Prime Minister Mia Amor Mottley has again made the case for some kind of long-term refinancing of the COVID-19 debt, which Caribbean countries have had to assume since January 2020.
Ms. Mottley expressed the view today as she participated in the Caribbean Development Bank’s (CDB) The President’s Chat, on Marshalling Finance for Development, with the Bank’s President, Dr. Hyginus “Gene Leon, and moderated by Governor of the Eastern Caribbean Central Bank, Timothy Antoine.
During the 90-minute discussion, the Prime Minister identified securing jobs and bringing back growth to the economies as critical to Caribbean countries, as theycontinue tobe impacted by the pandemic.
She noted that most regional economies, especially those that were tourism and travel dependent, had recorded declines last year.
“Our first objective therefore has to be to ensure that we can grow this economy, but grow it with equity; grow it with jobs; grow it with opportunities, and grow it in a manner that is green. And we believe that as we do that, we’re also preparing ourselves to adapt to the climate crisis.
“So, what is needed now, more than anything else, where governments have the fiscal capacity to do some stimulus activity, [then they do so] whether it is in housing, coastal protections, the avoiding of flooding, fixing drains, [or] water augmentation and water distribution… All of these are major capital works projects that are necessary to boost infrastructure and to ensure that we have a level of competitiveness again,” she suggested.
Ms. Mottley said a country’s access to finance and fiscal space would determine if they could undertake those projects.
She added that if Barbados had not completed its domestic and international debt restructuring before the pandemic struck, she did not know where the country would be today.
“So that has given us, for example, the capacity to be able to play some shots…during the pandemic, largely because we have the equivalent of probably about 39 weeks of import cover now. It was as high as about 42 weeks a little while ago,” she explained.
The Prime Minister expressed the view that Caribbean governments have to find ways of mobilising the US$50 billion in private funds and savings in this region.
“We have to find a way of unlocking, at least in my view, two and a half percent of that, in order to be able to start the process of financing development within the region. The difficulty is, there’s a lot of nervousness because people are not sure whether existing governments will have to do further…restructuring of debt, and therefore, they wonder what their position will be in that context.
“I really do believe that the most urgent thing is for governments also to determine what is the message that they want to send to the market – both local, regional and international – in terms of their debt structure, and how they believe they can finance the medium-term to long-term development that is so critical, while at the same time accessing the liquidity to meet the short-term cash flow needs,” she said.
Ms. Mottley suggested that more functional cooperation was needed in the region.