A regional central banker believes Barbados could learn some valuable lessons from Grenada and other neighbouring Caribbean islands, as it struggles to drag its ailing economy from the proverbial slump.
Though making it clear he was not seeking to tell the Freundel Stuart administration what to do, Governor of the Eastern Caribbean Central Bank Timothy Antoine Thursday proceeded to dish out some sound economic advice to Government, which is currently struggling to lower a high fiscal deficit along with massive debt of 107 per cent of gross domestic product that requires servicing to the tune of over $300 million annually.
In the face of a worsening economic situation which has also been highlighted by dwindling foreign reserves which fell precariously from $1.4 billion in 2012 to $681 million by the end of last year, former Central Bank Governor Dr DeLisle Worrell this week echoed the advice of former Prime Minister Owen Arthur and other leading economists that Government needed to enter a formal programme with the International Monetary Fund “without delay”.
Worrell, who was dismissed from the helm of the monetary authority back in February, has also called for cuts to be made to the size of the country’s public service.
In the meantime, Prime Minister Freundel Stuart and his Cabinet have before them two reports from two tripartite committees, mandated by Stuart on March 3 to review the situation with the island’s foreign exchange and fiscal deficit and to make recommendations to Government on the way forward in resolving both problems.
Though refusing to be drawn into any of those domestic discussions, Antoine cautioned that some tough decisions would have to be made. He also suggested that the situation required an immediate national conversation with all stakeholders in order to arrive at “an effective response”.
“Every country has to find a way. One size doesn’t fit all. What works in Grenada might not work in Barbados or work in Antigua or Dominica, but the reality is that there are lessons you can draw from each other and therefore it would be for the people of Barbados to do that and come up with what works best for Barbados.
“Ultimately I expect you will,” the Grenada-born economist said.
Pointing to his country’s experience, Antoine said Grenada had been recording growth of between three to five per cent over the past three years after taking “some really tough decisions” as part of its homegrown structural adjustment programme.
The Keith Mitchell-led administration was forced to enter into the programme after it defaulted on its debt payment to a group of international creditors shortly after taking office in February 2013.
However, Grenada has since been reporting strong growth, with Antoine suggesting that one of the major contributing factors was government’s engagement with trade unions and the private sector and other local stakeholders through its social partnership arrangement, which it copied from Barbados.
“For several years we have been trying to emulate that [the Barbados Social Partnership model] without success, but in 2013 we were able to break through and we went beyond the Barbados model to include both civil society and churches,” said the economist.
“That has been a major factor that Grenada has achieved in the last three years in terms of turning around the economic fortunes. So at the end of the day it is a conversation that must be had at the national level with all the partners and then you figure out what is best,” Antoine said.
He also lauded the Central Bank of Barbados for its work over the years in helping to maintain a stable financial system here, while complimenting Worrell, who was recently dismissed from the financial institution.
Addressing the annual Domestic Financial Institutions Conference at the Lloyd Erskine Sandiford Centre, he also questioned, “where would the Barbados economy be without the Central Bank of Barbados?” while expressing confidence that this island’s monetary authority would “once again rise to meet the challenges of the day”.