Opposition queries Government’s borrowing

Opposition Leader Bishop Joseph Atherley is questioning Government’s ability to repay its debt as the administration continues to borrow.

At the same time, Atherley is knocking the Mia Amor Mottley government for doing little to encourage growth in an environment where there are limited employment opportunities, particularly for university graduates.

Speaking in Parliament on Monday on the Appropriation Bill, 2021, the Leader of the Opposition said that Barbados’ debt service will total 800 plus million dollars in the coming financial year, in the absence of growth in the economy.

“You are talking about paying a high level of debt service in a given year in a specific context when there is nothing in the Barbadian economy that is suggestive of growth. We lament that Barbados struggles today to pay existing debt.

“We chastise the last administration for the levels of unproductive debt which allegedly they created, but we do the same thing against that backdrop, that reality that those who come behind us have to repay it,” he said.

Atherley pointed out that though the Central Bank Governor in a review in 2020 reported that the economy declined by 17 per cent,yet in a context of declining growth and economic constraints, Government incurred over $1 billion dollars in loans from international financial institutions.

He suggested that too many Barbadians perhaps do not understand that a lot of the money Government accessed from international lenders over the last several months, must be repaid, even though the Administration boasts the interest rate stands at one per cent.

“We are glad for concessionary terms for accessing these loans but at the end of the day it is still debt to be repaid. Eight hundred plus million debt service in this year, more than any allocation to any of the ministries. So the fuller story of the issue of debt has to be told. It is not sufficient to say we were managing well, we reduced the debt level, we had to incur fresh debt because of COVID, we have incurred debt at a significantly low interest rate,” Atherley said.

He noted that while Barbados experienced significant debt under the last Barbados Labour Party (BLP) administration headed by former Prime Minister Owen Arthur, the country was able to use its debt to generate growth.

“I am saying Mr Speaker, it matters the level of debt when the reality of the growth dynamic is brought into the picture. It is not enough to say to Barbadians that we are managing our debt well, and that prior to COVID, we had reduced it from about 180 per cent, our GDP is down to 119 per cent, COVID-19 has come and caused that debt to escalate again. It is not enough to say that without making reference to the growth reality. And the growth reality for Barbados has not been a strong experience,” he said.

Atherley added: “There are generations behind us that would have to repay the debts which this Government, this country at this time creates. They will have to pay it against a backdrop where there is no certainty of job opportunity, and that was prior to COVID. COVID has exacerbated the situation. We have a situation where, even before COVID, people are graduating from tertiary institutions with fine qualifications, but not an opportunity to findjobs.

“So we are creating debt for people behind us, some of them, our offspring who tomorrow, in the medium term and in the distant context will have to repay this debt and we are not creating an environment within the context in which they are likely to find a job period or a job that produces a satisfactory level of income that help them to meet their needs and that of their family and to contribute to the growth of Barbados.”

The Opposition Leader once again accused Government of constructing a survival platform rather than a launch pad for growth, which he said many argue, is necessary or the country would go under.

However, Atherley said the Government cannot use COVID as an excuse to spend “20 odd million dollars more in the year ahead than would have been spent in the last year, against a fall off of 1.4 billion in the economy”.

“Is it enough to spur growth? And if you look at the estimates, is spending being strategically allocated bearing in mind the context in which we now operate. Now I look at the figures here and I see no increase for the Barbados Investment Development Corporation (BIDC) and we are talking about thrusting international business.

“We are talking about penetrating markets, we are talking about securing fresh, more viable initiatives, but no significant increase in the funds allocated to the BIDC. So we have to question how strategic have we allocated these funds,” he said.
(AH)