The major threat facing Barbadians at this time could be Government’s inability to implement the policies it agreed to with the International Monetary Fund under Article IV Consultation.
Former Prime Minister Owen Arthur raised this concern in the House of Assembly today while speaking on the Barbados Revenue Authority Bill, 2014.
The St Peter MP said: “Therefore I am saying, based upon experience, that the Government has to take very seriously now the implementation schedules that it has agreed to with the IMF. If you read the report again you will see in almost every instance the IMF is saying the Government’s estimates of the change in its fiscal position are far more optimistic than those of the IMF itself. The Government is using very optimistic projections as to what it can achieve by way of fiscal adjustment.
“A $700 million adjustment of the kind implied in Article IV Consultation report is heroic to undertake even if you have all our implementation dots in line. I have had relationships with the fund. I was there in 1981. I was part of the team which assisted in negotiating Tom Adam’s programme. From time to time the fund will appear to give you that which you want. In 1981 Barbados just needed a line of credit with the resources front loaded and we were able to get the fund agree to that. But the fund will give you what you say you want as happened with Michael Manley, but if they do not agree with how you are carrying out a programme of adjustment that is too large for you and you have to return they will ask you to do what they want you to do,” Arthur added.
The former prime minister said he was using his speech to say that the programme of adjustment agreed to by government calls for “serious discipline” on the part of Government and civil society.
Arthur noted that one of the rationales for the Barbados Revenue Authority Bill, 2014 was to ensure that every Barbadian carried their fair share of the tax burden.
He pointed out that it was not for people who were captive of the pay roll, but for those who refuse to pay their fair share of taxes and accumulate significant tax arrears.
The former Minister of Finance said: “At this time Barbados needs to be stabilized as a precondition to getting back to growth. To achieve stabilization there has to be shared sacrifice. A message of shared sacrifice has to be spoken. This institution of the Barbados Revenue Authority is seriously needed.
“Sometimes when you are coming into the island by air it appears as one large rock in the ocean. It a hard task to establish an economy in this country. From time to time this country has had to face issues of stabilization by migration. Migration saved Barbados when thousands went to Panama, Guyana, worked in the oil fields in Trinidad and Tobago and worked in Cuba.”
He warned that the challenge of stabilization faced Barbadians of every walk of life at this juncture of the island’s history.
The St Peter MP said: “I can only urge that it is taken seriously because the consequences of not having a viable economy as has been proven in so many other countries is a lost economic generation. I cannot underscore that point too much. There has been too much of a frivolity in this country. Some people on my side have told me we do not want to hear about fiscal deficits but these things matter. It has to be said that this task of stabilizing the economy is going to be the most difficult ever undertaken in this country, but it is going to require fiscal discipline on the part of the Government.”