Barbados is facing a major challenge returning to a path of economic growth, a leading economist has observed.
The Pro-Vice Chancellor for Planning and Development at the University of the West Indies (UWI), Professor Andrew Downes, noted that the island’s economy has been on a downward slide for the past four to five decades or so and it is going to be a challenge to get it back up.
Downes’ remarks were made yesterday morning at a consultation where he presented the findings of the Barbados Habitat III Report.
He recalled that in the 1960s Barbados posted growth in the vicinity of four per cent annually but now could barely achieve one per cent. After predicting growth of one per cent for this year, Government recently revised downward the forecast to 0.5 per cent.
The Barbados economy has performed sluggishly over the past seven years, with largely marginal growth of below one per cent and decline in one year.
“The challenge we have is for you to get it back up to that four and five per cent,” Downes said. “In fact, I don’t think my colleagues in the [Economic] Society [of Barbados] have spoken of four or five per cent in a long, long time. In fact, the International Monetary Fund (IMF) talks about two per cent as robust…”
Downes went on: “In all my decades of being an economist, if someone had said to me in a class that two per cent was robust, I would say they are talking nonsense.”
He noted that unemployment was associated with economic growth, suggesting that the only way the country was going to resolve the fundamental problem of unemployment was to get the economy growing again.
Such would have to be achieved through investment, particularly financial investment in the urban economy, Downes said, noting that the two main drivers of the economy are investment and exports.