Barbados is heading to the International Monetary Fund (IMF) to ask for a new loan. Mia Motley, the woman who heads that country has told residents in Bridgetown that indeed there are rough times ahead but not a race for the swift.
Countries go to the IMF when their economies are in distress. Such situations occur due to economic mismanagement and reforms are often painful for the public.
“This decision has not been taken lightly, but this is being done to ensure Barbados can continue its trajectory of positive growth. In addition to providing further means to stabilize our country, this program will unlock critically important funding, giving Barbados a boot on the great progress we have already made, despite the hardships brought on by the global challenges,” Motley said.
In 2018, the Washington-based financial institution approved the US $290 million Extended Arrangement under the Extended Fund Facility (EFF) for Barbados, noting then that the program was aimed at helping the island restore debt sustainability, strengthen the external position, and improve growth prospects.
Going to the IMF is never an easy decision but Motley said “I know we can and will endure and at the same time create a better society for every Bajan to live in”.
This is not the first time that Barbados has gone to the IMF for financial help, in fact in September 202, the government announced that the BERT program had been updated to reflect the arrival of the coronavirus (COVID-19) pandemic and its comprehensive response.
But she defended the decision to seek assistance from the IMF, saying Barbados could have easily gone to the international market to raise the required funds.
“But I don’t want to go to the market when interest rates are being increased. We can go to the IMF and pay a fraction of what the market will ask us to pay. So we know the reality that outside is overcast globally, and there is a possibility of not just some showers, but some hurricanes and earthquakes and other things that are destabilizing countries.
“All we are saying is, blame the government, we playing inside the crease, we will step outside the crease to play a few shots when we can and we want to work with the private sector to trigger the necessary growth. There are things we are still not comfortable about as a government concerning the facilitation of business, we are getting there,” she assured Barbadians,” she said.
Motley, will be in Paris on Monday before traveling to Washington.
All this comes that the United States is providing an additional US$22.8 million in new funding this year to support Caribbean regional development goals related to climate resilience, youth security, information and communication technology, private sector engagement, and health.
The funding, through the United States Agency for International Development (USAID), includes US$10 million to combat food insecurity in the Caribbean to support priority areas identified by CARICOM under President Biden’s Caribbean Zero Hunger Plan.
The announcement coincides with the joint USAID and Caribbean Community (CARICOM) annual review of mutual objectives and priorities concluded on September 1.
In 2021, USAID announced its 2020-2025 Regional Development Cooperation Strategy (RDCS) focused on promoting accountable institutions, economic development, and private sector-led growth.