Young Democrat warns higher taxes, ‘excessive’ lending

The youth leader of the Democratic Labour Party has suggested Barbadians should expect an increase in taxes if the Mia Mottley administration continued “excessive” borrowing.

Kemar Stuart, the president of the Young Democrats, issued the concern as Barbados is set to receive $200 million from the Development Bank of Latin America (CAF) to support fiscal measures associated with the COVID-19 pandemic.

Earlier this year Government had also received a long-term, low-interest policy-based loan of $160 million from the Inter-American Development Bank (IDB), which was approved in mid-March.

Under the Barbados Economic Recovery and Transformation Programme, the country has also received $280 million from the International Monetary Fund, a portion of which was expected to go towards assisting the country to get through the COVID-19 pandemic.

With the increase in the island’s access to financial resources from lending agencies in recent years, the foreign exchange reserves now stand at a record $2.1 billion, or 28 weeks of import cover.

Stuart has insisted that “the saddling” of the loan from the CAF “can’t be justified at this time”, and he expressed concern that the country’s borrowing would come at a cost to residents.

“The DLP is cautioning this administration against excessive borrowing from multilateral institutions. Since coming to office this administration borrowed debt well over the billion-dollar mark in two-and-a-quarter years,” said Stuart.

“As Barbados attempts to emerge from the COVID-19 crisis, the Government borrowed an additional $200 million in debt from the Latin American Development Bank,” he added.

The DLP youth leader issued a call to Minister in the Ministry of Finance Ryan Straughn and Minister in the Ministry of Investment and Economic Affairs Marsha Caddle to say how Government planned to repay its debt.

Stuart said: “With foreign exchange earning projected downward for some time both ministers must tell Barbadians where the money will come from to repay this administration’s billion-dollar debt bill.

“The ministers must also state if there will be additional taxes and or increases in fees on the backs of Barbadians,” adding that the latest amendments to the town and country planning legislation were “a dangerous sign of what’s in store for Barbadians”.

Since an outcry over sections of the Planning and Development (Amendment) Bill, Caddle has announced that Government would be putting the draft legislation on pause in the House of Assembly.