The Inter-American Development Bank (IDB) will give Barbados a two-year break from making payments on its five loans if the island is significantly impacted by a natural disaster.
Minister in the Ministry of Finance Ryan Straughn disclosed in the House of Assembly on Tuesday that after lobbying by the Government, the Washington-based institution had agreed to include a natural disaster clause in loan contracts recently approved by Cabinet.
“This is something that we advocated for since coming to office and I want to thank the IDB for reviewing the portfolio of loans that they have with us to be able to include those clauses retroactively,” Straughn said during his introduction of the Fair Credit Reporting Bill, 2021.
“If there is a significant natural disaster in Barbados… we could suspend the principal payment on those five specific loans for two years, in the same way that we have done with our domestic and our international debt obligations.”
Earlier this year, as she participated in a high-level panel discussion for the Virtual Conference on Climate-Related Natural Disasters: Macroeconomic Effects and Policy Responses, hosted by the International Monetary Fund, Prime Minister Mia Mottley emphasised the importance of natural disaster and pandemic clauses.
Straughn defended the government’s decision to take on additional debt in the last 18 months, during the COVID-19 pandemic, stressing that it was necessary to preserve public sector jobs, continue the provision of public services, and give the Ministry of Health the resources needed to fight the pandemic while keeping the traditional health care system working.
“We made a decision and we stand by those decisions,” he said. Straughn promised that the Mottley administration would continue to advocate for all credit taken on by Barbados and other vulnerable states because of the pandemic, be paid back over longer periods.
“We will continue to press that all the credit that was extended to countries as it relates to COVID be worked out over 30, 40, 50 years, such that the recovery and the financing of those debts will have a minimal impact on the fiscal situation of countries,” he said. (DP)
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