There is hope yet for the Barbados economy even at this late stage where it is on the brink of collapse, according to former Governor of the Central Bank of Barbados Dr DeLisle Worrell.
However, he warned that this “alternative future” can be obtained only if the authorities act decisively and do the right thing, some of which will be painful.
“As I write this in the last week of 2017, the outlook for the economy is dire,” Worrell wrote in his latest economic newsletter, 2018: The Outlook for the Barbados Economy, released this week.
“Even at this late date, an alternative future is attainable . . . Firm, decisive and urgent action is needed to turn the economy around and set the country on the road to economic prosperity,” he added.
The latest document contains much of the same recommendations which the fired governor had made last month in his paper, The Barbados Economy: The Road to Prosperity.
He made specific reference to the unpopular National Social Responsibility Levy (NSRL) and two per cent tax on foreign exchange transactions, charging that they were responsible for pushing the economy into further decline.
In fact, Worrell echoed a point made this week by Chairman of the Barbados Private Sector Association Charles Herbert that Government’s economic policies were hurting investor confidence.
“The new taxes are driving the economy into recession, and the declining reserves have undermined investor confidence. The country’s low credit rating means that it has no access to foreign market borrowing, and maturing debt has to be repaid in full,” the noted economist said as he painted the dismal picture of the economy.
With the international reserves plunging to $549.7 million or 8.6 weeks of import cover at the end of September, and with Government having to face over $100 million in foreign debt and interest payment during the last quarter of last year, Worrell again proposed a series of measures to restore foreign reserves, eliminate Government overspending, stimulate sustainable economic growth and repair the island’s credit worthiness.
He again promoted a seven-point plan he had recently put forward, including cutting the public service by 4,500 over three years, with funding from international financial institutions for the separation packages, as well as a ten per cent cut in subsidies to state enterprises.
He also repeated his proposal for “an aggressive” programme of divestment of some statutory bodies, a temporary freeze of all public investments, except those funded by foreign finance, final approval and start of work on all tourism projects that were to have started last year and negotiations with key lending institutions, including the International Monetary Fund, to support a five-year programme of structural adjustment, with strong conditions that fiscal reform will be implemented.