by Linda Straker
- Bilateral Debt Agreement with USA to consolidate and reschedule debt payments
- Minister for Finance Gregory Bowen and US Embassy Grenada Chargé d’ Affaires Karl Duckworth signed
As part of the Paris Club Debt Service Suspension Initiative (DSSI), Grenada has signed a Bilateral Debt Agreement with the USA that provides for the island to consolidated and rescheduled debt payments that were due between May and December 2020.
“Once in force, the agreement defers until 2022-24 the payment of more than $320,000 in principal and interest due between May and December 2020 so that Grenada can focus on immediate pandemic needs,” said a news release from the USA Embassy in Grenada.
The agreement which was signed on Friday, 18 December 2020 implements the terms of the Paris Club-G20 Debt Service Suspension Initiative, of which Grenada is a beneficiary. Minister for Finance Gregory Bowen and US Embassy Grenada Chargé d’ Affaires Karl Duckworth signed the agreement.
In May 2020, Prime Minister and then Minister of Finance, Dr the Right Honourable Keith Mitchell welcomed the Paris Club Debt Service Suspension Initiative (DSSI), which will grant the country suspension of debt service between May and December 2020.
In March 2020 following the announcement from the World Health Organisation 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 IDA countries like Grenada, suspending payments on loans and allowing them to use available resources to fight the pandemic. This was a subsequent endorsement of this by the G20 and Paris Club.
“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 Minister 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,” said Duckworth who has seen first hand how the diminished number of tourists and students, along with the new Covid cluster, has affected the lives of Grenadians.”
“The United States is leading the effort to combat Covid-19 and its threat to global health and security,” added Duckworth. “Addressing debt transparency and sustainability is a priority for the United States to enable the long-term financial stability of Grenada and other countries as they face the difficult choice of servicing debt or responding to urgent health and economic needs.”
The release said that in April 2020, the United States helped lead the G20’s efforts to establish the Debt Service Suspension Initiative, which provides a suspension on official bilateral debt service payments by low-income countries so they can channel savings toward Covid-19 responses.
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 borrower 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 of America.