The Freundel Stuart administration is targeting an unemployment rate of five per cent by 2020, down from the current rate of 9.7 per cent, as part of its growth strategy.
In its draft Barbados Sustainable Recovery Plan (BSRP) 2017, a copy of which was obtained by Barbados TODAY ahead of its tabling in Parliament next month, Government also predicts three to four per cent economic growth in three years if everything goes to plan.
The 104-page document forms a framework for the national economic sustainable development and recovery plan for the country, and has as its core vision “a society that is economically, environmentally and socially sustainable with return to investment grade”.
There are six main goals – to build a comfortable net international reserves level; achieve fiscal sustainability through a balanced budget; accelerate real gross domestic product (GDP) growth to reach four per cent by 2020; establish a credible and sustainable debt management plan; enhance social and environmental sustainability; and reduce unemployment levels on average to five per cent.
In the framework document, which was prepared by the Ministry of Finance in consultation with the Social Partnership, the administration said the vision and the six goals would be pursued “in the context of an accelerated, time-bound and measured approach to the implementation of an agreed set of more prudent financial management sustainable growth measures that are socially responsible and sustainable.
“This 2017 framework will build on Barbados’ growth and development strategy 2013 to 2020 in seeking to address the phases of adjustment and reform, which are necessary pre-conditions for a sustainable economic and socially responsible recovery,” it said in the executive summary.
Stating that the introduction of a recovery plan was supported by the Social Partnership as well as Stuart, the authors of the document said it would help to “chart an immediate, short, medium and longer-term agenda for growth and development of Barbados’ economy and society.
“This programme focuses on setting out a clear and concise national plan aimed at addressing several of the key areas of restructuring which this economy urgently requires,” it said.
In that regard the document identified nine main areas, including boosting the foreign exchange earnings through the creation of more attractive conditions for foreign direct investments and sector reform, which focuses on the reduction in the cost of doing business.
There are also plans for the establishment of a competitiveness commission and an operational unit “to drive implementation”; execution of the new national energy policy; fiscal consolidation through various means, including public financial management reform; the reform of state-owned enterprises, including mergers, operational consolidation and divestment; and the completion of tax policy reform and tax administration upgrade.
Stabilization and reduction of the national debt through fiscal reform, as well as social sector reform in areas such as health, education, social care services, education and environmental protection also form part of the plan.
These measures are in line with recommendations by the Washington-based International Monetary Fund on Wednesday, following its Article IV Consultation here over the past two weeks.
The draft plan also identified some weaknesses it said must be addressed for the objectives to work.
“Central to this plan is the recommendation to radically accelerate the slow pace of policy implementation, programmes, projects and initiatives. This remains a major structural challenge in Barbados, which affects the efficiency and effectiveness of the public sector and the private sector,” it said.
“There is an overwhelming level of consensus among the Social Partnership that this is the number one weakness to be urgently corrected for Barbados to achieve a sustainable recovery and the quantum efficiency and productivity gains going forward. This requires urgent systemic restructuring and process reform and improvement in the management of public service. Public Officers, particularly management will be held accountable for the implementation of policies, programmes, projects and initiatives falling under their purview,” it added.
The new plan also outlined five thematic areas – fiscal, growth, foreign exchange, environment and social – with each objective accompanied by a series of strategies to “give credence to a swift and effective economic recovery of the Barbadian economy”.
“They also provide reassurance and confidence that the Barbadian economy will be restored to a steady state equilibrium of pre-crisis levels. The pre-crisis steady state dictates that the economy grows on average at three per cent over the medium-term with adequate fiscal space and a solid foreign exchange buffer,” it said.
The document gives an overview of various sectors and a summary of the economic and social performance of the economy up to September 2017.