BRIDGETOWN, Barbados, Monday June 18, 2018 – Following a visit of one team from the International Monetary Fund (IMF) and Prime Minister Mia Mottley going up to Washington to speak with officials of the financial institution, has come news that another team from the IMF will be in Barbados next month to begin negotiations with Government.
Prime Minister Mottley made the disclosure over the weekend, as she gave an update following the latest talks with IMF Managing Director Christine Lagarde, which she said went well.
She said she was happy the engagement with Lagarde recognized the country’s situation was urgent, and reported that the IMF was prepared to support Barbados’ Economic Recovery and Transformation Plan.
“The initial team was just a fact-finding team. This team that comes now, from July 2 to 12, will actually be a negotiating team with the Barbados Government, to be able to settle on what would be the terms and conditions of the contract that underpins how much money they will supply to us, and what conditions there will be, if any, to that money,” she explained.
“We had an excellent meeting [last week]. We were able to articulate clearer why we need to be able to have a baseline that takes into account fixing our broken infrastructure and protecting the most vulnerable in our society. [We also spoke about] why we will continue to do the things that we have to do in order to be able to make the structural adjustment. That is critical—to make Barbados’ Government more fiscally responsible and to be able to see growth come back to our economy in a way that it has not over the course of the last decade.”
The Prime Minister indicated that the IMF had shown a willingness to cooperate with Barbados and responded with alacrity when she and her team engaged with the IMF officials.
“Anyone who knows anything about these processes [talks with the IMF] will tell you that they are amazed at how…fast we are moving forward….We recognize that uncertainty cannot serve the interest of anyone in this country….It is in our interest to be able to get to the point where we can put the framework for what is our programme behind us, such that all Barbadians can play their part,” she said.
Motley explained that the support Barbados would be seeking from the institution would be a loan at “very, very negligible” interest rates—around one per cent. She added that it would allow the country to boost its international reserves.
“But the importance of going to the International Monetary Fund is that it unlocks other international concessional funding. So, for example, the Inter-American Development Bank will now be in a position to start lending us serious amounts of capital once we have an agreement with the IMF.
“Indeed, upon signing with the IMF, there is an immediate unlocking of significant amounts of capital and then we go into other discussions with them on policy based loans and investment sector loans; and similarly, with the Caribbean Development Bank and others,” the Prime Minister stated.
She gave the assurance that Government was engaging with the IMF to bring back growth to the country to preserve the Barbadian quality of life and the value of the dollar, and not “to go on a spending spree”.
The Prime Minister noted that even though the meetings in Washington went much better than she and her team could have contemplated, in terms of the timelines, the work now lay ahead of them.
She said the Government is preparing a strong negotiating team for the discussions with the IMF.