Action to fix Government’s large fiscal deficit is around the corner, Prime Minister Freundel Stuart promised today.
But the country’s leader said having incurred increased debt in recent years to keep Barbados peaceful and stable, he would not now be presiding over a plan that will curtail social services and “inflict great injury on our businesses”.
“The challenge now, therefore, is to reduce the fiscal deficit while maintaining a reasonably adequate safety net and taking those steps that would promote sustained growth in the economy,” Stuart said this morning at the opening of a National Consultation On The Economy at Hilton Barbados.
“In all of this, our gaze must not be deflected from the imperative of doing all that is required to ensure that our foreign exchange earning sectors are restored to vibrancy and that we save foreign exchange, with a laser-like focus on cost effectiveness.
“The major challenge that confronts the Government pertains to the determination of a policy choice that finds the right balance between fiscal consolidation and a sustained economic expansion that is led by the foreign exchange earning sectors.”
The Prime Minister told a large audience, including Cabinet members, Leader of the Opposition Mia Mottley, private sector and trade union partners, that his administration’s major concern was the size of the fiscal deficit, which was projected to be about $1 billion in the 2013/2014 Estimates of Revenue and Expenditure.
He asserted, however, that were it not for the steep difference between Government’s revenue and its spending, it would have been difficult “to pay wages and salaries, maintain the safety net, and provide fiscal support to key sectors of our economy”.
“The Government is aware that it is the single largest buyer of goods and services in the domestic economy. Conscious of the size of Government in the aggregate demand for goods and services we must exercise great care to craft a fiscal consolidation strategy that does not inflict great injury on our businesses, the economy and the quality of life of our people,” Stuart said.
“I give you the solemn assurance that the Government is committed to the pursuit of a strategy that will systematically reduce the fiscal deficit, and work hand in hand with the leadership in industry, labour and civil society, to create an enabling environment that re-energises the engines of growth and innovation in our economy, and enhance the quality of life for our people.”
While the other social partners called the need for a fiscal turnaround immediate and urgent, Stuart said as important as this was “the task cannot be achieved overnight”.
He also told those who participated in today’s discussions to avoid platitudes, imitation, division and hollow posturing. (SC)