A local businessman is expressing sadness over the state of the Barbados economy, saying Government’s austerity measures have been stifling economic activity which contributes to growth.
Peter Bynoe, managing director of Store All – a self-storage facility in the Pine, St Michael commercial district, told Barbados TODAY that while his business was “lucky” and the tourism industry had “a few glimmers of hope, the economy is very, very distressed”.
Bynoe said while he believed conditions could improve, the country had “a long way to go”. However, he did not see the island getting back to 2007 levels of economic activity.
“It can get better. Once the austerity measures are minimized or relaxed a bit, the economy will start to improve. However, the Government still has a tremendous debt burden and is in a very bad position,” said Bynoe, offering his assessment of the economy.
“I think the austerity measures are stifling the economy. I think what the Government wanted [to do] was to control the exit of foreign exchange and so forth, but the austerity measures have depressed the economy for sure.
“I don’t think all of them are necessary. I think the Government needs to reduce its spending and be more creative with its spending as it reduces its debt. Maybe it is easier said than done but I think that is what they should do.”
Bynoe also said: “I think it is time now to start reducing the pressure being put, especially on the middle-income people in this country. They are the ones that are being hit hard and I think that is very unfair.”
His comments came after the official opening of his new Store All facility, which represents a $3 million investment, offering about 20,000 square feet for both indoor and outdoor storage. Store All, which has been in operation for the past 11 years, was relocated to the Pine, St Michael in April following the acquisition of a parcel of land and building there.
Bynoe’s comments also came two days after Central Bank Governor Dr DeLisle Worrell reported that the economy grew by an estimated 1.7 per cent during the first quarter, and was on track to record a projected 1.6 per cent expansion in 2016. Last year, the economy only grew by 0.5 per cent.
In his first quarter review, Worrell pointed out that despite an expansion of about 11 per cent in the country’s international reserves, Government debt was also growing. And he acknowledged that the Central Bank continued provide Government with “newly created money” to help finance its deficit.
Singling out the removal of personal allowances and reduction in Income Tax allowances and deductions as the most vexing areas, Bynoe said that move had put “tremendous pressure on the middle-income part of the economy.
“And therefore, yes, they can’t spend. The lower income section definitely can’t spend but the middle-income folk have been hammered fairly hard as well.
“All that reduces spending, and people don’t spend unless it’s something they really need,” he pointed out.
“They are not going to spend on discretionary items. They will sometimes [go out] to treat themselves, but if the money is not there, they will focus on the basics,” Bynoe added.
During last year’s Budget presentation, Minister of Finance Chris Sinckler announced a number of tax measures aimed mainly at raising revenue.
Bynoe said he remained positive and hopeful about his own business. He said he believed there was more potential for growth, given the need for storage both from individuals and businesses.
“People downsize. They go from a house to an apartment or renovate their house and need space, or they move to a new house and need some temporary storage. So I think there is still a lot of potential for it,” Bynoe said.
“It is nice to be in a business that is growing even though the economy is very depressed. So we are in a very fortunate position. We are very thankful for that,” he added. (MM)