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The Gleaner - March 19, 2001

 

Davies on FINSAC bonds

AS OF April 1, 2001, the assumption by the Ministry of Finance and Plan-ning of full responsibility to service the Financial Sector Adjustment Company's (FINSAC) bonds in cash, will have clear fiscal implications for the country.

Minister of Finance and Planning, Dr. Omar Davies, told the House of Representatives last week that interest payments on those bonds, which were issued to cover liabilities, will amount to $14 billion "in hard cash" in the 2001/2002 Estimates.

"To put it in context, the cash payment of interests on FINSAC bonds will be significantly greater than the Capital Budget," he said.

Dr. Davies said, however, that no one could accuse the administration, or himself as Minister of Finance, "of having utilised this problem in any political way."

But, Opposition Spokesman on Industry and Commerce, Karl Samuda, felt that the decision to allow debtors to March 31 to pay up, has come about "rather suddenly" and asked what would happen to people who were already negotiating settlement of their debts and whether they would be given extensions."

Dr. Davies said that his interest was to collect the money, but added: "I am not going to say yes, I am willing to extend it until April 15. Because, all I know is that everybody will be coming in on April 14 saying they couldn't get things through before."

He said that any extension date would be subject to advice from FINSAC that the response from the debtor justified an extension, after which he would seek the approval of the Cabinet.

 

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