IMF TEAM COMING

An International Monetary Fund (IMF) team will be visiting Barbados soon to start discussions on how the Fund can support the government’s economic reform programme, which is currently being finalised.

Christine Lagarde, Managing Director of the IMF, made the announcement in a statement issued yesterday.

“As announced by Prime Minister Mottley earlier today, the Barbados economy has been going through significant challenges for some years. The authorities are developing an economic reform plan designed to address these challenges, and they have asked the international community and the International Monetary Fund to assist them as they put the economy back on a path to recovery,” she remarked.

“An IMF team led by Bert van Selm will be visiting Bridgetown to start discussions on how the Fund can support the authorities’ economic plan. Our ultimate goal is to help Barbados achieve higher living standards and more inclusive growth for the years ahead,” Lagarde added.

The revelation came on the heels of an announcement made by the Barbados Labour Party Government that due to the debt inherited by the former Democratic Labour Party administration, it will be seeking the cooperation of its domestic and external creditors in restructuring the public debt.

Prime Minister and Minister of Finance, Economic Affairs and Investment, The Hon. Mia Mottley, following the second meeting of the Social Partnership which took place at the Lloyd Erskine Sandiford Centre on Friday, noted that the Government has decided to suspend payments due on debts owed to external commercial creditors. The Government will endeavour to make scheduled domestic interest payments, but domestic creditors will be asked to roll over principal maturities until restructuring agreements are concluded.

Mottley further revealed that the Government is finalising the comprehensive economic reform programme. This programme, she said, will seek to stabilise the public finances after years of mismanagement and create conditions for the return of sustained economic growth to Barbados. The plan is designed to attract balance of payments support from the International Monetary Fund. To that end, she said the Government invited a mission from the IMF to visit the country as of next week.

“My friends, we are members of the International Monetary Fund, and last night I spoke with Christine Lagarde, its Managing Director. I briefed her on the present state of the public finances of Barbados; the current debt and reserve positions, and assured her that we are committed to taking decisive action to rebuild Barbados. In turn, Madame Lagarde assured me that the International Monetary Fund stands ready to lend Barbados the necessary assistance and support to these actions,” Mottley announced.

“Our Barbados Economic Recovery and Transformation Plan is a partnership for progress. It is intended to initially provide balance of payments support from the International Monetary Fund and the Government has invited a mission from the IMF to visit Bridgetown shortly. I am advised by the Governor of the Central Bank that that mission shall be here as early as Tuesday, given the urgency that we have expressed and I want to thank Madame Lagarde for responding,” she further stated.

Mottley meanwhile lamented that when the last Administration took over, they inherited a debt of about $6 billion and they complained that it was too high. Yet they left a debt level, when arrears are added, of over $15 billion.

“And what did they spend the money on, the previous Government, that built up this debt that we are now paying all of this interest on? Where did the $9 billion of extra debt come from? On what was the $9 billion spent?” she queried.

“The last Government put itself in a trap. Wasted spending pushed up the debt, and pushed up interest payments, so they raised taxes which stopped the economy from growing.

“Today, my friends, we prise off the hands that have been strangling us – that have been choking us,” Mottley declared. (RSM)