Atherley queries true cost of debt restructuring

OPPOSITION Leader, Bishop Joseph Atherley, wants to know if the people of Barbados can expect to see any additional costs associated with Government’s restructuring plan.

He was responding to Minister in the Ministry of Finance, Ryan Straughn, who led off the debate on a supplementary of the $12 11 453 being requested, part of which he explained was being used to pay to firm Cleary Gottlieb and Hamilton LLP with respect to being able to settle not just the domestic, but also the external debt restructuring that took place.

According to Bishop Atherley, “We were told that the White Oak Advisory group and their engagement cost us about $54 million. I personally don’t think that questions have been fully answered to a good level of satisfaction with reference to that particular arrangement.

“Certainly I don’t think we’ve even heard clearly why White Oak in the first place and the process under which they were selected, but that is not my point today. The fact is that cost us about $54 million. Today we heard we have to settle a legal liability associated with the debt restructuring of $12 million and I simply stand on my feet to ask if we can anticipate any further liability on the part of the Barbados Government with respect to the whole process of debt restructuring to be brought to this Honourable Chamber.”

In response, Minister Straughn sought to set the context under which the then new administration took the decision to secure “the best” to address the dire debt situation facing the country.

“I stand 100 per cent behind the decisions that we took, because when faced with a situation where the country was barrelling over a cliff, we had to pull it back. And in pulling it back, we sought the best possible advice that we could get and therefore, I fully support the decisions that we made at that time.”

“Having said that, yes we have restructured the debt. Barbados is not yet out of the hole that we found ourselves in, because there are a number of other reforms to be done to be able to get ourselves out. Our debt to GDP is still above 100 per cent. When we left office, the debt to GDP was about 66 per cent at the end of 2007. Our mission is to restore it to 60 per cent of GDP by 2033.”

He explained: “Because the path which we have put this country’s debt to GDP, which is down, we should not see the need to re-engage any other debt advisors or legal advisors as it relates to debt because this government, we have created a path where we can create that fiscal sustainability, which will lead to greater debt sustainability.”

Saying that the previous administration placed the currency peg in peril, he reiterated that it was necessary to engage the services of White Oak because of the urgency of the situation.

“And therefore we sought the best legal support to support that of the debt advisors and we were able to bring what clearly has been perhaps the most sordid management of this country’s public finances to closure by the previous administration. We have settled it and therefore we anticipate that having settled that and by bringing our debt to GDP to 60 per cent by 2033, that unless the people of Barbados determine that they wish to go in another direction and another government chooses a different path, then we do not anticipate that there will be any cost associated with debt restructuring.”