Government is planning a $1.2 billion debt-for-social swap in December, with savings from the transaction to be directed towards tackling Barbados’ non-communicable disease (NCD) crisis, including childhood obesity.
Minister of Finance Ryan Straughn said the initiative, described as the largest debt swap in the country’s history, is expected to generate savings of about US$150 million for investment in public health programmes.
Addressing Scotiabank’s 70th anniversary gala at the Wyndham Grand Sam Lord’s Castle on Friday, Straughn highlighted the urgent need to protect future generations from health problems caused by lifestyle choices.
”We recognise that we have an NCD crisis in the country, and we have to address it,” the finance minister stated.
“Forty-two per cent of our children are either obese or overweight. If our economy and our future are to remain secure, we have to change that percentage. We must ensure that our young people do not end up living lives that are unhealthy and less productive than they should be.”
NCDs cause about 83 per cent of adult deaths in Barbados, while the country also loses around $147 million each year in workplace productivity due to chronic illnesses. The government spends between $375 million and $825 million annually treating NCDs.
This initiative, the largest debt swap in the country’s history, is expected to save about US$150 million. These savings will go toward public health programmes that encourage healthier lifestyles, better nutrition and lower long-term medical costs for taxpayers.
The restructuring effort is backed by a coalition of international financial institutions, including the Caribbean Development Bank (CDB), the Development Bank for Latin America and the Caribbean (CAF), the Inter-American Development Bank (IDB), and the World Bank.
Financial institutions Scotiabank and CIBC have been selected as co-leaders to execute the transaction.
”I am happy to announce that Scotiabank has been chosen as a co-leader to execute this transaction together with CIBC,” Straughn announced.
“This debt swap will allow us to transform Barbados in a very significant way, unlocking savings to aggressively focus on changing the behaviours of Bajans regarding how we eat, how we move, and how we live.”
In this kind of debt swap programme, countries buy back some of their most expensive government bonds from the open market. After cancelling these bonds, they issue new ones at much lower interest rates. This is possible because development banks provide credit guarantees, which reduce the risk for buyers of the new bonds.
The government pointed out that the NCD crisis is not just a public health issue, as it also puts a major financial strain on families already dealing with high living costs.
The newly redirected funds will focus on community programmes, workplace wellness efforts, and public education on reducing salt, sugar and unhealthy foods.
”The financial decisions people make for their families are important not just to individual household budgets, but to the bottom line of the entire country,” Straughn added.
“Cost of living is already high. If we work together as one family, as one Barbados, we can achieve this shift.”
(RR)
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