US suspends Grenada’s debt

Grenada has signed a bilateral debt agreement with the United States as part of the Paris Club’s debt-service suspension initiative that provides for the island to consolidate and reschedule debt payments that were due between May and December 2020.

“Once in force, the agreement defers until 2022-24 the payment of more than US$320,000 in principal and interest due between May and December 2020 so that Grenada can focus on immediate pandemic needs,” said a statement from the US Embassy in the Caribbean country’s capital, St George’s.

The agreement which was signed on last week, implements the terms of the Paris Club-G20 debt-service suspension initiative, of which Grenada is a beneficiary.

Minister of Finance Gregory Bowen and US chargé d’affaires Karl Duckworth signed the agreement.

May 2020, Prime Minister and then Minister of Finance Dr Keith Mitchell welcomed the Paris Club debt-service suspension.

In March 2020, following the announcement from the World Health Organization that COVID-19 has become a global pandemic, the World Bank and the International Monetary Fund called on bilateral creditors to provide debt relief for countries like Grenada, suspending payments on loans and allowing them to use available resources to fight the pandemic.

“Grenada is deeply appreciative of the move by the United States to defer the amounts owed to that country. We commend their responsiveness to the debt-service suspension initiative which is crucial to the efforts by our country to redirect resources to mounting an effective response to the COVID-19 pandemic, and to fostering the early stages of recovery. The effectiveness of our efforts thus far is due, in large part, to the relief granted through this debt-service arrangement,” said Bowen, who took up the finance portfolio in October.

“At a time when so many in Grenada are impacted by the economic effects of COVID-19, the United States renews its commitment to Grenada and its people,” added Duckworth, who has seen at first-hand how the diminished number of tourists and students, along with the new COVID cluster, has affected the lives of Grenadians.

The Paris Club was formed in 1956 and is an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by borrowing countries.

The members of the Paris Club are the governments of Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, the Republic of Korea, the Russian Federation, Spain, Sweden, Switzerland, the United Kingdom and the United States.

CMC