Forget about Government’s Medium Term Growth and Development Strategy (MTGDS) and get ready for the Barbados Sustainable Recovery Plan (BSRL) 2017.
Nearly four years after he unveiled the revised MTGDS as the main strategy that would take Barbados into the year 2020, Minister of Finance Chris Sinckler today effectively announced that the Freundel Stuart administration was ditching that programme to make way for the BSRL which he described as “one of the most ambitious deficit-reduction programmes in the country’s history”.
In a ministerial statement to Parliament back in December 2013, Sinckler had announced that the MTGDS would, among other things, reduce the country’s fiscal deficit to below two per cent of gross domestic product by 2020/21; achieve a more comfortable level of debt sustainability; strengthen the Net International Reserves position to at least six months or 24 weeks of import reserves cover; reduce the cost of doing business and the cost of living; enhance international competitiveness, national productivity, efficiency, service excellence and business facilitation; expand and accelerate public and private investments and preserve a strong social safety net.
However, with the economy still worryingly in the red with the fiscal deficit estimated at $279 million for the first six months of the 2017/2018 fiscal year, the country’s foreign reserves having plunged to 8.6 weeks of import cover or $549.7 million at the end of September and Government debt having soared to 144 per cent of the country’s gross domestic product, Sinckler today announced that the draft BSRL would be laid in Parliament next month, again with a view to tackling the many problem areas addressed in his 2013 ministerial statement.
At the same time, the embattled Minister of Finance sought to assure that there would not be any “wild slashing of social services or ‘beheading’ of thousands of public servants to achieve arithmetic objectives”.
Before an audience that included the Director of Economics at the Caribbean Development Bank Dr Justin Ram who recently called on Government to bite
the bullet and seek help from the International Monetary Fund, Sinckler was also adamant that public servants would not be made to bear the brunt of any new fiscal adjustments.
“We have to study the implications of all our actions. And I believe that having examined the situation carefully and completely, Government is now in a better position to roll out a comprehensive plan to tackle these issues head-on,” he said, while promising that the BSRL would be a targeted, inclusive and decisive plan and that it would benefit from wide public discourse, even as Government moves to quickly advance phase one of the programme’s initiatives.
The BSRL, which was first announced by Sinckler in his May 30 Budget, was structured and developed by three working groups coming out of the August Social Partnership meeting, involving Government, trade unions and the private sector.
The plan calls for the establishment of a local competitiveness commission, as well as a technical unit to drive the process of implementation.
Under the BSRL, a new national energy policy is also to be implemented to accelerate Government’s objectives of making Barbados energy independent by 2035.
The plan also makes provision for appropriate tax reforms, the transformation of Customs into the umbrella Barbados Revenue Authority and the implementation of a single taxpayer information technology system.