There was no need for the Government of Barbados to borrow the $300 million it did at the end of last year.
This is view of the Central Bank Governor Dr Delisle Worrell and he contends that the international reserves, which currently stand at 16 weeks of imports, “is much more than we need”. Worrell was responding to questions from journalists during a media conference on the island’s first quarter economic review at the Central Bank today.
Asked if he anticipated that Barbados would need to borrow from the international market again, Worrell said: “We actually didn’t need to go to the market even the last time.
“We don’t run this economy on borrowing. The fundamental thing about running this economy in the short run is that you balance what you are earning with what you are spending,” he said.
“What has happened since September when we reached the lowest point of our reserves is that the reserves have gone up. What that means is that we are earning more than we are spending,” added Worrell.
In his report yesterday, Worrell said the international reserves stood at about $1.1 billion at April 30, equivalent to 16 weeks of import cover. In December, the Government received a loan of about $300 million from Credit Suisse.
Worrell said: “We have been forced to borrow simply because people are nervous because we are not using the money. The basis, and I keep reminding people, for sustainability in this climate, is that your earnings are being used. You are not using reserves. If you use reserves they are gong to run out.
“You are using earnings; you match your spending to your earnings. It is your earnings that you have to worry about. So forget about this borrowing. Let us start talking about earnings.”
The economist also sought to silence critics, saying that the talk that there was a lack of confidence to invest in Barbados among potential investors and talk that Government was not giving regular and timely updates on the country’s affairs “say something about the people who are making the comments”.