Prime Minister Mia Mottley said on Friday that government will enter another International Monetary Fund (IMF) programme in an effort to raise U.S. $340 million in financial assistance.
Mottley said following extensive consultations with the social partnership and other stakeholders starting in June this year, the Cabinet agreed on Thursday, and she will sign a letter on Friday to IMG managing director Kristalina Georgieva asking for “discussions and negotiations” to resume.
“We are living, as we all know, in very difficult and uncertain times, and in a world, where in excess of 40 countries, are on the brink of debt difficulties and debt crisis,” the prime said said during a national televised news conference on Friday.
“We are conscious between that and the monetary stance that has been taken by most central banks to control inflation has led to an increase in borrowing.”
She added: “We have been of the view that the cheapest money in town is still at the IMF. In addition to that, it also unlocks other development funds that may be made available to us as a nation…
“We also believe that what is being asked us does not vary far from our own Barbados Economic Recovery and Transformation (BERT) programme, adjustments to which we will make willingly because we recognise how we will have to hone what we are doing in the ability to recover from a COVID-19 environment but at the same time to lay that platform for growth.”
The island’s current arrangement with the IMF – a U.S. $290 million extended fund facility (EFF), which supports the BERT plan – finishes at the end of the month.
Mottley said a new EFF will allow the government access to U.S. $130 million and it will also unlock access to a new funding facility that the IMF has recently established.
“(The new facility) is not perfect in the way it has been structured, but it is a long way from anything else that exists for middle income countries such as ourselves,” the prime minister said.
“I am referring to the Resilience and Sustainability Trust, which will make available to us another 150 per cent of quota and probably in the vicinity of U.S. $200 million to U.S. $210 million on top of the U.S. $130 million that we hope to negotiate.”
She said the government will be seeking to negotiate a three-year and not a four-year agreement.
I said we will never leave the IMF, we will become the next Jamaica