PM seeking world leaders support against World Bank loan changes
April 19, 2024

PM seeking world leaders support against World Bank loan changes

Prime Minister, Ralph Gonsalves, true to his word, has written to leaders around the world,drawing their attention to changes being made by the World Bank, which will adversely affect small developing states like St Vincent and the Grenadines (SVG), and many others.

Appearing on NBC Radio on March 20, 2024, the Prime Minister referred to a document from the World Bank indicating that its International Development Association, would be changing its terms and conditions of loans which SVG and some other countries obtain loans making them less favourable to these borrowing Member States.

He said then the Institution was doubling its interest rates and shortening its debt repayment window and promised that he was “going to fight them” and would “write every single leader in the world about this”.

On NBC Radio on Wednesday, April 17, 2024, Dr Gonsalves said this change by the World bank is expected to become effective from May next year and will affect this country’s effort to mitigate against the effects of climate change.

While the World Bank’s Spring meeting is ongoing in Washington DC, the Prime Minister is lobbying support against the planned move.

“I have written every single head of government in the world,” he said on Wednesday.

Letters also went out to CARICOM and the OECS as well as the secretary general of the United Nations.

These letters also include the correspondence from the IDA, which speaks to the proposed changes.

Dr Gonsalves noted that the move by the World Bank will affect places which are “the most vulnerable countries in Mother Earth.”

By removing some of the concessionary terms the prime minister expressed the view that “IDA is bent on making life, living and production more difficult for developing countries, especially those in the Caribbean”.

He suggested that instead of taking this measure, the developed countries in IDA should increase their contribution to the international grouping.

When these changes come into effect next year, loans which States such as St Vincent and the Grenadines obtain from the World Bank, “will become less favourable,” the prime minister pointed out.

“You can’t build adaptation and mitigation to climate change on the basis of money.”

He said while the proposed new terms will still be better than for other loans on the market, they will not be as good as they are now.

The prime minister noted as well that the people of SVG are not responsible for climate change and make no contribution to its harmful effects; however money is needed to help mitigate its effects by constructing sea and river defences in vulnerable communities.