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PM Mia Mottley’s Keynote at the Launch of the Report

Hon Mia Amor Mottley, Prime Minister and Finance Minister of Barbados, delivered this keynote speech at the launch of the report “Debt Relief for a Green and Inclusive Recovery”

This is the transcript of Barbados Prime Minister Mia Mottley’s speech delivered at the launch of the report “Debt Relief for a Green and Inclusive Recovery“. The transcript is not official – please listen yourself at the recording.

Thank you for that very kind introduction, Stephany, and also for your invitation to participate in this important forum and to share my thoughts on a most timely topic. I trust that it will add to the discourse that is occurring globally, but more importantly, that you get an insight into the challenges faced by us in small island developing states.

Covid has been an enormous leveler. Let us make no mistake about it. And they say, as we know, pride cometh before the fall. Previously, highly considered countries have been brought low by poor policy choices with unfortunately tragic consequences. Many small countries have shown a torch, but this is no time for hubris. There is much too much at stake and plenty left to go wrong. There is also much to learn from as we try to improve the odds for the best possible outcomes.

Good policy choices in an emergency do not happen by accident. They are a result of design. The design of the decision making process. Who makes the decisions? On what grounds? Who scrutinizes that decision? Many of the missteps that countries have made have been caused not by unlucky choices, but by decisions that arose from a flawed decision making process.

One of the lessons I have learned is that you shouldn’t advise yourself when making a significant decision and a public health emergency, public health experts need to be at the center, not sidelined. We need to arm them with the greatest amount of up to date information and the least amount of distraction from the primary task of saving lives and improving the quality of life. They need to explain their decisions and allow others to scrutinize and test them. And they need to be responsive to new facts.

If a public health response becomes a party political battle front, if the public believes you are compromising their health to favor particular economic interests, then, my friends, the battle is lost. And that underscores the importance of constant, honest communication with the public. Public health experts need to be the mouthpiece of public health policy to not always, but much of the time. We should not use public health officials as props as you sometimes see, but they should be there as key decision makers. Untap to explain what is happening and why. Pandemics are as much, my friends, about social psychology as individual morbidity. Limiting the impact of the pandemic is fundamentally about changing people’s behavior, and that requires credible, trusted communication.

Another lesson, of course, is that unprecedented times require unprecedented responses, not responses boxed in by habit or past precedents or fear of making mistakes or indeed fear of the unknown. Be bold and be ready to change course if the facts require it. The way to make mistakes, harm the country least, is not to fear them, but to make them in an attempt to respond well and be quick to identify when you have made them, admit them, learn from them.

And we’ll again, as we would say, the biggest mistake of all of all today is not to act. And a critical lesson is that in facing this all-consuming challenge, a challenge to test your mettle like no other, a challenge that allows no time for rest or no time to regroup, it is vital to recognize that this challenge yields opportunities, opportunities that may not come again, opportunities that must be grasped now today.

This is why we have taken this moment to launch an unprecedented initiative to green our tourism industry, to transform our tourism industry, to make it deliver more value, more sustain more sustainably to our community. We need them to retrain. We need them to retool all who work in the sector, all from the maid to the manager. This week, what visitors are paying for in that industry is not exploiting our natural resources, not a more massive load on a fragile ecosystem, but indeed a quality experience, superior service and a safe place to be. And there is a limit to how much you can do, how much you can do all of that when the hotel full, when guests are demanding and when everyone is doubling up on shifts. So that now is the moment to do all of these things that can make us come back fitter and better when the industry is in full motion.

Again, a critical part of our COVID response has been in that industry and income replacement program where we are investing in firms to provide the cash to pay 80 percent of the wages if they retain and bring back the workers linked to retraining and retooling of the sector. The program works with our separately resourced National Transformation Initiative, where we will undertake the cost of a massive retraining effort for the industry. We started the program a month ago and so far 44 tourism firms have applied, covering just over 2000 workers, equivalent to a quarter of the number working directly in the hotel sector.

There are signs of recovery, but with a second wave hit in many of our source markets hard in the North Atlantic countries, we know that this is a road with twists, with turns, and we expect this program will end up covering more and supporting far more than even they realized at the inception. This time of pause and acute uncertainty in the industry is also the time to refocus and reshape our sectors infrastructure and to ensure that it is modern, that it is efficient, and that it is green. And so for those firms participating in the employment re-engagement program, we will also invest in them separately to fund a green investment plan.

We have identified as priorities plans that allow tourism firms to switch to 100 percent renewable energy to harvest rainwater to make their furniture, food and drink supply chains more sustainable and more local, and to digitize the processes to improve efficiency in the operations of the establishment. Half of the applicants have already shared with us their green investment plans. This is how we hope to make progress with the Barbados Employment and Sustainable Transformation Program, or what we call for short the best program. When COVID retreats, we hope that the sector, as I said, will reemerge, transformed, delivering more value to the country and more sustainably.

We also believe that there is a possibility for a national renewable energy transformation program. Our efforts to switch to renewable energy are national and not confined to tourism. Our goal is to be 100 percent fossil fuel free at best, carbon neutral at worst, by 2030 is a stretch target. But we’re making progress through a range of separate yet connected initiatives. We will establish attractive feed in tariffs for renewable energy projects, especially smaller projects within reach of local savers. We’re supplementing this with larger projects, too, such as a green energy park that will nearly double our renewable energy generation, using both solar and biomass, helping us to solve a solid waste management headache at the same time. We’re encouraging these larger projects to be securitized and sold to smaller investors.

Barbados, we hope, will become a regional center of the issuance of green bonds for private sector renewable energy projects. We will lead by example and switch public sector vehicles over to electric. We’ve already started in this fiscal year and indeed we’ve also done it in public transport by buying the first 33 new electric, airconditioned, kneeling buses that are already, I’m happy to say, a hit with our public.

And then there’s the issue of nutrition security. As tariffs have fallen, processed foods have replaced fresh foods in our diets. And partly as a consequence, non-communicable diseases have also skyrocketed with enormous health, societal and economic costs. We’ve seen it over the years first hand. We need to defend our nutritional security by showing a preference for fresh foods, whether they come locally or from close neighbors or from others. Still, we also need to improve the capacity in our agricultural sector to deliver fresh foods locally. We are investing in bringing the land back into agricultural production. We are developing technologies better to coordinate demand and supply of food within the region. We help farmers invest in new technologies like water saving hydroponics, pesticides, even vertical farming. And technologies that protect their produce, we also will invest in drones to be able to help reduce the incidence of praedial larceny.

As we do this, we are also investing generally in resilience because we understand that green is sustainable. The principal threat to sustainability in our region is not our green consciousness. It is our vulnerability to externally sourced disasters, global pandemics as human humanity encroaches, virus pools or climate crisis due to the stock of greenhouse gases put there by the world’s now most prosperous citizens. The countries, my friends that lie between the tropics of Cancer and Capricorn are more vulnerable to rising sea levels, to warmer seas, to more ferocious storms, and to both flooding and drought. You see it before your eyes.

Tackling natural disasters and protecting the environment are the single most significant causes for increases in our debt. We’re responded in several ways. We’ve changed our building codes and are building more resiliently. We have the most integrated roofs to reefs program that recognizes that protecting our environment requires a holistic approach from our roofs to our reefs going 100 percent fossil fuel free or carbon neutral, can improve energy sustainability and security in the face of a disaster, though that also requires expensive resilience planning, it is all expensive.

The issue is not whether we want to be sustainable or resilient, but how can we afford it? How do we afford it? We need more development bank finance. We are doing much to help ourselves. We are employing innovative finance. We use catastrophic insurance facilities and we are, yes, we are the world’s largest issuers today of bonds with natural disaster clauses. We urge others to follow and development banks to put natural disaster clauses in the loans that the issuers in recognition of our reality. But we still need greater innovation from the development banks. This moment of great uncertainty about the timing of a recovery that is itself fairly certain, if not in shape, is ripe, ripe for financial innovation.

We need instruments that are better aligned to economic outcomes that, for instance, have a greater element of equity and also do not overwhelm fragile balance sheets like versions of the GDP linked bonds that you, Stephany, Professor, have done with Jose Antonio Ocampo and have argued for before, and that we find attractive. The development banks we believe are best placed to develop these new markets.

And then, of course, there’s the issue of international solidarity. The measure of how much you want something is how much you are prepared to sacrifice for it. We know that as individuals, more robust building codes mean therefore, we need to build more roofs, more homes and shelter for those who cannot afford it.

For a democratic developing country, it matters that the costs that end up with poor consumers of the generation and distribution of renewable energy are still considerably greater than using the cheapest fossil fuels. We do it because we understand the broader, longer picture, but we are under no illusions that it is more expensive.

We are making sacrifices every day in choosing sustainability and resilience over the cheap and easy, and we believe that we need the global support and cooperation in this respect. Most of the world decries global warming, but too many slink away when it comes to making their sacrifices.

The countries that are most vulnerable to climate crisis and have the least ability to respond to pandemics through quantitative easing or fiscal stimulus or trade policy have been offered the least in concessionary support, support from those who have contributed most to it. The Warsaw loss and damage mechanism that I keep referring to, the promise that was made to the developing world to back the Paris agreement. That mechanism remains empty and toothless.

My friends, we cannot do this as a middle income small island states on our own. We therefore join the call today for debt relief to be extended beyond the public, to the private sector and beyond the poorest to middle income countries highly vulnerable to pandemics and to the climate crisis, and we urge the incorporation of objective international measures of vulnerability to be included in the assessment criteria of who is eligible.

We don’t ask this for Barbados, because we have just completed our own debt restructuring, but we ask this for all other small island middle income countries that need to be able to confront the issue of debt sustainability, especially with this hit from COVID-19.

Last year’s GDP per capita is a poor metric for a country’s need when a small country with no place to hide is overwhelmed by disaster. In our region, We repeat all the time, Dominica lost two hundred and twenty six percent of GDP as a result of Hurricane Maria. Other countries like Antigua and Barbuda and St. Martin suffered almost as much. Should the world deny them support because of a GDP per capita measurement that has little bearing on vulnerability and inequality? I never tire in saying that it is the equivalent of taking my blood pressure two years ago to determine whether and when to be vulnerable to a stroke today, in 2020, as opposed to 2018, when you took the measurement. And these same countries are the ones that are least able to respond to close with our climate crisis too small or poor, as we said, to engage in quantitative easing of fiscal stimulus. These are the same countries that some in the rich world are now arbitrarily placing on blacklists for not conforming to rules that they invent with dubious criteria, I might add that they do not necessarily apply to themselves.

Can you imagine Barbados a country with exchange controls, a country that poses zero threat to international finance, that our leaders must take time out of dealing with COVID, of dealing with unemployment of dealing with deprivation or preparing for the next hurricane season, to explain why there is no fundamental basis for Barbados to be on a money laundering blacklist today, a flawed list arbitrarily and unevenly composed and picking up a number of countries across the Caribbean, across the Pacific and across Africa. It is well accepted that most money laundering in the world takes place in countries that are not even on the list that has been published.

We are making every effort to green the recovery and to build resilience to climate crisis and pandemics to make ourselves more resilient to scourges like money laundering. We cannot shoulder this burden so unevenly. We are not on a level playing field and we haven’t even talked to you about the consequences of guns that flood our region in circumstances where we do not make guns.

Those in the world who say that they care about the environment and the climate crisis, about political stability, geopolitical stability must more firmly, firmly step up to the plate. And Why? simply put, now is the time. Yes, now is the time. I thank you.

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