A country can have debt, but it must be sustainable, meaning that the government must be able to meet its obligations to service the debt without accumulating arrears or otherwise compromising its ability to provide important services to its people.
This is the word from Minister in the Ministry of Economic Affairs and Investment Marsha Caddle, as she leaves to participate in the Green Climate Fund (GCF) Global Conference and Private Investment for Climate Conference taking place from October 8-12 in Incheon, South Korea.
Minister Caddle will sit on a ministerial panel on day one to discuss Barbados’ national priorities for climate resilience and how the GCF – a financing mechanism set up in 2010 under the United Nations Framework Convention on Climate Change (UNFCCC) – can help support these priorities.
“The kind of debt matters, along with its timing, and what it is used for. The debt we inherited was grossly unsustainable. Barbados needed to engage in a restructuring because if we had had to meet our debt obligations in June 2018, we would have lost half our foreign reserves. We simply could not have done it.”
“It is also the reason we asked the IMF to support our BERT Plan: because it gives us access to low-interest financing from the Fund, CDB, IDB and others that we can responsibly plan to repay. This has been the recent focus of the Ministry of Economic Affairs and Investment, and we are close to having those agreements finalized. Not all debt is the same, and not all financing is the same. Yes, we do not currently have access to international capital markets. But neither did the last administration for 5 years. It means that what we must do now, is be responsible with our debt, as we are doing by focusing on low-cost, multilateral borrowing, and target grant financing from mechanisms such as the GCF.”
The meetings in South Korea, funded by the GCF, give countries the opportunity to present projects that help countries limit or reduce their greenhouse gas (GHG) emissions and adapt to climate change.
“We have set a target of being fossil fuel-free by 2030. With a fuel import bill as high as ours, and with rising fuel prices, eliminating our fossil fuel dependence will give us the fiscal space we need to make important investments in people. But this is also about preserving our environment and making our communities and economy resilient to extreme weather events, which are made more extreme from the effects of climate change. What does this require? Channeling support to entrepreneurs developing biofuel, solar and other renewable energy technologies; addressing coral erosion in the Scotland District; making climate-resilient roofs and other household retrofitting affordable; waste-water management and controlling runoff from land that pollutes the marine environment and destroys our coral reefs; and water-proofing our economy.”
Minister Caddle said that these were the kinds of initiatives, among others, that she would be presenting and discussing over the 5-day meeting with the GCF and private investors, which includes participation from Ministers of Finance, Economic Affairs, Energy and Environment from over 90 countries. She is joined by Dr. Hugh Sealy, Special Advisor on Energy, Environment and Climate Change.
Ministry of Economic Affairs and Investment