The Freundel Stuart-led Democratic Labour Party (DLP) Government is currently on a road to nowhere and the latest International Monetary Fund (IMF) assessment of the island’s economic situation has confirmed this, the Opposition Barbados Labour Party (BLP) has said.
In fact, two BLP economists have cried shame on the DLP administration for its handling of the economy, saying they were concerned that things were getting worse instead of improving, despite burdensome tax measures.
BLP candidate for Christ Church East Central Ryan Straughn and the party’s candidate for the St Michael South Central Marsha Caddle spoke to reporters during a media conference today in response to the latest IMF Article IV Consultation which ended in the release of a preliminary assessment yesterday.
Straughn, an economist and past President of the Barbados Economic Society, said he was concerned about the direction in which the country was headed, adding that most worrying was the fact that Barbados’ foreign reserves declined by about four weeks in the last quarter of last year.
“There is nothing within the trajectory of Barbados today that suggests that a similar performance will not occur this year,” said Straughn, while pointing to the mere 8.6 weeks of import cover at which the reserves stood at the end of September this year.
In its latest report, the IMF also warned that without divestment proceeds, the overall fiscal deficit would only decline to 4.1 per cent of gross domestic product (GDP) in financial year 2017/2018.
At the same time, while Government is seemingly intent on achieving a surplus of 4.4 per cent of GDP in financial year 2018/2019, the lending agency suggested that it should aims instead for a 7.5 per cent GDP surplus by financial year 2020/2021.
“This report is probably the most damning piece of evidence because last year the IMF said we had turned the corner . . . . But this report shows you which corner we actually turned last year, because all of the metrics compared to last year are worse. Therefore we now have to be very clear in our mind, these policies are leading us nowhere,” Straughn added.
The noted economist said he was worried that despite the introduction of a suite of measures designed specifically to generate growth by way of boosting the reserves, reducing the deficit and lowering the national debt, currently estimated at in excess of 100 per cent of GDP, the island simply was not achieving the desired results.
He said he was even more concerned about the current cost of living, which was being made worse by the most recent tax measures, especially the controversial National Social Responsibility Levy, which was increased from two to a whopping ten per cent on July 1.
Reiterating the views of Opposition Leader Mia Mottley, Straughn said once elected, the BLP would repeal the burdensome NSRL. However, he opted not to say exactly how the party intended to replace the lost revenues.
“We must remove that which is hindering growth and therefore, that is what we intend to do. So long as we are able to do that, it means that cost of living immediately comes down and the cost of doing business also reduces,” Straughn said, adding that “over the course of 12 months or so then we would start to see revenues recover because of natural increase in economic activity”.
He also stressed that “there are other things other than taxation and spending that can generate growth,” while promising that the BLP would discuss other revenue generating measures “at a later date”.
The BLP candidate for Christ Church East Central however described the level of “burdensome taxation” over the past nine-and-a-half years as “scandalous”, adding that despite the sacrifices that Barbadians were making by paying more taxes, they were yet to see any measureable improvements in various services, including health care and road works.
“Yet the very targets they said were vital to achieving stability are all going in the wrong direction. So the simple question is this, how many plans does it take before Barbados realizes that the Government is incompetent? How many plans does it take before Barbados realizes that this is a road that is leading to nowhere?” he asked.
For her part, Caddle said the IMF statement suggested that “Barbados is even in further decline” and that the latest fiscal measures had “failed on every front”.
“It has failed to close the deficit as was anticipated [and] it has in fact taken the Barbados economy into a further recession. So this NSRL and the attendant suite of policies have in fact created what is a trinity of failure. It has failed to boost reserves, it has failed to address the deficit, it has failed to bring about real growth in the country.
“So the IMF press release joins the last ‘Doing Business Report’. In fact, it joins the last Central Bank assessment in showing that the Barbados economy continues to be in trouble, the management of it does not have much credibility and it is time for us as a country to be as concerned as all national, regional, and international institutions and experts have shown themselves to be,” Caddle said.
The two candidates charged that the DLP administration had lost all credibility, and the Mottley led BLP was ready to take the steering wheel.
“We are preparing to govern. We are not waiting until day one, so to speak, before we start looking at the issues. I think one of things that will distinguish us in the Barbados Labour Party from the Democratic Labour Party and anybody else for that matter, is that we are prepared to deal with this crisis tomorrow if and when the people make that determination,” Straughn said.