By Jenique Belgrave
Declaring that Barbados’ debt is too high, Democratic Labour Party (DLP) president Dr Ronnie Yearwood has challenged the Government to show how Barbadians are benefiting from the high level of borrowing.
He made the call as he charged that the administration is failing to implement growth strategies to get the country out of its current situation.
“The country is really facing a serious set of issues and what is most troubling and worrying beyond the debt is that we’ve not seen a growth plan,” he said in a live stream on his Facebook page on Thursday night.
The DLP leader said the Government was in a “sticky situation”, as he highlighted the gap between expenditure and revenue as outlined in the 2023-2024 Estimates of Revenue and Expenditure that are expected to be debated next Monday.
According to the document, while total expenditure is projected to be $4.16 billion, total revenue is expected to be $3.31 billion, resulting in a shortfall of $844 million. That is to be funded mainly by foreign financing to the tune of $466 million and domestic borrowings at over $300 million.
Acknowledging that borrowing was necessary for any economy, Yearwood stressed that it must also be productive to help propel growth.
“The reality is, we’re not seeing productive use of the borrowing. So we’re not borrowing for productive services. We’re not borrowing for investment purposes. So what are we borrowing for? That’s a question that we need to put towards the Government – where is all the money that we’ve been borrowing? What is it actually being used for? How is it actually being used to develop Barbados and put us in a better position than we were last year and the year before that?” the law lecturer queried.
Speaking in particular about domestic borrowings, the DLP leader suggested that any push to get Barbadians to purchase government bonds will fail.
As he laid the Estimates in Parliament earlier this week, Minister of State in the Ministry of Finance Ryan Straughn encouraged Barbadians to invest in the country, while highlighting that persons who signed on to the original Barbados Optional Savings Scheme (BOSS) programme – a four-year bond that offers an interest rate of five per cent per annum – were already seeing the benefits of their purchase.
However, Yearwood stated that the confidence of locals in bonds had been rocked by the Government’s 2018-2019 debt restructuring.
“A large part of that is the reality that the bond market was destroyed throughout the restructuring. So you have a lot of persons and a lot of pensioners who invested in bonds, who did the right thing and wanted to support the development of their country and wanted to invest in their future, and they paid a heavy price for it. And now you’re coming back to those same people to say, ‘please invest in bonds’, and so you can understand why persons are not taking the bonds. Furthermore, the high debt level of about a billion dollars will turn off people,” he said.
Yearwood advised the Mia Mottley-led administration to look at tax reform, insisting that Barbadians were paying direct taxes for services they were not consistently receiving.
“Barbados is one of the highest taxed jurisdictions in the Caribbean but, the fact is, we’re not getting services that we pay the taxes for. You can’t be paying directly for the Queen Elizabeth Hospital and you go there and you have five days to wait before you are admitted from the A&E [Accident and Emergency Department] to a ward, to a bed – and in between that time you’ve seen enough stories of people dying. This is just a reality of Barbadians.
jeniquebelgrave@barbadostoday.bb
