The Barbados government has sought to give pensioners the assurance that heir interest would not be swept under the carpet as a result of the debt restructuring exercise as part of the efforts to revitalise the ailing economy.
“To the pensioners of Barbados, I got your back, hold tight, I got your back,” Prime Minister Mia Amor Mottley told a branch meeting of her ruling Barbados Labour Party (BLP) on Sunday night.
Last month, the government’s special advisor on the economy, Professor Avinash Persaud, said a Barbados’ debt restructuring is the way back to the path of stability.
Last Friday was the deadline for holders of treasury notes, treasury bills and debentures to accept the debt restructuring proposal.
The senior technical advisor to the Barbados government, Dr. Kevin Greenidge, said that the government has recognized that the terms were difficult ones, as individuals and pensioners were being asked to stretch out the repayment of their debt to 15 years, and accept reduced interest rates.
“I think people see the default as saying, finally, you are going to get your act together and that default is the route to credibility. The default is the platform that puts us back to a sustainable position. I think bondholders ultimately will view this as the credible path because where we were before was just not credible,” he said, acknowledging that everyone in Barbados is suffering.
Government recently announced that it had launched an offer to exchange the vast majority of Barbados dollar-denominated debt it owed and certain public sector obligors for new debt instruments.
Treasury Bills, treasury notes, debentures, loans and bonds owed by the Government, loans and bonds owed by state-owned enterprises and other entities that receive transfers from the state budget and certain arrears owed by the Government and its public sector are included in the exchange offer or affected debt.
Barbados recently entered into a US$290 Extended Fund Facility (EFF) with the International Monetary Fund (IMF) as the island seeks to revitalise an ailing economy.
Prime Minister Mottley told supporters that she could not have addressed earlier the concerns raised by pensioners because of legal advice.
“The lawyers advised me from early that you cannot do much to be able to deal with the pensioners prior to the close of the debt exchange. Well the debt exchange closed on Friday, it is now my turn to help the pensioners of Barbados.”
She told the meeting that she had been receiving letters of concern from senior citizens, some as old as 90 years, and that her government, which came into office in May this year, would look to assist those pensioners most vulnerable.
“We accept that for persons who are 75 or 80 or 85 that they can’t see easily that they are going to live another 15 years and therefore what we will do is to work over the next few weeks to seek out those persons who are particularly in that position.”
She said that those elderly persons who need cash in the short term that can be assisted, while those who don’t need cash in the short term but are happy to get it in the medium term can hold the instruments.
Mottley said her office was now going through the process “to be able to see the numbers and make the judgement as to what we can afford and to make sure that those persons who are at the end of the days of their lives can live it out in dignity”.