Economist Ryan Straughn believes that Central Bank Governor Dr DeLisle Worrell is not the only one who deserves to lose his head for poor management of this country’s monetary and fiscal policy over the past seven years.
Speaking on radio here Monday morning in the wake of reports that Minister of Finance Chris Sinckler was demanding the Governor’s immediate resignation, the Opposition Barbados Labour Party (BLP) spokesman suggested that Sinckler should also be forced to step down given that the Governor is a creature of the Minister of Finance who is ultimately responsible for the current instability of the Barbados dollar.
“I believe the Governor has embarrassed himself professionally and as a result of that he is now being embarrassed personally,” said Straughn, a former Central Bank employee.
However, he highlighted Sections 47,48 and 49 of the Central Bank Act to show that “anytime any Governor believes that both the monetary policy and the fiscal policy run contrary to maintaining the fixed exchanged rate in Barbados, he has the responsibility to write the Minister of Finance and state specifically why he has come to such a conclusion and what are the remedies that need to be taken to rectify the situation”.
He was therefore adamant that the current threat of currency devaluation could not be pinned on Worrell alone, since Sinckler was a much as fault as the Governor for the recent money-printing binge.
“What you are seeing manifested right now between Bay Street [the seat of Government] and Spry Street [the Central Bank] is just a symptom.
“I believe it is an attempt basically to hang the Governor out to dry [and] he would get no sympathy from me on that from a professional standpoint [since] I think he has done the country a disservice, because the Central Bank’s job is not to support Government, [it] is to protect the mandate of the fixed exchange rate. [But] it has been a willing participant in supporting the policies of the Government, which have led us to this position”, Straughn said.
He also suggested that Prime Minister Freundel Stuart must also share in the economic blame, while contending that the country lost $219 million in the last three months of 2016.
“I think part of what Barbadians have to ask themselves is, ‘at what point are we the people going to decide that enough is enough’, because the reality is that for six or seven years at least, we were told that the policies being pursued by the Government would take us to safety whereas, not just the Opposition, but persons in the country who know better have been saying that the policies being pursued were misguided. But I think we are in a place right now where Barbadians have to decide what they want to do,” the Opposition’s candidate for Christ Church East Central said, while calling on citizens to get up and make their presence felt “either at Bay Street or in Parliament yard to make sure that the Government understands that they cannot continue with the policies they are pursuing which put our lives in danger”.
Straughn’s comments came on the heels of a series of legal and other manoeuvres by the Governor and his advisors to block attempts by Sinckler, under direction from the Central Bank board, to remove Worrell from office.
In an unusual move, the High Court met under the cover of darkness Sunday night to approve a temporary injunction, assuring the Governor of a temporary stay of his execution until next week Wednesday.
Also responding to the Central Bank developments, economist Avinesh Persaud said that from his reading of the Governor‘s statements in recent weeks the Government’s chief advisor on monetary policy had made it very clear that the current approach was not only unsustainable, it was endangering the stability of the Barbados dollar.
However Persaud said it was a clear case of the Government not listening.
“Historically when we need to borrow money and we issue debt, it is purchased by the banks and the life insurance companies [but] in recent months they have basically gone on a buyer’s strike. They are not buying any and it’s a result of that buyer’s strike, an unwillingness of anyone in the private sector to buy new debt, an increasing unwillingness to own our debt, own the name of Barbados as a credit,” he said, adding that this would explain the recent heavy reliance on the Central Bank to print money, which has led to the current pressure on the Barbados dollar.
Persaud also cautioned that there was no painless way out for the economy.
“Our deficits have been in the order of $400 million to $700 million every year for the past seven to eight years and we have piled on the debt, so I think even if we were to reverse course at this minute it would not be enough to reverse the problem we are in. So there are no easy options,” the economist said, adding
that everybody would have to share in the burden.
He also touted privatization as a possible solution, while suggesting that over $300 million in revenue could be raised through changing the domestic ownership structure.
However, the former spokesman for the failed Four Seasons project cautioned that such would only be realized “if we do the sale correctly, not if we flung off assets to our friends or anyone who is prepared to give us a deal today.
“That is a sure way that we are selling the family silver at discounted prices,” he said.
Straughn agreed, while suggesting that job cuts were not the only way for Government to achieve the fiscal space it needs.
In fact, he suggested a complete re-ordering of the state’s priorities, with health and education as the two main areas that need to be protected.
Straughn also highlighted the planned sale of the Barbados National Oil Terminal Limited to Sol as a missed opportunity for ordinary Barbadians to acquire shares, amid the urgent need for restructuring.