Step in the right direction, says Prime Minister Mottley

PRIME MINISTER Mia Amor Mottley has welcomed the establishment of the Resilience and Sustainability Trust (RST) as a “step in the right direction”.
The Executive Board of the International Monetary Fund (IMF) approved the RST which takes effect from May 1, 2022, to complement the IMF’s existing lending toolkit by focusing on longer-term structural challenges, including climate change and pandemic preparedness – that entail significant macroeconomic risks. Therefore, about three- quarters of the IMF’s membership will be eligible for longer-term affordable financing from the RST, including all low-income countries, all developing and vulnerable small states, and lower middle-income countries.
Participating in the IMF Spring Meetings 2022: Debate on the Global Economy on Thursday, Barbados’ leader thanked the IMF and expressed to panellists, who included Managing Director Kristalina Georgieva, “We thank you, and in fact, it’s
a right step in the right direction. It’s the only step thus far that acknowledges vulnerability, but we need the World Bank, and the Development Banks to go further with us. “And the reality is one of the things you said to us at the beginning of the pandemic, was that you needed us to spend the money, but keep the receipts. And we did in fact keep the receipts so it should be easy to identify COVID-specific debt, it should even be easy to identify climate-related debt. But what we need to do because of our high debt already is to put them on another international bal- ance sheet, you can perhaps have a pandemic trust, and you can have a climate adaptation trust. But the reality is that what we need is to be able to move it off our balance sheet because if it is on our balance sheet, then it precludes us from being able to achieve the SDGs, which is our normal development trajectory.”
“...Now we have to think outside of the box, because it’s becoming increasingly difficult even for us to shield our popula- tions with the limited fiscal space that we have, against the fact that the cost of
debt is likely to increase because of the monetary conditions tightening, and be- cause of the fact that we just simply are not seeing the rate of economic recovery as quickly as we need to,” Ms. Mottley added.
The IMF Managing Director shared with the panel that Ms. Mottley has been championing the allocation of conces- sional finance, not only on income per capita, but also on vulnerability to climate shocks.
“And today at the discussions we had the Resilience and Sustainability Trust, which will provide long-term maturity. Finally, financing to vulnerable middle countries got a big boost – we signed up already $40 billion for it.
“One instrument that you (Mottley) should take pride of is when Christine Lagarde was the managing director of the IMF, I remember you saying to us there has to be allocation of concessional finance, linked to vulnerability, it has happened,” Georgieva said.