There is no doubt in the mind of former Prime Minister Owen Arthur that Barbados will turn to the International Monetary Fund (IMF) for help to tackle its fiscal problems.
Speaking during debate on 2017/2018 Estimates of Revenue and Expenditure, Arthur said the move was inevitable, warning that the island simply could not tackle its $3.3 billion debt crisis on its own.
“A debt refinancing obligation of that order or magnitude cannot be accomplished without the help of the international financial community.
“And Sir, there is a powerful reason for us to engage with the International Monetary Fund. We are not going to get over the debt unless there is some institutional arrangement that gives credibility to the creditors of Barbados that the Government of Barbados is not acting unilaterally on the matter,” he said.
Noting that Caribbean countries that engaged in debt refinancing or debt exchanges were doing so under the auspices of the IMF, the former Prime Minister, who recently assisted Grenada with its IMF programme, said while a relationship with the Washington-based lending institution would not be easy, Barbados had nothing to lose.
“When I hear of all the things that we need to do I say to Parliament that Barbados cannot turn its back on having its debt restructured under a Fund programme . . . . It cannot turn its back on the $750 million it can borrow under the Fund at one per cent.”
Government has repeated said Barbados would not seek help from the global monetary agency, with Minister of Finance Chris Sinckler repeating the pledge at a recent news conference.
“We do not at this time believe it is necessary for Barbados to enter into an International Monetary Fund programme, whether stand-by or structural adjustment or whatever terminology,” he said.
It is a position that is at odds with the man who was recently tipped to head Government’s economic advisory council.
Arthur today reiterated his position that an IMF programme would make it easier for Barbados to access policy-based loans from the Caribbean Development Bank and other international agencies to bolster the restructuring exercise.
“Sir, this is not going to be easy. Weeping may endure for a night but joy can come in the morning,” he told the House.