Government holds talks with the Arabs
The cash-strapped Freundel Stuart administration appears to be exploring the possibility of getting financial assistance from the Arabs after all.
Almost ten months after he wrote to the Prime Minister suggesting that Barbados take up an offer of a low-interest loan from the oil-rich Arabs, Minister of Agriculture Dr David Estwick has reported that officials from the United Arab Emirates (UAE) have been in talks with the Democratic Labour Party (DLP) administration.
He made the disclosure last night as he responded to a question at the DLP’s St Lucy branch meeting.
“A team of persons from the UAE, led by persons from Abu Dhabi and Dubai, were in Barbados and they had fruitful discussions and those discussions are ongoing,” he said.
Estwick did not disclose when the discussions were held or what had been the outcome.
The Cabinet Minister had written to Stuart in January this year, presenting alternative fiscal measures to get the country out of its economic problems.
Estwick told the Prime Minister that, the previous month, he held talks with UAE officials who expressed “very keen” interest in working with Barbados towards restoring growth, and that a one-time opportunity was available for Government to negotiate a sinking fund to wipe out the entire national debt of US$5 billion.
“What the Abu Dhabi and UAE governments propose to do, is to establish a sinking fund to retire the national loans when they become due. They have proposed a US$4 billion fund at a fixed interest rate of two to four per cent, over a 30-year period. These terms are negotiable,” Estwick’s letter stated.
“If you compress all of the loans together and create one sinking fund, when loan payments are due on the various loans, they are paid from the single collective sinking fund and not from current revenue.”
The former Minister of Economic Affairs had argued that if the country was successful in negotiating the sinking fund to cover the entire national debt, the UAE would deposit US$5 billion in a fund in a location agreed with the Government of Barbados.
Estwick had advised Prime Minister Stuart that the traditional use of the International Monetary Fund, World Bank and Inter-American Development Bank as sources of fiscal and debt support and development capital, caused governments to rely too much on the Bretton Woods institutions model of assistance.