Avinash Persaud makes a persuasive case for developing countries to follow Barbados in issuing sovereign debt with natural disaster clauses (Opinion, June 28). In the event of a natural disaster, the interest payments on such loans are immediately suspended and added to the principal at the end of the term. Essentially these clauses equip countries struck by a natural disaster or even a pandemic with the liquidity that is necessary to respond to the crisis.
Unlike the Debt Service Suspension Initiative (DSSI) that the G20 rashly implemented at the height of the Covid-19 crisis, the Barbadian measure is forward-looking and pre-empts a liquidity crunch and a debt crisis when a country is hit by a natural disaster. It is an innovative me…
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