Government now has the authority to borrow up to US$500 million internationally.
But with the Senate today joining the House of Assembly in giving approval for the action, the current administration’s lead spokesman in the Upper House said this would not negate plans to fix the island’s debt problems, while also restructuring the economy.
Minister of Foreign Affairs and Foreign Trade Senator Maxine McClean led debate on the related resolution, which said the funds would be raised through the issuance of securities.
She said the money was intended to boost the island’s foreign reserves, provide budgetary support to finance fiscal operations, and improve and extend government’s debt maturity profile.
“We are talking about government’s balance of payments situation against the realities of our fiscal situation, the performance of critical sectors, the real structure of our economy and of course as we look at all of this the need to take time and make some critical decisions about restructuring this economy,” she noted.
“And so as we seek to manage our debt situation … we are classified as a small island developing state which is highly indebted and that is a reality. However, because it is a reality does not mean that we will have for eternity to find ourselves in that situation.”
McClean said the larger focus aimed at negating these problems by having a restructured economy would be intensified.
“The reality is that we have as a small economy for almost as long as we have existed depended too heavily on a small range of productive sectors,” she said.
“As we look at our decisions about managing debt, we also recognize that there are certain fragilities related to the dependence on one or two particular sectors as we have done. It works okay in good times but of course because we are also… impacted by what happens around us it is clear that what has brought us to this point will not take us into the next several decades without some alteration.
“And what is really required as we look to this situation is that we have to find a way to restructure this economy… what is before us is what I would describe as root and branch change.
“It has to be a situation where the plan, which has to be executed over the short, medium and long term, there has to be root and branch change in how we do business in Barbados, in how we generate revenues and ultimately how government is able to finance its various agendas,” she added.
McClean said Barbados “has to move beyond heavy dependence on tourism, even though it is… a leading sector” and “one that we have depended on and we will continue to depend on”. (SC)