The first signs of dissent have surfaced from within the Freundel Stuart Cabinet as the decision by Minister of Finance Chris Sinckler to appoint former Prime Minister Owen Arthur as Government’s Chief Economic Advisor begins to sink in.
While the under-pressure Sinckler hopes Arthur will help steady the economic ship, Minister of Agriculture and Water Resource Management Dr David Estwick plans to break rank with the administration when the recommendation comes up for discussion in Cabinet.
Without expressly stating that he would vote against it, Dr Estwick today was emphatic he had no intention of taking any advice on the economy from the former Barbados Labour Party (BLP) leader.
“Let me make it clear; Owen Arthur will not advise me on economic and financial matters and leave it there for now,” Dr Estwick told Barbados TODAY this morning.
The former Minister of Economic Affairs is fuming at Arthur, who in an interview with Barbados TODAY earlier this week dismissed an alternative economic plan presented by Dr Estwick to Government’s executive arm in 2013.
In fact, he went as far today as to accuse the former prime minister of stealing his ideas.
In the story published by Barbados TODAY yesterday, Arthur recommended urgent debt restructuring and debt exchange management, while saying Dr Estwick’s proposal to use a US$5 billion sinking fund through the United Arab Emirates (UAE) to wipe out the entire national debt, would not work.
“His approach would be different to mine. I would go the way of a debt exchange, which works well – as happened in Jamaica – where a lot of your debt is local debt, that you can get the local debt holders to surrender their existing debt instruments and bond instruments and replace them with a different maturity,” Arthur had said.
The former prime minister emphasized that Dr Estwick’s plan would be a whole different matter entirely, since “it would take all of the debt – domestic and foreign – and make it foreign.”
Dr Estwick lashed out at the BLP’s Economic Advisor Clyde Mascoll for writing off his proposal.
However, it was with Arthur that he was most angry, contending that what the former BLP leader had proposed was no different from what he had recommended to Cabinet in a letter to Stuart.
“What I find incredible is that both men [Arthur and Mascoll] refused to tell Barbadians the truth and nothing but the truth. My document on the domestic debt restructuring utilizes the same debt exchange strategy that Owen is now purporting to be his choice. I gave that as an option in my letter,” an adamant Dr Estwick said.
Citing the pertinent portion of that letter, he recalled that his short-term strategy recommended refinancing the national debt by using the sinking fund; refinancing as much of the debt based on the available sinking fund; engaging a partial debt restructuring exercise regarding domestic debt held by the National Insurance Scheme and the Central Bank; repurchasing discounted domestic bonds; moving aggressively to reduce the Treasury Bill rate; reversing the fiscal restrictive policies and keeping the accommodative monetary policy stance, while ending the printing of money.
The outspoken minister was particularly peeved that Arthur and Mascoll appeared to single out the sinking fund as the only alternative economic options proposed by him.
“I spoke of domestic debt restructuring and outlined the strategy. I also spoke of external debt restructuring separately and then I spoke on using the sinking fund to manage all debt consolidated under the fund,” Dr Estwick stressed.
He noted that it was not good enough to conclude that the sinking fund option would not work because the domestic debts would be converted to external debt.
“Why would a strategy that saves the Government $1 billion in debt service be a wrong strategy? The Government for 2016 will pay $1.7 billion in total debt service. If the sinking fund strategy saves the Government $1 billion in debt service annually, then I want Mascoll and Owen to tell Barbadians why it would not work,” the former Minister of Economic Affairs said.
“If I can get a loan at an interest rate on that loan that is half of that of the domestic loan than is now being paid, one would have to be a clown not to take it because it is foreign and continue to pay twice as much as on the local loan. I reject unequivocally the position of Owen and Mascoll regarding the sinking fund consolidated strategy,” he insisted.