KINGSTOWN, St Vincent (CMC) — St Vincent and the Grenadines Prime Minister Ralph Gonsalves has written to the World Bank, opposing a move to increase its interest rate and shorten the repayment period for loans to countries.

In his letter, which was copied to 193 leaders around the world, Gonsalves said he would “fight” the World Bank’s International Development Association (IDA) in an effort to get it to back away from the changes.

Speaking on the State-owned NBC Radio, Gonsalves said he has also written the United Nations secretary general, Caricom(Caribbean Community), and Organisation of Eastern Caribbean States (OECS) on the issue.

He noted that small island economies (SIEs) such as St Lucia, Dominica, Grenada and St Vincent and the Grenadines have access to IDA financing and currently get 10 years’ grace period and up to 40 years to repay a loan. The principal payment, he said, is two per cent interest for years 11 to 20 and four per cent for the period 21 to 40 years.

However, the World Bank is proposing to reduce this to a 30-year maturity and five years’ grace period.

“So, you come down to 35 rather than 50 years. And then the principal payments would range from between 3.3 per cent for the years six to 25 years, and 6.8 per cent for the years 26 to 30 years,” he said, noting that some people may argue that, even with the change, the terms are more favourable than market rates.

“You can’t build adaptation and mitigation to climate change on the basis of money which are seven-year or 10-year at seven per cent interest,” Gonsalves said.

“You can’t do it. You need 40-year money, you need 50-year money at interest rates ranging over that period between one and maybe three per cent.

“ ‘Rather than widening the net to embrace more vulnerable small-island economies, IDA is bent on making life, living, and production more difficult for vulnerable countries — especially those in the Caribbean, in the Pacific, Asia and Africa,’ ” Gonsalves quoted from the letter.

“ ‘Rather than the developed countries in IDA/World Bank enlarging their contributions to IDA and taking greater responsibility for their battery on these vulnerable countries through climate change historically, and contemporarily, and otherwise, they seem determined to pit the most vulnerable against the poorest,’ ” Gonsalves wrote.

“It is a mean-spiritedness unworthy of any enobling civilisation and of an institution which has as one of its central plants, the protection of vulnerable countries in an age of deleterious climate change,” read the letter.

The prime minister said he understands that IDA wanted to “test the waters with it” but said that small island developing states such as St Vincent and the Grenadines make no contribution to climate change.

He likened the situation to one homeowner having to spend money to repair their property because of damage caused by a neighbour’s wastewater.

“We are not responsible for climate change; we make no contribution to that. That’s like your neighbour having some noxious substance on their land and it coming into your place, or your neighbour running their water eroding the foundation of your house,” Gonsalves said.

“That is really what places like the main emitters — US and China and Europe, too — that they’re doing to us because on Mother Earth, everybody is our neighbour.”