Barbados gov't appoints London-based group as financial adviser

The Barbados government says it has appointed the London-based White Oak Advisory Limited to act as its financial advisor in the context of the debt restructuring process it announced earlier this month.

"The financial advisor is in the process of establishing initial contacts with affected creditors, and is expected to soon commence creditor engagement on the basis of the medium-term macroeconomic projections to be finalised by the government in the coming weeks," the government said in a statement.

Last weekend, Prime Minister Mia Mottley announced that her new government would suspend payments due to domestic and external creditors and that domestic creditors would also be asked to roll over principal maturity until a restructuring agreement is reached.

The state of the Barbados economy had been a major issue in the campaign for the May 24 general election in which Mottley led her Barbados Labour Party (BLP) to a clean sweep of all 30 seats in the Parliament, defeating the incumbent Democratic Labour Party (DLP) that had been in power for the past 10 years.

Mottley told Barbadians that the "public debt as a proportion of our national income is being regarded as high as 171 per cent of GDP (gross domestic product),the third highest in the entire world," she said, noting that only Japan and Greece are above Barbados.

She said every year Barbados spends BDS$800 million in interest on the debt and this year, the island will spend a further one billion dollars on meeting promises to pay back what was borrowed.

"Our interest bill alone is equal to the central government's entire wages and salaries bill. In fact our interest bill is about BDS$15 million or higher."

The government statement announcing the appointment of White Oak Advisory, which promotes itself as "an independent financial advisory firm providing specialist, high-level, and conflict-free advice to governments and other clients on matters relating to sovereign finances and sovereign debt," said all queries relating to the announced debt restructuring should be directed to the financial adviser.

The government said that it has also held discussions with regional and international rating agencies since last week's announcement, and it is expecting that Barbados' credit rating will shortly be adjusted down to selective default, as is customary when comprehensive debt restructurings are announced.

On Tuesday, Prime Minister Mottley met with a team from the International Monetary Fund (IMF), led by Bert van Selm.

The government said that the IMF delegation also held discussions with the Governor of the Central Bank of Barbados, Cleviston Haynes, other senior government officials, as well as representatives from the private sector and the labour movement.

"It is expected that during this visit the IMF mission will update itself on the current economic and financial situation in Barbados, ahead of discussions with the authorities, over a potential programme in the coming weeks," the statement said.

- CMC