Pressure is said to be mounting on Central Bank Governor Dr DeLisle Worrell to step down, following a recent ultimatum issued by members of the board of the island’s monetary authority.
Barbados TODAY has been reliably informed that Minister of Finance Chris Sinckler has since met on at least two occasions with the Governor, who has apparently been resisting all moves to force him out of office.
Repeated efforts to get an official comment from either the minister of finance or the embattled Governor have been unsuccessful, but informed sources say Sinckler has been told in no uncertain terms that he needs to make a choice between “DeLisle or the board” . However, there are concerns that Government could land itself in legal hot water should any unilateral action be taken against Worrell, whose contract was renewed by Sinckler for a second five-year term in October 2014 after he was initially appointed on November 1, 2009.
Worrell, who was deputy governor during the 1991 economic crisis , has been credited with helping the then Erskine Sandiford-led administration to carve out a strategy to save the country from possible economic collapse when it had just four weeks of import cover.
However, with the country’s foreign reserves said to be at the lowest level in 14 years and the economy on the brink again, Worrell has apparently run afoul of both Sinckler and his fellow members on the Central Bank board who verbally communicated their dissatisfaction in a formal meeting with Sinckler.
During a LIVE television discussion on state-run CBC at the start of the month, the Governor had sought to publicly warn Government that it must stop the recent practice of printing money.
“We cannot continue to have a deficit and we cannot continue to have a wage bill as high as we are, simply because the only way we are able to do that is by the Central Bank providing financing,” he said then, while seeming to deliberately throwing his immediate boss under the proverbial bus.
Worrell was also at pains to point out that approximately $50 million in monthly wages was far too much for Government to afford at this time, given what he knows about what it is raking in terms of taxes and revenues to meet its current costs.
Though not prepared to tell the Minister of Finance ‘no’ for fear of not meeting the monthly commitment to pay public servants, the Governor further warned that the printing of money was simply “unsustainable”.
“That is why the current account deficit has to be eliminated, not just reduced,” he said during the Bank’s televised economic forum.
With the eyes of the country staring back at him, Worrell was equally adamant that Government must live within its means on an ongoing basis and that it must generally operate as ordinary householders do, in terms of its spending.
Therefore, “if you are earning $2,000 a month, you cannot be spending $2,500 a month,” he suggested to the ruling Democratic Labour Party-led administration.
Those public pronouncements came on the heels of a warning by Worrell late last month that drastic action had to be taken to eliminate the deficit.
In presenting his economic report for 2016, the Governor suggested at the end of January that a “reduction in wages and transfers would assist in eliminating the Government’s deficit on its current account.
“The fact that Government spends more on the current account than it receives in taxes and other current receipts is the reason for the increase in Central Bank lending to Government. There is general agreement that any additional financing by Central Bank should be avoided,” he said.
However, without dismissing the recommendation outright, Sinckler responded at the time saying he was prepared to ignore the Governor somewhat, even as he said cuts would have to come by attrition.
“[Government officials] don’t have to accept every piece of advice that comes out of the Central Bank, but we hear it and respect it for what it is because they are professionals,” Sinckler said as he wrapped up debate on the resolutions to restore the ten per cent that was cut from the salaries of parliamentarians and senior Government officers in 2014.