Barbados’ ‘high income’ status ‘stays’

The Prime Minister has issued another complaint to the World Bank against being cut off from low-cost funding to deal with the environmental crisis of global warming but even as it issued an apology the international financial institution again rebuffed the decades-long plea against being considered too well-off for critical development financing.

As Barbados and other Caribbean countries continue to battle the effects of climate change and natural disasters, Mia Mottley called on global decision-makers to reconsider their tiered approach in determining who gets concessional funding from some institutions to handle the environmental crisis.

She issued the call in a speech to the 2019 Understanding Risk Caribbean conference at the Barbados Museum on Monday, under the theme From Risk to Resilience: A Foundation for Action.

Calling for a “moral and ethical discussion” on the issue, Mottley charged that global politics and power relations have crept into the decision-making process.

She argued that Caribbean countries remained in a “war that we did not start, nor do we sustain”, adding that the income criteria to give countries funding without taking various risks into consideration was flawed.

The Prime Minister said: “The continued belief that countries can be graduated on the basis on middle-income status purely on GDP and precluded from access to critical funding… in the face of inherent vulnerability, has really to become a historic topic rather than a fight we are continuing to wage on a daily basis.”

Under the World Bank rules, Barbados is considered a high income country and therefore does not qualify for financing at favourable interest rates.

She continued: “I fully accept that the battle is being waged not at the level of the technocrats or management of international organizations, but it is being waged, regrettably at the level of capitals.

“This is unsustainable, and we have to determine that if we really want to be able to make progress against the battles that cause tremendous risks such that we can become resilient, then we need to start doing things differently and start recognising first and foremost that failure to act is largely because you do not believe that the problem is important enough to guarantee or require such action

Declaring that the foundation for action did not rest with Caribbean nations, Mottley said the rest of the world did not consider climate refugees an area of importance “because when it comes to people it becomes a no-no but when it comes to the movement of capital and investment it becomes highly accepted and desired by the majority of countries.”

Mottley said: “There is need for a moral and ethical discussion across the global landscape, and it is our intention that it is only when moral and ethical leadership is given, both at the national level and international level, that we will summon the courage to fight down these battles. Until such time, it is a form of idle entertainment for those who choose to watch.”

Pointing to the impacts of natural disasters and the uncertainty they bring, the Prime Minister said the change would require domestic and international political will

Mottley complained that Barbados found itself having to carry out infrastructure work at a cost that was highly prohibitive as the country battled with its economic challenges.

For example, she said, replacing the water infrastructure alone would cost the country close to $2.5 billion.

“With the 2,500 kilometres of pipe that we have, the majority of which has to be replaced, at a price that we are fighting, coming close to $1 million per kilometre, that it would be a mammoth task of virtually 25 per cent of our GDP to simply seek to replace the water infrastructure without reference to what we must invest in augmentation of water resources as we confront the reality of being a water scarce country in this world,” she said.

World Bank Country Director for the Caribbean Tahseen Sayed apologised that the World Bank could not provide concessionary funding to Barbados.

But said the financial institution continued to take a strategic approach in providing technical assistance when needed.

Sayed declared: “I am very pleased that we have been able to, from the World Bank side, bring in our support to you on technical advisory. I apologise that we have not been able to rise up to your request from the financing side.”

When asked later about the criteria used to determine who gets concessional funding without taking extremities and other factors into consideration, Sayed told Barbados TODAY that “internationally the topic has been raised by small states”.

“The question of looking at the income levels and then looking at it in a differentiated way is definitely on the table internationally, and I think this topic is going to come up in discussions at the international fora, which are going to be happening later in the year, but what will be the outcome I think there are too many partners involved for theWorld Bank to predict an outcome,” she said.