Barbadians and observers of this island’s governance were left in shock at revelations that the past government that has been cash-strapped in the last 10 years of its rule had left some US$136 million in soft loans undrawn.
By the time the past administration of former prime minister Freundel Stuart lost power on May 25 the government’s foreign reserves had dwindled to Bds$ 440 million (Bds$1 = 50 cents US), overall national debt at Bds$15 billion, and current arrears at more than Bds$1.71 billion.
This low foreign currency reserve and overwhelming debt were coupled some 23 international credit rating downgrades over the past 10 years that had rendered the administration unable to secure loans on the global market at low repayment terms.
With their country in such dire straits Barbadians were stunned to learn during a visit to this island last week by Inter-American Development Bank President, Luis Alberto Moreno, that the past administration had left the equivalent of approximately Bds$271.4 million lying idle in that bank awaiting withdrawal, for years in some cases.
Speaking on information gleaned from her talks with Moreno, Mottley said that some of the approved loans were not acted upon at all and others only partially drawn down, both actions which put the monies that are still available in danger of cancellation by the bank.
“There were five loans that were cancelled with the bank between 2016 and 2017. I am not sure how a country that needs concessional funding can engage in the luxury of having loans cancelled, Mottley reported while delivering a joint statement with the IDB president.
“We have a loan portfolio with the IDB of U$191 million, and US$135.7 million of that remains undisbursed in spite of the fact that many of these loans have been in place for three, four or five years.
“As a result, there are at least three major loans that are at risk that we are going to have [to] undertake with the bank to try to put them in good shape again, even if it means some tweaking,” she said.
She said her new government will now scamper to put all the paperwork in place to save a human and social development loan signed since September 2015, that has 90 per cent of it undisbursed. Then there is a US$34 million loan for the deployment of cleaner fuels programmes and renewable energy which was signed almost two years ago, that still has US$32.2 million not disbursed.
“There is the road rehabilitation programme, which is US$25 million, and US$24.7 million remains undisbursed. In other words, we spent US$300,000 even though that loan was signed in November 2015, and I am sure Barbadians would be surprised given the state of our roads today,” Mottley said.
One of the cancelled loans, Bds$47 million financing for housing improvement in selected working-class areas of Barbados had been the source of many complaints by Barbados Labour Party members when in opposition.
That money was available since 2008 to improve the circumstances of targeted areas such as Greenfields, Garden Land, Cats Castle, and Allen View.
In 2017 BLP Member of Parliament Cynthia Forde had argued that government’s negligence had caused that money to be lost to Barbados.
“To this day those people remain living in the same conditions, no proper roads leading to their houses, no upgrades to the properties they’re in, no kiosks and other projects that would have helped them to generate employment,” Forde had said.
For that project, IADB had approved an $80 million Housing and Neighbourhood Housing Upgrade Programme in January 2008 with the intention of supplying $60 million and the government of Barbados contributing $20 million in counterpart funding. The Ministry of Housing and Lands was the named executing agency.
But according to the hemispheric financial institution’s report dated January 2017, only $13 million of its money was used and the remaining $47 million was cancelled.
Barbadians are now hoping that the three salvageable loans Prime Minister Mottley said she will go after, will indeed be saved and the island gets to benefit from this soft financing.