The ruling Democratic Labour Party (DLP) has been in office for nine years now.
However, Parliamentary Secretary in the Ministry of Finance Senator Jepter Ince last night said that if anyone were to blame for the country’s dwindling foreign reserves position, it was the main Opposition Barbados Labour Party (BLP) whose persistent borrowing while in office had created “haemorrhaging” in the domestic economy.
Wrapping up debate in the Upper House on Wednesday night on the National Social Responsibility Levy (NSRL) Amendment Bill, 2017, Ince further accused former BLP Government of plunging the country deeper into debt for the purpose of shoring up the country’s reserves.
“The reasons why we borrowed for foreign reserves was because the interest rates were attractive, the economy was growing, we had collected $10.7 billion in taxes, so borrowing for foreign reserves was easier than earning foreign reserves,” the Government Senator said, while accusing the former Owen Arthur-led Government of economic laziness.
“To earn foreign reserves was too much hard work for the Barbados Labour Party. Whereas the Democratic Labour Party entered a strategy of earning foreign reserves from our trading sectors, the Barbados Labour Party said the economy growing, we have taxes, unemployment down, everything is going well so we can borrow and repay; went on the world market and begin to borrow because the interest rates were attractive,” Ince said.
He said that the economy was growing up to the time that the DLP left office in1994 and had actually expanded by four per cent compared to 0.6 in 1993, with tourism growing by 9.2 per cent compared to 3.9 per cent the previous year; manufacturing recording significant growth as a result of export; and sugar output expanding by 6.4 per cent, breaking the trend of continuous decline since 1986.
Additionally, Ince said construction recovered by 3.3 per cent, the rate of inflation was 0.1 per cent, and while the unemployment rate was high at 21.9 per cent, it had declined from 24.7 per cent in 1993.
He also said 6,000 new jobs were created – 3,300 for men and 2,700 for women; the treasury bill rate was 8.1 per cent and deposits increased.
Amid a national debt of 140 per cent of gross domestic product (GDP) and a high fiscal deficit of six per cent of GDP, the finance ministry spokesman also responded to recent criticisms of Government’s $542 million austerity package, announced by Minister of Finance Chris Sinckler back in May, which included a 400 per cent hike in the NSRL, arguing that it was not the first time Barbadians were faced with such enormous increases.
“By 1995 in the first Budget presented by the former Minister of Finance Mr Arthur who was representing the Barbados Labour Party we had increases of fees for public service vehicles. Licence increases by 100 per cent, 300 per cent, 400 per cent. The badge for a public service vehicle went from $10 to $100, this is a 900 per cent increase,” Ince said, adding that the increases “literally destroyed the public service vehicles”.
However, he said when the DLP returned to office, it reduced significantly the fees levied on public service vehicles.
“Now that we are in office, this Government is saying we have to start looking at how we are going to start earning foreign reserves again; that we are going to borrow if it’s absolutely necessary. That is the pathway when I speak to restructuring and diversifying the economy, let us get back to the task of earning foreign reserves, instead of borrowing,” Ince said.