Concerns about Government’s use of the Catastrophe Fund as part of the COVID-19 economic recovery package have been dismissed as much ado about nothing by Government’s Chief Economic Advisor, Ambassador Dr Clyde Mascoll.
He contended that the need for the $50 million fund, designed to be triggered in the event of a natural disaster, was now negated by the natural disaster clause embedded in recently restructured foreign and domestic debt. He argued that in the event of a natural disaster, the triggered clause would free up $1.7 billion and therefore the country would be more than covered in the event of a major hurricane
“When the Catastrophe Fund was established, there was no debt restructuring that included a natural disaster clause. If Barbados has a hurricane, and we hope not, the disaster clauses are triggered in our debt in such a way that the Government will be relieved of having to service debt for two years. That includes the delaying of payment on interest as well as the principal on the debt. This would unleash about $1.7 billion for the Barbados Government.