Hands off fund

DO not touch the national Catastrophe Fund at this time.

While agreeing to the idea of supporting large businesses that make VAT payments with a one year no interest loan, President of Solutions Barbados, Grenville Phillips, is vehemently against Government’s decision to use the $50 million Catastrophe Fund to do so.

Prime Minister Mia Amor Mottley announced last Wednesday the fund would be used to keep businesses afloat, while in return these companies would have to maintain at least 75 per cent of their staffing levels.

Phillips however stated, “To justify emptying our Catastrophe Fund, the Government is relying on the disaster clause in our external debt agreements. This clause allows us to avoid making debt payments for two years, if we are impacted by a tropical storm of the strength of Kirk, in 2018.

“The Government should be highly commended for negotiating such an innovative disaster clause. If we are devastated by a natural hazard, then two years should be enough time to restart our economy and repay our debts. However, forcing us to give up our secure bone for a future illusion, is extremely unwise.”

He said it was dangerous for Government to assume that it would always have access to funds to repay creditors after an impact, as if debt payments were made shortly before an impact, the island would be in serious trouble as there would be no funds available.

He further claimed that if the island was impacted by a tropical storm, with less sustained winds of Tropical Storm Kirk, but greater wind gusts of Tomas, it may disqualify us from any benefits of the disaster clause.

“It is foreseen that we would have to repay our creditors, and have no Catastrophe Fund,” he continued.

Phillips argued that before it was emptied, the island should know how exposed the Fund was in light of how it was triggered, before asking for details on what was negotiated on the island’s behalf.