The World Bank will this week consider a request from Barbados for US$100 million in exceptional financing.
Minister in the Ministry of Economic Affairs and Investment Marsha Caddle made the disclosure during Tuesday’s sitting of the House of Assembly, during debate on the Companies (Economic Substance) (Amendment) Bill, 2021.
Barbados does not qualify for loans from the International Bank for Reconstruction and Development (IBRD) – the World Bank’s lending arm which offers loans to middle-income developing countries –, given that it was graduated based on GDP per capita.
However, the World Bank Group launched exceptional IBRD financing to respond to the COVID-19 pandemic, for which the Government applied to support Barbados’ response to the COVID-19 crisis and to promote the post-crisis economic recovery.
“On Thursday of this week, we will go to the Board of the World Bank to take an operation for what we call exceptional financing in the amount of US$100 million,” Caddle told Parliament.
“We had to make a strong case, even before COVID, that the basis on which you are graduating us doesn’t make any sense. And so, we’ve put that operation together and that goes this week to be considered by the Board of the World Bank.”
In a Program Information Document prepared last year, the World Bank said complementing support from the International Monetary Fund and other official creditors, exceptional access to IBRD financing would help Barbados to partially cover its financing needs in FY2021 and to support the country’s return to market-based financing over the medium term.
Meanwhile, Caddle pointed to the recent proposal by the G7 nations to set a global minimum corporate tax at 15 per cent as another blow to countries like Barbados.
“The world is set on July 9-10, to endorse the deal that the G7 endorsed…with a view to it being implemented in October of this year. So, while we know that the 15 per cent minimum tax may not hold, we fully expect that some number will apply and that by the middle of July we will have an idea of what the G20 wants to do,” she said, adding that the move will put countries like Barbados “in the path of further deprivation”.
“One would think that it was a concerted effort to make countries that are small, invisible, to make countries that are small, now non-existent. That seems to be the mood and the climate of the international development community, even in the heart and depth of crisis,” Minister Caddle lamented. (DP)