Straughn pledges details on $320m debt swap savings

The government will set out in Parliament early next month how it plans to spend an estimated $320m in healthcare savings from its proposed $1.2bn debt-for-social swap, Finance Minister Ryan Straughn has said.

Straughn addressed reporters’ questions about how the projected savings are calculated, how citizens will be able to monitor spending and what measurable outcomes have emerged from previous debt-for-nature and debt-for-climate transactions.

He said a House of Assembly resolution scheduled for the beginning of December would seek approval for the transaction and provide a detailed breakdown of how the funds would be spent.

“When we do the resolution in a couple of weeks’ time, we will go through all the details and outline all of the things that we will be doing and putting the money towards,” Straughn told journalists, noting that while the overall allocations had already been determined, the specific commitments would accompany the parliamentary debate.

Minister of Finance Ryan Straughn (Photo by: Ricardo Roberts)

“What we will do in a couple of weeks’ time, the beginning of December, is to bring back the actual swap resolution that gives the approval for the actual operation to take place, and at that point, we will outline exactly where the $320m will go, project by project.”

The Ministry of Finance would use the same accounting framework established for previous debt-for-nature and debt-for-climate conversions to enable Barbadians to track spending, Straughn said.

Specific budget categories would be created in the next financial year’s Estimates of Revenue and Expenditure to identify the allocations to lawmakers and the public, he added.

He said: “In the Ministry of Finance, we will create — as we did with both the debt-for-nature swap as well as the debt-for-climate swap — the line items there that are identified with respect to where the monies will go, either recurrent or capital.

“So that will come in next year’s budget.”

The proposed $1.2bn domestic transaction, which involves buying back existing Series B bonds and reissuing them under specialised multilateral financing arrangements, is designed to lower debt-servicing costs and redirect interest savings into social infrastructure.

While reserving the full project list for December’s parliamentary sitting, Straughn outlined the priority areas set to benefit from the savings. A substantial portion would address chronic non-communicable diseases (NCDs) and mental health challenges.

“A lot of it is towards NCDs and mental health. Probably about US$120m [$240m] or something like that goes towards that,” Straughn said, highlighting the administration’s emphasis on preventative, community-based healthcare and addressing public health concerns such as childhood obesity.

The savings would also fund major infrastructure upgrades at state medical and care institutions, including “the QEH [Queen Elizabeth Hospital] and the geriatric hospital and a few other rehabilitation centres”, the finance minister said.

Asked about measurable results, disbursements and completed projects from Barbados’ previous debt-for-nature and debt-for-climate swaps, he said their transparency model would form the basis of the proposed health-focused transaction. He deferred a detailed statistical account of past disbursements to the forthcoming parliamentary presentation.

Barbados gained international recognition for its 2022 blue bond debt-for-nature conversion, which channelled savings into marine conservation, and its debt-for-climate resilience swap aimed at upgrading water and sewage infrastructure.

(RR)