The eight-month-old United Progressive Party (UPP) says it is not at all surprised by the “rather dismal” economic report presented by Central Bank Governor Cleviston Haynes on Tuesday.
In a statement today, UPP leader Lynnette Eastmond, who will be carrying her party’s banner in The City of Bridgetown in the next elections, also took issue with a number of statements made by Minister of Finance Chris Sinckler back in May when he presented the national Budget.
In fact, Eastmond suggested that much of what the Governor had to say in his nine-month review was “preordained” by Sinckler’s presentation, which she said gave no indication that the Government was serious about achieving an economic turnaround.
On the contrary she said, the Freundel Stuart administration has been behaving as if it had the luxury of time on its side, even with the island suffering downgrade after downgrade, which she warned would ultimately limit Barbados’ capacity for commercial foreign borrowing and affect investor confidence both locally and internationally.
While seriously questioning whether the island was getting bang for its tourism buck, Eastmond pointed out that though Sinckler’s seemed buoyed by the tourism sector which he said reflected growth comparable to the “pre crisis” days, the performance of the economy during the first nine months of the year was anything but robust.
“The [Central Bank’s] report demonstrates that during this period the average length-of-stay contracted by 4.3 per cent,” the UPP leader said, pointing out that this was the third consecutive year of decline.
She also said the fall off in United Kingdom market, which was attributable to the effects of Brexit and a weak British pound, was a reflection of what was happening on the ground in Barbados “where the retail and restaurant sectors are not seeing the vibrancy which would be associated with a robust tourism sector.
“It also raises the perennial question as to whether Barbados benefits from the repatriation of foreign exchange commensurate with its tourism spend, which according to the Estimates of Revenue & Expenditure (2017-2018) now stands at some $181, 995,401,” Eastmond said.
Following the Governor’s presentation, the UPP leader also said the absence of credible statistics for the international business sector was a cause for great concern.
However, in his May Budget, Sinckler had acknowledged that the sector had been on the decline with a loss of some $200 million annually over the last seven years, representing a total loss of some $1.4 billion since 2010.
Eastmond was equally concerned that the Governor did not make mention of any gains in the Cultural Services sector, even though Sinckler had indicated that a major injection was made into that sector.
“What is also absent from the report of the Governor of the Central Bank is any focus on the two traditional sectors within the Barbados economy, manufacturing and agriculture, which have over the years been a tangible contributor to our foreign exchange inflows,” Eastmond said, adding that “there has been a failure by the Government to revive these two sectors not only as foreign exchange earners, but as a means of reducing foreign exchange loss and the country’s growing food import bill which stands at approximately $600 million.
“This failure in the export sectors is now reflected in the fact that the international reserves declined by $133.9 million to $549.7 million.
“Barbados has only eight weeks of import cover. The Central Bank has been valiant in its efforts to stem the outflow of foreign exchange and to reduce the printing of money. Nevertheless it has been a long time now since the Government recognized that the economy was in crisis,” she said, while accusing the ruling Democratic Labour Party administration of raiding the “pocket books” of taxpayers.
“This is of course unsustainable,” the UPP leader said in light of the $542 million austerity package announced by Sinckler in May as a means of erasing a $537 million deficit.
However, she argued that a comprehensive economic recovery plan was still needed to address “smart borrowing, staged debt and tax reduction and diversified growth in all productive sectors”.