A day after delivering projections of a less than favourable economic growth for Barbados in 2015, Central Bank Governor, Dr DeLisle Worrell, is telling Barbadians they are the ones in charge of their destiny.
He contended, however, that a sustained annual growth rate of five per cent is possible if Barbados were to fully realize plans and projects currently being implemented or under serious discussion in a number of sectors.
Addressing the October business luncheon of the Barbados Chamber of Commerce and Industry, Worrell told private sector executives they have the resources and talent to realize “a path to a future of greater prosperity”.
“That path does involve some tough challenges,” he said, noting: “In too many areas, we are not up to speed with the finest services and products that are on offer in the industrialized world and outmoded and inefficient processes will need to be discarded.”
Worrell went on: “Our own collective decisions on the timing of these inevitable changes will determine the extent of our economic success, and the speed with which we are able to improve the livelihoods of all Barbadians.
“Faster growth increases the size of the pie to be shared among everyone. That must be our focus,” he insisted, pointing out that the island has a number of advantages in tourism, international business, culture “and other services that can attract business to our shores”.
However, the Government’s top economic adviser mentioned some obstacles the island faces.
“If Barbados were fully to realize the plans and projects currently being implemented or under serious discussion in tourism, international business, sugar and its products, and in alternative energy, the country’s sustained growth rate rises to 5 per cent or more.
“In contrast, Central Bank’s current projection for growth is no more than 2 per cent in two years’ time. The difference could be transformative – at 5 per cent per annum, GDP (gross domestic product) doubles every 15 years; at 2 per cent, it takes 35 years,” explained Worrell.
He stressed that measures which would make the difference are “within the purview of all of us, and do not depend critically on any external circumstance”.
“It is important to persist with and complete the process of fiscal consolidation, to reduce the ratio of debt to GDP, eliminate Government arrears and restore Government’s international credit worthiness,” he said, adding: “In this way, periodic apprehensions about the Central Bank’s ability to defend the value of our currency on the interbank market become a thing of the past, and the investment community will have a resurgence of confidence.”
Worrell also said the quality and efficiency of the island’s public services need to be “very significantly upgraded”. “The inefficiency of our bureaucracy is at the top of the list of factors that inhibit business activity in Barbados,” he acknowledged.
The Central Bank governor also identified as a priority issue to be addressed by the Social Partnership, “the ever widening gap between unit labour costs and the average worker’s contribution to output”.
He explained: “We live in a globally competitive world, and the engines of our growth will not perform at their best if worker productivity and engagement do not improve significantly. We must close the gap that has worsened over more than a decade and achieve productivity gains that can be shared with workers.”
He also said “ongoing reviews of the incentive regimes for private investment are necessary to ensure that the overall thrust of government policy continues to provide incentives for investment in foreign exchange earning activities and in green energy solutions”.
“Also, we should ensure that incentives that have served us well, such as duty free imports of computers, are maintained, and that any remaining inconsistencies in the incentive regime are removed.”