BRIDGETOWN, Barbados, Wednesday March 15, 2017 – Barbados has run out of options and an International Monetary Fund Programme (IMF) is the only real hope for recovery, Former Prime Minister Prime Minister Owen Arthur has said.
He sounded the warning while making his contribution to debate on the 2017/2018 Estimates of Revenue and Expenditure yesterday
The noted economist, who positioned Barbados as one of the region’s leading economies during his 14-year term in office between 1999 and 2003, said the island was facing a $3.3 billion debt crisis that it could not handle on its own.
“A debt refinancing obligation of that order or magnitude cannot be accomplished without the help of the international financial community,” he said.
“There is a powerful reason for us to engage with the International Monetary Fund. We are not going to get over the debt unless there is some institutional arrangement that gives credibility to the creditors of Barbados that the Government of Barbados is not acting unilaterally on the matter.”
Arthur suggested there was no shame in seeking help from the Washington-based financial body, pointing out that Caribbean countries that were engaged in debt financing or debt exchange to restore economic growth had already gone that route.
“When I hear of all the things that we need to do, I say to Parliament that Barbados cannot turn its back on having its debt restructured under a Fund programme….It cannot turn its back on the $750 million it can borrow under the Fund at one per cent.”
However, the Freundel Stuart administration has been adamant that it will not seek a helping hand from the IMF.
As recent as February 28, Finance Minister Chris Sinckler told journalists at a news conference that the IMF would not be directing the country’s economic affairs.
“We do not at this time believe it is necessary for Barbados to enter into an International Monetary Fund programme, whether stand-by or structural adjustment, or whatever terminology,” he said.
Nevertheless, Arthur was adamant that while an IMF programme would not be easy, it was in the country’s best interest.
He explained that it would make it easier for Barbados to access policy-based loans from the Caribbean Development Bank and other international agencies to bolster restructuring exercises ahead.
“This is not going to be easy. Weeping may endure for a night but joy can come in the morning,” Arthur told the House.