Canadian PM reaffirms commitment to Caricom states in ‘access to financing’ fight

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Canadian Prime Minister, Justin Trudeau
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By Orville Williams

[email protected]

Canadian Prime Minister Justin Trudeau has reaffirmed his government’s continued support to Caricom member states, including Antigua and Barbuda, in breaking down the barriers that hinder access to financing.

This declaration came yesterday during a forum on access to finance and global financial architecture reform featuring PM Trudeau, Canadian Deputy Prime Minister and Finance Minister Chrystia Freeland, Caricom Secretary-General Dr Carla Barnett, and Caricom leaders who gathered in Ottawa for the first Canada-Caricom Summit to be held on Canadian soil.

“[Canada] is committed to reforming and reimagining the international financing architecture,” Trudeau said.

“It’s why we support the evolution of the multilateral development banks and international financial institutions, so they are fit for purposes in a modern, interconnected world, with very different challenges than those envisioned in the years following World War II by the Bretton Woods Institutions [the International Monetary Fund and World Bank].

“Canada supports efforts for reforms, including using their capital more efficiently, making concessional financing more available [and] mobilising more private capital, because we know public financing alone isn’t sufficient.

 “Canada has joined international partners in calling for major creditors, both public and private, to offer Climate Resilient Debt Clauses (CRDCs) that pause debt repayments for vulnerable countries in times of crisis or catastrophe, and Canada will now offer CRDCs in all new sovereign lending,” he told the Caribbean leaders.

The statements come amid sustained complaints from regional leaders, including Antigua and Barbuda’s Prime Minister Gaston Browne, Barbados Prime Minister Mia Mottley, and Jamaican Prime Minister Andrew Holness.

These leaders, along with several others, have bemoaned the pressure on Caribbean countries with regard to their indebtedness, unstable economic productivity over several decades, their exposure to natural disasters, and the financial fallout from the Covid-19 pandemic.

However, the issue of international financial institutions such as the World Bank using Gross National Income (GNI) per capita in structuring lending programmes is perhaps the most pressing issue at the moment.

PM Browne has been perhaps the most vocal in calling for adoption of the Multidimensional Vulnerability Index (MVI) – an alternative that would see small island states and other countries (particularly those worst affected by climate change-related natural disasters) being assessed based on their vulnerabilities, and those vulnerabilities being used as criterion for access to and allocation of concessional funding.

PM Mottley’s ‘Bridgetown Initiative’ makes similar appeals, including calling on the IMF to suspend surcharges for two to three years and restore “enhanced access limits” that were established during the Covid-19 pandemic for the Rapid Credit Facility (RCF) and Rapid Financing Instruments.

“Our countries have become highly indebted, not because of corruption of profligacy, but because of the complexity of governance that we face, ranging from environmental threats to the consequences of a transition to a liberalised trading environment over the last 30 years that saw the diminution of our agricultural and manufacturing sectors, when others could equally sustain theirs through mechanisms that were grandfathered.

“We have maintained that the one-size-fits-all prescription and the victimhood of rules that are imposed on us are not of our own making and cannot continue,” Mottley said defiantly.

The Barbados PM also noted the addition of Antigua and Barbuda and Belize to the European Union’s (EU) tax haven blacklist as evidence of not enough efforts being made to support small island states through developmental challenges.

“The consequences of this blacklisting continue to hurt our countries, because effectively, companies will de-risk as a result of the enhanced due diligence that must be put in place in order for them to continue to do business.

“Similarly, the correspondent banking issues continue to bedevil too many of our countries as if we were financial lepers or pariahs…the absence of the international financial institutions, the G7 and G20 countries to recognise the disproportionate consequences on our people is simply unacceptable,” she added.

Antigua and Barbuda is being represented at the Canada-Caricom Summit by Ambassador to the US and the Organization of American States (OAS), Sir Ronald Sanders.

The summit is scheduled to continue today with a discussion on trade and investment, before it wraps up in the early afternoon with a press briefing.

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