Prime Minister Freundel Stuart has suggested to Barbadians demanding answers from his administration over the country’s rapidly declining foreign reserves that they should look no further than their own lavish lifestyles.
Speaking at a joint meeting of the Democratic Labour Party (DLP) branches in St Michael, which was held at St Michael School, Stuart contended that Government could not be blamed for the state of the country’s international reserves, which plummeted further below the 12 weeks benchmark to reach just 8.6 weeks of import cover or $549.7 million at the end of September.
“When you hear that our foreign reserves are under pressure it is because of what we import and because of what you all go on the supermarket shelves and see. It is not that anybody in the Government is stealing foreign currency and carrying it and putting it under their bed,” he said to loud applause from the DLP faithful who packed the auditorium.
“The 130,000 vehicles on the streets of Barbados, not one is manufactured here in Barbados. They were all bought with foreign currency out of Japan and those other countries from which we may buy motor vehicles from time to time. That is where the foreign currency goes. With that kind of importing and of course the 10 or 15 different types of detergent we see on the supermarket shelves and the wide range of nuts and salted chips, none of which we produce here but which has captured the taste of the people in the population,” he added.
The Prime Minister said that with the global recession making it difficult to earn foreign currency, and with Government’s reluctance to borrow, there is no choice but to use the reserves to finance the lifestyle that Barbadians have become accustomed to.
He said that in a five-year period between 1996 and 2001 when the Barbados Labour Party (BLP) was in office, the country borrowed over $1 billion in foreign exchange “to finance the lifestyles that we have grown accustomed to”.
Therefore, he said, if Barbadians wanted to continue this lifestyle, “we have to earn foreign currency to do it.
“We have spent most of the time supporting that lifestyle by borrowing foreign exchange,” he stressed.
Stuart took a shot at BLP leader Mia Mottley, whom he said supported his position on the issue when it suited her.
He contended that when former Prime Minister Owen Arthur replaced Mottley as BLP leader in 2010, she made “patriotic speeches” quoting late Prime Minister Errol Barrow on the cost of living, but changed her tune as soon as she was returned to the helm of the party.
“When it suits the Opposition you would hear their leader [Mottley] say, quoting Barrow, ‘the problem in Barbados is not the high cost of living, the problem in Barbados is the cost of high living’. You will hear her say that. She said that when Owen Arthur ousted her and she was making patriotic speeches from another part of the Opposition bench. It was convenient to make that admission then but once she got back in the Opposition Leader’s chair, the old demon resurfaced,” the DLP head said.
In his third quarter report, Acting Central Bank Governor Cleviston Haynes that the island’s foreign reserves position was currently out of whack, having fallen by US $86 million in three months. He also raised concerns that the downward trend on the international reserves was putting more pressure on the stability of the Barbados dollar.
“Despite moderate economic growth and policy-induced reduction in the fiscal imbalance, the Barbadian economy continues to face significant economic challenges. In particular, strengthening of the international reserves is needed to ensure that the reserve buffer remain adequate in order to protect the fixed exchange rate peg,” the acting governor stressed.