BRIDGETOWN, Barbados, Thursday June 21, 2018 – Prime Minister Mia Mottley says her Government will seek to access millions of dollars in loans that had already been approved by the Inter-American Development Bank (IDB), but which the former administration failed to access.
She made the disclosure following a meeting with IDB President Luis Alberto Moreno, and his team, at Government Headquarters yesterday.
Although she described the meeting as “very good”, Mottley reported that Barbados had not been good over the last few years with respect to drawing down on approved IDB loans.
“There were five loans that were cancelled with the bank between 2016 and 2017. I am not sure how a country that needs concessional funding can engage in the luxury of having loans cancelled. And we have promised that that has to be a thing of the past, that we need to be able to reposition our country,” she said.
“Our disbursement rate regrettably is among the lowest, if not the lowest in the hemisphere, at 13 per cent. Jamaica’s is at 32 per cent and that gives you an idea of where the disparity lies between Barbados and some of the other countries in the region.”
Barbados has a loan portfolio with the IDB of US$191 million, and the Prime Minister said US$135.7 million of that amount remains undisbursed, in spite of the fact that many of those loans were in place for three to five years.
She added that as a result, at least three major loans were at risk and Government and the Bank had agreed to “put them in good shape again”, even if it meant tweaking them.
“I refer to a loan to strengthen human and social development in Barbados, 90 per cent of that remains undisbursed and that loan was signed since September 2015. The Road Rehabilitation Programme, which is US$25 million and US$24.7 million, remains undisbursed. In other words, we spent US$300,000 even though that loan was signed in November 2015, and I am sure Barbadians would be surprised given the state of our roads today,” she said.
“The deployment of cleaner fuels programme and renewable energy in Barbados, which is US$34 million and US$32.2 million, remains available and not disbursed even though that loan was signed almost two years ago.”
Mottley disclosed that Minister in the Ministry of Economic Affairs and Investment, Marsha Caddle, had been given the responsibility of getting those loans fully functional.
She noted that as the country goes forward in the next few years, its major sources of funding would be concessional funding from the international and regional financial institutions.
Barbados is preparing to enter into negotiations with the International Monetary Fund (IMF) and that the IDB President is already in discussions with the Fund on that matter.
And the Prime Minister disclosed that the IDB had Special Development Lending which it would make available to the country upon settlement of an agreement with the IMF.
“That two per cent of GDP, on top of whatever agreement we reach with the IMF, is going to be important in helping us to finance our way, in terms of Government’s programmes,” she said.
In addition, Mottley noted that the IDB had a credit contingent facility mechanism in the event of a hurricane or natural disaster. She explained that the Bank would disburse two per cent of GDP in credit to allow the country to move expeditiously to meet its immediate needs. She explained that the country would have access to almost BDS$200 million (US$100 million) within days of a natural disaster to meet any immediate needs.
Speaking after their meeting, Moreno said the IDB was keen to assist Barbados, and he had several discussions with Prime Minister Mottley about the way forward.
“She and I discussed along the way many times the need to… bite the bullet and do some of the things that she is embarking on for the good of all of the people of Barbados. When I saw that, it was my immediate reaction to get on the phone and to say, we are here to help, because when leaders take those kinds of decisions, when they decide to confront the issues of a country, they deserve all the help and all the friends,” he said.
Moreno said he recently met with the IMF’s Managing Director, Christine Lagarde, and they had extensive talks about how they could help Barbados in this challenging time. He added that he was convinced that as they go forward, the IDB’s role would be more than supporting balance of payment issues, but also about development issues of the country.