Minister of Finance Chris Sinckler failed to assuage the fears of the private sector, even as he told Barbadians at a news conference Monday there was no need to panic over the state of the economy.
President of the Barbados Chamber of Commerce and Industry (BCCI) Eddy Abed told Barbados TODAY while he welcomed the update it was grossly lacking in details, and had left the business community still “gravely” concerned that no concrete path had been identified to drive down the unsustainable debt, which Sinckler said stood at eight per cent of gross domestic product.
“We remain concerned that there are still no specifics as to how the deficit will be reduced . . . . Our estimation tells us that we need to find at least $200 million to $250 million to reduce it and the minister had indicated previously that he had found $50 million that he could reduce the transfers from Central Government to the state boards.
“So it still leaves a shortfall of about $200 million. So this concerns us especially in light of what will be laid in Parliament shortly [Estimates of Revenue and Expenditure], and it concerns us because we are thinking that the minister may well have to come back to the general public in this country and tax us to try to increase his revenue to reduce that deficit. So we are gravely concerned about it,” Abed said.
At Monday’s press conference Sinckler gave the assurance there would be no new taxes, and that foreign exchange reserves would return to a “comfortable” level any day now due to a cash injection from a number of sources, including the sale of the Barbados National Terminal Company Limited (BNTCL) to the Sol Group, which, when taken with Sam Lord’s and First Citizens’ monies, was expected to rake in some $200 million.
He also revealed that inflows in the amount of $30 million were expected from the Development Bank of Latin America, otherwise known as CAF, and a further US$35 million from the Caribbean Development Bank (CDB) to fund two water projects. Another $50 million in support is also due from the CDB for an education sector enhancement project.
Sinckler released no details of the First Citizens loan, something that did not escape Abed, who said one of the biggest concerns of the business community was the servicing of Government’s debts.
Calling for the minister to provide information on the size and conditions of the loan, Abed charged that given the island’s poor credit rating, “one’s imagination wonders what we must be paying for that loan at First Citizens”.
“This clearly is not something we want to see being pursued because the cost of that is going to be exorbitant,” he surmised.
The business executive also called on Sinckler to keep his promise to carry out an examination of state entities with a view to merging those that provide the same or similar services and divesting Government interest in others.
“The minister mentioned . . . two years ago that they were doing a special look at which statutory boards could be merged because of duplicating services. We heard no more about this. I am sure by now that exercise would have been completed,” Abed contended.
“Apart from the BNTCL deal there are no others that the private sector has been told about and it is time that some of these Government assets should be considered for sale, not only because they are not as productive as they can be but quite frankly they remain an extremely difficult burden for the public purse at a time when revenue is scarce.
“So these are the things we want to talk about; these are the things we would like to have some more information on; these are the things we think are lacking. When you have a press conference from the Minister of Finance there needs to be more depth and there needs to be more specifics, and quite frankly at the end of it there are more questions than there are answers,” the BCCI head maintained.
Equally unimpressed was immediate past chairman of the Barbados Private Sector Association Alex McDonald, who told Barbados TODAY while Sinckler sought to “make representation of his stewardship” and admitted that things had not gone entirely according to plan, he had failed to provide details on how he planned to tackle key issues.
“I am sure what he would have wanted was to come over as a confident leader with a plan, but instead what the reaction has been is more of a skeptic wait and see, is this going to work out? So the mention of foreign exchange and foreign exchange investment, while people are hoping for it, they are not planning for it. They are saying, ‘we heard this story a couple of times and no luck yet’. So I think there is skepticism about timing and skepticism about amounts,” McDonald said.