Mottley says CARICOM bonds have potential to unlock regional development

WESTERN BUREAU:

Barbados Prime Minister Mia Mottley is urging Caribbean nations to embrace CARICOM bonds as a new tool for development, giving citizens a direct stake in building a stronger, more resilient region.

“We are in a position to be able to offer the opportunity for the participation of CARICOM bonds to our citizens at rates of return that are competitive with private commercial banks but are still lower than the lending being offered to many countries on international capital markets,” said Mottley, while addressing fellow CARICOM leaders at the recent 49th CARICOM Heads of Government Meeting in Montego Bay, St James.

The initiative is aimed at addressing chronic underfunding of the CARICOM Development Fund, which supports disadvantaged countries and sectors within the region.

Mottley nonetheless acknowledged the current limitations, noting that it is unlikely that the accumulated funding would be enough to address the intended purpose.

“Even if every country in the region put money into it, it would still not be enough to finance disadvantaged countries, disadvantaged sectors, and disadvantaged regions, which are the consequence of any single market in a single economy,” she said.

As a consequence, Mottley is calling for leveraging regional liquidity and establishing international guarantee mechanisms to empower Caribbean people to “start to finance our own development”.

Highlighting another innovative solution, Mottley detailed Barbados’ success with regional debt swaps, which help finance critical projects without increasing debt.

“In the last six months, we have done significant work to advance, for the first time, a regional debt swap initiative,” she revealed.

DEBT SWAP INITIATIVE

Barbados has already completed two such swaps, one channelling funds into marine conservation through the Marine Sustainability Trust, and another supporting climate adaptation via the construction of a new South Coast sewage treatment plant. Both were achieved without raising national debt levels.

Looking ahead, Mottley announced plans for a third debt swap, this time targeting social sector investments, and she is inviting other CARICOM nations to participate, saying her ambition is to see the Caribbean becoming “the first in the world to have a regional debt swap directorate initiative”.

Mottley also pressed for financial instruments to include natural disaster and pandemic clauses, citing Barbados’ recent issuance of US$500 million in bonds with built-in provisions to pause both principal and interest payments for two years if the country faces a qualifying natural disaster.

She also underscored the urgency of climate resilience, pointing to recent flooding in Texas in the United States as evidence that no country is immune.

“None of us can escape the hands and touches of the climate crisis,” she said.

Calling for bold governance reform, Mottley challenged regional leaders to move from discussion to action.

“We must find the boldness to move into action, because without that our region will not be ready for the defence of small states,” she said.

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