by Linda Straker
Secretary General of CARICOM, Edwin La Roque has disclosed that the regional body welcomes in principle the idea of debt swapping. As a result, a proposal from the Economic Commission for Latin and the Caribbean (ECLAC) is down on the agenda for the 38th Regular Meeting of the Heads of Government which opens in Grenada on Tuesday.
“It’s a proposal that was first raised by ECLAC when we meet in Barbados. It is one in which we welcome in principle, basically our region in the whole, member states are heavily indebted, and that debt is occasionally in large measures by natural disasters, whether they be severe climatic events as of recently, many of countries are repairing and rebuilding the same infrastructure over and over because of the destruction by bad weather and also economic externalities,” he told journalists on Monday during a news conference.
“The proposal has been put forward that some arrangement be put in place with the debtor countries to allow for that debt to go into some kind of fund which can be used for climate change and other national issues,” he said.
During the recent Caribbean Regional Climate Outlook Forum, Ralph Gonsalves, Prime Minister of St Vincent and the Grenadines disclosed that natural disasters related to climate change are increasing the national debts of most CARICOM member states. “Borrowing to assist with the recovering and rebuilding from a natural disaster is increasing the national debt; in my case, natural disaster-related debt is as high as 15% of GDP,” he said.
La Roque told journalists that the ECLAC proposal is a general proposal that is not related to the debt swap proposal from Germany, which is being championed through The Nature Conservancy — the leading conservation organisation working around the world to protect ecologically important lands and waters for nature and people.
In the May 2015 Blue Growth conference held in Grenada, Robert Weary, Senior Director Product Development at The Nature Conservancy, said that the debt swap initiative for nature through his organisation involves countries cancelling debt against another, and the money used toward environmental development projects.
He had explained that debt swapping is not debt relief but debt re-direction. Weary said that through the initiative, his organisation would negotiate to have the debt purchased by a 3rd party, which will then be transferred to a local trust established in accordance with the relevant national law.