Over the next six months, the Government will be establishing a legacy fund to build the island’s capacity to finance climate resilience.
Prime Minister Mia Mottley gave this indication on Wednesday as she declared that Barbados was “still in transformation mode” and the time had come to increasingly focus on tackling climate crises.
She said it was also critical that Barbados move beyond using only gross domestic product to measure economic growth.
Mottley, who has successfully launched the Bridgetown Initiative and included natural disaster and pandemic clauses across Government debt stock, explained that a major component of being able to deal with the climate crisis was building financial capacity.
“Financial capacity is critical. It is the oxygen,” she said. “In a climate-resilient world, just the pure focus on GDP will mean that we are looking to put all of our eggs in one basket. That cannot work.”
Pointing to the recent decision by the Central Bank to approve US$40 million to be invested by the National Insurance Scheme overseas to diversify its investment portfolio, Mottley noted that many of the businesses that survived over the past decade had investments outside of Barbados.
“If they were reliant only on what they had here, they would have been in difficulty and might not have made the journey successfully. The country, therefore, must be no different. The Government will be moving to establish a legacy fund,” Mottley announced at the renaming ceremony of the historic Mutual Building on Lower Broad Street, Bridgetown, to The Dodridge Miller Economic and Justice Building, in honour of a long-standing executive of Sagicor, the owners of the building.
She did not give details of the legacy fund, but explaining that a lot of the Government’s assets were undocumented and this fund would help to change that, she suggested that the earnings would be used in the fight against climate change.
A legacy fund uses investment earnings to meet certain community needs without touching the principal. This allows the fund to grow over time, generating more funding.
“Dodgridge and the rest of the Growth Counsel have been brought in to help us as well, with respect to our being able to monetise a lot of these assets or to at least have them available for securitisation. A country with a limited asset base cannot afford to ignore whatever it owns, especially as we seek to transform this nation and to transform it, it requires financial capacity. Financial capacity requires securitisation more often than not, of the assets that we have,” the Prime Minister said.
“So that the establishment of the legacy fund will be a major focus over the course of the next six months because if we don’t do that, then we will be going into this war with limited resources rather than using all that we have within our arsenal.”
(MM)
