Statement by Professor Avinash Persaud, published in the Financial Times, Tuesday, May 14, 2019.
I am disturbed at the level of considered imbalance in your report “Barbados creditors fume at ‘absurd’ $27m advisory fees for boutique firm” (May 10).
You refer to White Oak Advisory as a little-known advisory firm but neglect to point out that of the 14 sovereign restructurings in the world since 2005, White Oak has advised on seven of them, Lazards four and Citi one. It was an obvious choice for Barbados.
The timing of your report is interesting. In uncommon transparency, Barbados published the terms of the contract and announced the level and ratio of the fees in parliament in March this year.
The Financial Times chose to publish its story in the week that the International Monetary Fund mission is in Barbados, seven weeks later.
Onlookers will see this timing as another attempt by external creditors to use public opinion to influence negotiations. We are not blinking.
In your report, an external creditor suggests the fees are absurdly high because they are at the same level as those paid to Greece’s advisers where the debt was 40 times larger. We weigh costs with benefits.
Following the domestic part of the debt restructuring, Barbados’ debt has fallen from 175 per cent of gross domestic product including arrears, the third highest in the world, to 125 per cent of GDP and is on track for less than 100 per cent. Greece’s debt remains the second highest in the world.
The Greek restructuring programme imploded the economy, causing severe social deprivation and a banking crisis. White Oak was part of the team that ensured the Barbados economy and financial system was stable.
We increased welfare and pension payments and ringfenced public health and education in the most shared economic adjustment programme in history. We have had value for money. We would hire White Oak again.
Professor Avinash Persaud
Special Envoy to the Prime Minister of Barbados on Investment and Financial Services, Prime Minister’s Office