BUSINESS MONDAY: ‘Debt service initiatives not enough’

BARBADOS and other developing countries have been told that the debt service initiatives put together by the Group of 20 industrialised nations are not enough to help small indebted countries.

This is the view of Richard Kozul-Wright, head of the Division of Globalization and Development Strategies at the United Nations Conference on Trade and Development (UNCTAD) in Geneva.

Speaking to the local media from his office in Geneva, Kozul-Wright said that an amount of between US$5 billion and US$10 billion, which the G20 came up with, does not go far enough to help these countries deal with their growing indebtedness.

He said that the current debt burden of Barbados and Caribbean countries represents a major concern for them and that the G20 have to do better.

“The debt proposals have been kicked down until the end of this year, but they are not enough given the scale of the debt situation of many developing countries,” the UNCTAD official said.

“The response however by the G20 is pitiful and the multilateral system has neither the mechanism nor the ambition to deal with the problems facing developing countries,” he maintained.

Barbados’ debt-to-GDP ratio, which was lowered from 157 per cent of GDP in 2018 to 119 per cent of GDP ratio by December 2019, has spiked again as more external borrowings were undertaken from multilateral institutions, along with drawdowns from the International Monetary Fund.

Calling for a reform of the international financial architecture, Mr. Kozul-Wright insisted that there is a need for new mechanisms for tackling the debt of developing countries.

Barbados will later this year host the 15 UNCTAD conference virtually.