Government seeks $25 million for Barbados to join CAF
Barbados will soon have access to highly concessional financing once it pays in its membership fee to the Development Bank of Latin America (CAF).
Minister of Finance Chris Sinckler made this announcement in the House of Assembly today while moving the passage of a resolution to approve the borrowing of the sum of US$25 million from First Citizens Bank Ltd to fund the initial deposit required for the Government of Barbados to become a “C” member of the Development Bank of Latin America (CAF).
Sinckler told members of Parliament that Government had taken the step to join the CAF after major lending agencies, such as the Inter-American Development Bank and the World Bank, had graduated Barbados based on its standard of living.
The St Michael North West MP further explained that following the financial and economic crisis of 2008/2009, Barbados was among small developing economies which were finding it difficult to access concessional financing from the open market.
Sinckler said because the island had shown rapid development over the years, it was seen by lending agencies as a rich, middle income country.
“We know that that is not true. Barbados is not a rich country by any stretch of the imagination. But the perception, because of our relatively high Gross Domestic Product, per capita income and other things associated with such, people believe that Barbados should not get access to highly concessional financing,” he said.
The Minister of Finance noted that in the 1970s and 1980s the situation was much different and Barbados was able to access financing from the World Bank and the Inter-American Development Bank to invest in road building, build schools and other development projects.
However, coming into the 1990s, the island was graduated because of its success.
The Minister of Finance told parliament that CAF, which has capital resources of US$10 billion, was basically a regional bank which understood the island’s peculiar problems.
He pointed out that even though the institution did not have triple A ratings at this time, it was a rapidly growing institution with gave member nations an opportunity to put their cases at meetings.
The resolution was passed this evening.