Economist Ryan Straughn has given the Freundel Stuart administration a failing grade in its efforts to restore investor confidence, a year after it introduced an 18-month fiscal adjusment programme.
And he has warned that Government should not wait until the last minute to ask for help, adding that his position has always been that “we should have already gone to the International Monetary Fund at least two or three years ago.”
In addition, Straughn said, given the number of ratings downgrades the island received in the recent past it would now be more difficult to attract overseas investors.
His comments in an interview with Barbados TODAY came days after assistant vice-president of Royal Fidelity, Jillian Nunes, expressed concern over the Government’s high debt. She said while officials had dismissed the Moody’s downgrade, wealth managers across the island were worried.
Straughn said the island was badly in need of some good news when it came to investment and he believed there was still time for Barbados to seek help.
“I think that regaining investment grade has to be critical. Restructuring the debt and getting the public finances under control is part of the decision that will allow more foreign investment to come into the economy, and I don’t think we can do that on our own,” he said.
“At the moment we have failed miserably to convince people of the things we say that we can do and I think it is an issue of the ability to do, because all the things the Government said we were going to do we haven’t seen them . . . Therefore it is difficult to go to foreign investors and say ‘bring some money into Barbados’.”
He added that Government needed to clearly outline what measures were working and what targets have been achieved so far.
That, said Straughn, should give a “boost” to investor confidence.
“Therefore, I believe that there must be a more rigorous engagement in order to help us get out of this thing . . . and one has to come to the realisation that there must be some external intervention. But, unfortunately, as things are progressing at the moment they are still very reluctant to actually engage on that, and as time goes on things might get worse and make the recovery that much longer,” he warned.
The 19-month fiscal adjustment programme is expected to come to an end in March 2015.