved US $290 million Extended Arrangement under the Extended Fund Facility (EFF) for Barbados, noting then that the programme was aimed at helping the island restore debt sustainability, strengthen the external position, and improve growth prospects.
Mottley, speaking at a news conference here, said that her government had decided to return to the IMF later this month “with the intent of starting a BERT (Barbados Economic Recovery and Transformation) 2022 programme.
“This decision has not been taken lightly, but this is being done to ensure Barbados can continue its trajectory of positive growth,” she said.
“In addition to providing further means to stabilise our country, this programme will unlock critically important funding, giving Barbados a boot on the great progress we have already made, despite the hardships brought on by the global challenges,” Mottley said.
She told Barbadians “these are indeed rough waters, but this is not a race for the swift and I know we can and will endure and at the same time create a better society for every Bajan to live in”.
In September 202, the government announced that the BERT programme had been updated to reflect the arrival of the coronavirus (COVID-19) pandemic and its comprehensive response. The authorities said then that BERT was not a rigid set of targets, but a plan of action and behaviour that was measured and monitored.
Mottley Friday defended the decision to seek assistance from the IMF, saying Barbados could have easily gone to the international market to raise the required funds.
“But I don’t want to go to the market when interest rates are being increased. 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 on the international market is not something the island would want to be involved with at this time.
“So we know the reality that outside is overcast globally, and there is a possibility of not just some showers, but some hurricanes and earthquakes and other things that are destabilising countries.
“All we are saying is, blame the government, we playing inside the crease, we will step outside the crease to play a few shots when we can and we want to work with the private sector to trigger the growth that is necessary.
“There are things we are still not comfortable about as a government with respect to the facilitation of business, we are getting there,” she assured Barbadians.
Mottley, who announced that she will be in Paris” on Monday before travelling to Washington, said her discussions in the French capital with the representatives of the Organisation for Economic Co-operation and Development (OECD) on taxation issues.
“They are the ones that continue to be able to put a lot of pressure on this whole question of global minimum tax. Now most of us in the world have agreed invariably it is going to come. But the problem is they want transitions by governments by 2023, then they changed it to 2024 because of COVID.
“2023 and 2024 is still tomorrow for all intent and purposes and therefore countries like ours have to be able to argue that to be able to sacrifice that kind of corporation tax in that 18-month time period…is unfair, it’s wrong”.
She said even if the countries wanted to correct these issues “countries either have to be compensated or need a longer period of time to adjust, because what you are talking about is effectively the equivalent of just about 10 per cent of our overall revenue which just cannot be put on the table so.
“Now I don’t want to go, but if I don’t go….then we are at risk of being a victim to decisions being made outside of our region, far less outside of our country,” she said.
Mottley said on Wednesday next week, she will be in Washington where she will be giving evidence before the United States House of Representatives Committee on Financial Services at a hearing titled “When Banks leave: The impacts of De-Risking on the Caribbean and Strategies for Ensuring Financial Access.”
She reminded reporters of the sessions held in Barbados earlier this year involving the Committee’s chairman, Maxine Waters and other US legislators.
“When they came they promised that they would arrange Congressional hearings for us so that we can make a case,” she said, adding “because in the Caribbean if banks can’t get access to corresponding banking you can’t trade.
“There are banks now refusing to take in this region US dollars, not local currencies, but US dollars, because there are no corresponding banking relationship and therefore these are the battles that we are fighting,” Mottley added.
She said on Thursday, a meeting will be held with US Vice President Kamala Harris “to be able to report on the sub-committee that Barbados chaired which was on the Finance Committee coming out of the Summit of the Americas” that was held in the US in June.
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