Local creditors are anxious to hear what path Government’s debt restructuring programme will take, following Prime Minister Mia Mottley’s announcement last Friday that her week-old Barbados Labour Party (BLP) administration would ask local creditors to roll over principal maturities until restructuring agreements were concluded.
Chairman of the Barbados Private Sector Association (BPSA) Charles Herbert confirmed to Barbados TODAY this afternoon that local creditors had “lots of concern” about the path Government was taking, adding that the main concern was the lack of details at this point.
However, he quickly pointed out that they were not about to rush the process, since they wanted the officials to “get it right”.
“I think there are lots of concern, but at the minute there are no specifics. So we don’t know whether the ultimate restructuring deal that will be recommended, will deal with all of our concerns,” said
Herbert, moments after members of the private sector emerged from talks with visiting International Monetary Fund (IMF) officials.
Government’s overall bonds, loans and other financial liabilities are estimated at nearly US$9 billion currently, with more than two-thirds being domestic debt owed to local investors and banks.
Barbados TODAY understands that there has been some concern that a harsh restructuring programme could create a number of risks to the local financial system.
Herbert did not want to get into the specific concerns, but insisted that “everyone said clearly that we want to get it right the first time”.
“Nobody can make specific comments or be specific about what they are worried about because you don’t know if what you are worried about is in the recommendation because there are no recommendations yet. There is nothing you can do until there is a firm proposal on the table. You can’t worry about the diagnosis until you hear the diagnosis. So we are all waiting to hear, but there is nothing to hear at the moment,” he explained.
“What everyone said very clearly is that we want to get it right the first time. That is the experience of other countries. So we don’t want to rush it, we want to get it right. We need to let the consultants do their job, come back with recommendations and then there will be something to discuss. But right now there is just the knowledge that the consultants are in, there is something that they intend to do, but there are no specifics,” added Herbert, who described today’s talks with the IMF as “cordial and non-specific”.
He explained that the meeting was simply intended to bring the IMF up to speed on the general spirit of cooperation that existed between the Social Partners – Government, labour and private sector – in order to formulate a national framework.
Herbert said he understood the process leading up to a decision on a programme between Government and the IMF could take several weeks and the general consensus was that a viable framework was needed.
“It is really just the beginning of the process that will take some time. There are a lot of creditors who are worried and therefore from that point of view, it is in our interest to get past the process as quickly as possible. But we have a lot of groundwork to deal with in getting it right,” he said.