Bothered by the low interest rates being offered by commercial banks, Opposition Leader Mia Mottley is challenging insurance companies to come up with new instruments in which the financial institutions can invest.
“The commercial banks have sent enough messages to us that they are prepared to shift their presence because the region is not giving them the returns that it gave them for the last century. Now, how do entities that live with us for 100 years start to make decisions to find other regions attractive all of a sudden? It is because we are not performing at the levels we ought to be performing.
“You can’t fuel growth without having access to oxygen. The oxygen is the savings, the oxygen is the capital, it is also people, and we have the people,” Mottley said today as she addressed the 31st annual Sales Congress for the Caribbean Association of Insurance and Financial Advisors at the Barbados Hilton Resort under the theme, The Environment – Unlimited Opportunities.
The Barbados Labour Party (BLP) leader, who will take the BLP into a general election for the first time when the polls are held next, said she was seeking to lead the country at a time when it was felt that residents should be able to fuel the production of wealth from generation to generation.
Yet, she said, wealth generation was being stifled because of the extremely low interest rates.
“What happens in a region when all of a sudden people can’t even get decent returns on their savings? You now have people putting $100 in a bank account and getting $0.10 every year,” Mottley noted, pointing out that the high bank fees meant that people were now “paying the bank to hold their money”.
Pointing out that the banking system was very liquid, she told insurance officials their industry was placed in a prominent position to be able to make the required transition.
“We have a responsibility as governments, but you have a responsibility as product developers. For us to develop new instruments that are capable of matching the needs of lenders and borrowers in this economy because governments don’t grow, it is business and individuals that grow and without that fuel our underperformance economically will become chronic and endemic rather than changing,” Mottley said.
However, the Opposition Leader said this would require trust and unity among the stakeholders, even as she accused some financial and insurance officials of “slowing the pace of sales”. “There are some of you I know who may even be slowing the pace of sales at this time in a country like Barbados where there is tremendous uncertainty as to the savings instruments that you may even be required by law to invest in. When we start to have that we start to have problems of trust,” she warned.
Mottley said it was critical for people to “pool their savings to be able to be an engine and a fuel for growth in a region that is chronically underperforming”.