Sworn into office on May 25, Mia Mottley, the island-nation’s first female Prime Minister, soon discovered that the financial health of Barbados was worse than initially reported.
After, a brief celebration of a sweeping victory by the Barbados Labor Party, the new PM, Mia Mottley was faced with a serious economic crisis on the island. According to the Financial Times, the debt-to-GDP ratio is the fourth highest in the world after Japan, Greece and Sudan.
Currently, Venezuela, a country in dire economic distress and in the midst of a food shortage, has less debt-to-GDP than Barbados.
“Our interest bill alone is equal to the central government’s entire wages and salary bill,” explained Mottley.
Following the financial reveal, she says that her immediate focus is to tackle the 15 billion Barbadian dollars (US $7.5 billion) in debt left by the previous administration.
With a coming hurricane season and issues of pension creating more distress, Mottley invited the International Monetary Fund to negotiate a debt restructuring package.
As reported by Barbados Today, most Barbadians expressed favor, though a few voices are concerned with repayment plan. “Normally when governments ask the International Money Fund for help, they have to abide by certain rules,” opined Gharryn Parris in a BT interview.
On Tuesday, the opening of Barbados Parliament commenced. In the near future, moves toward of austerity measures are expected. For now, Mottley announced that she is suspending payments due on debts owed to external commercial creditors.