Spokesman for the Barbados Labour Party (BLP) on economic matters Clyde Mascoll has accused the government of entering a ‘secret deal’ with the Inter-American Development Bank (IADB). Minister of Finance Chris Sinckler responded with a clarification statement that there was ‘no secret deal. In fact he referred to the accusation as nonsense. To quote the Nation newspaper, “He [Sinckler] explained that he had announced plans for two separate policy-based loans (PBL) from the Caribbean Development Bank and the IDB during the Estimates debate last March.”
It appears a little silly to many that any government would expect that dealings with an international financial institution could operate under the cloak of secrecy. The IADB is an organization owned by 48 member states of which Barbados is a member. It is NOT a private institution where deals can be made away from the public glare. The governance policy of the IADB does not accommodate secret deals. John Public wonders therefore why the country could not have been spared the exchanges between the chief spokesman on economic matters for the opposition and the government.
Given the challenges which Barbados is facing in the prevailing economic climate, it is incumbent on Minister of Finance Chris Sinckler and government to communicate unambiguously about all matters of finance. It is not difficult in an age where information is at the finger tips of John Public that any government and its opposition should manufacture discussion points which only serves to polarized the country.
In the Nation newspaper report Sinckler is quoted as follows: The Finance Minister said the Freundel Stuart administration had the option of borrowing up to US$183 million but it was only requesting US$50 million which would be submitted to the IDB in August/September to support its efforts at fiscal consolidation and reform “particularly in the areas related to tax collection and efficiencies, revenues from direct and indirect tax and expenditure reviews”. [BU’s emphasis]
Here is an excerpt from the IADB document p4, Section 3.2 which explains particulars about how the loan will be disbursed to Barbados under a Fiscal Consolidation Program arrangement.
The programme is structured as a Policy-Based Programmatic Loan (PBP) with three operations over the next three years. The first operation for US$33 million [4] dollars will be disbursed in a single tranche, subject to the provision by the authorities of evidence of compliance with specific policy measures that support the achievement of the programme objectives. The other two operations will tentatively total US$150 million.
[4] The government and the Bank are exploring options to increase this first operation to US$50 million. [BU emphasis].
In summary the PBP is a three year arrangement with a phase I which will see a drawdown of USD33 million. According to note 4 of the IADB document and Sinckler’s clarification statement, phase 1 of the drawdown is to be increased to USD50 million. However the PBD is a USD150 millions dollars arrangement to be disbursed in tranches over 3-years to complete the Fiscal Consolidation Programme for Barbados.
There you have it!
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