$65 million of $100 mil. Grant under consideration: EU ready to Assist Barbados in difficult Economic Situation
Officials of the Government of Barbados and the European Union recently met to review aspects of the EU’s co-operation and to discuss other issues such as public finance management as well as the country’s economic outlook. The meeting was chaired by Honourable Minister of Finance and Economic Affairs, Christopher Sinckler, while the European Union was led by Ambassador Mikael Barfod.
Ambassador Barfod indicated that at present there is overall BBD $100 million grant funding available to Barbados and once certain macro-economic and public finance criteria are fully met the European Union could release BBD$65 million of that amount this year.
“The EU would like you to know that it could assist Barbados in leaving the present crisis behind,” Ambassador Barfod told Minister Sinckler. The latter inquired whether the EU could also assist with the financing of infrastructure projects outside of the traditional grant assistance it provides Barbados, to which Ambassador Barfod advised that the government should seek to access financing from the Caribbean Investment Facility, in addition to EU funds allocated to CARICOM for regional projects and programmes.
The European diplomat called for more information on how the government intends to manage its debt in the medium term and added that he wanted to hear more about the package of reform that the government had begun undertaking.
In relation to a query about economic growth Minister Sinckler pointed out that most of the revenue raising measures of the restructuring programme will not take effect until next fiscal year, since it is a 19 months programme. “The present adjustment exercise will not be the end of the restructuring period since the restructuring will extend to a reform of state entities outside of central government, as the goal is to bring the deficit down below five percent.” Minister Sinckler said.
As it relates to the country’s foreign reserves Minister Sinckler told the EU officials that at present the cover was 15.2 weeks, as they were boosted by the Credit Suisse loan in December 2013. The foreign component of the debt was currently about 6 percent of foreign exchange earnings, which was manageable and going forward it will remain below 10. The Finance Minister said the larger part of Barbados’ debt is held domestically and with high liquidity in the domestic financial sector, roll over risks are low.
The two sides agreed to have more regular dialogue that could help resolve budget support issues. Minister Sinckler concluded by saying that the EU’s support to Human Resource Development in Barbados is absolutely central to what the government is doing as it takes on a larger role at this time, when Barbados is seeking to enhance economic growth and competitiveness.
The European Union last year released BBD$28 million for the Barbados Human Resource Development Programme, while another BBD$15 million was provided through the Barbados Renewable Energy Programme, all in the form of non-reimbursable grants.
Past EU support to Barbados includes the expansion to the Barbados Language Centre at the Barbados Community College, the Barbados Health Programme, construction of the Pommarine Hotel Training Institute, support to the Information and Communication Technology sector, support to the International Business and Financial Services Sector and the provision of equipment for the Forensic Sciences Laboratory.