The business centric political party Solutions Barbados is warning the Freundel Stuart administration not to “plunder our pensions” in a desperate bid to clear the island’s fiscal deficit and improve its foreign exchange reserves.
The party’s leader Grenville Phillips II told Barbados TODAY alarm bells went off this morning when Governor of the Central Bank Cleviston Haynes said Government was considering pensions as part of the overall plan to resuscitate the stalled economy.
“Based on the report the Government seems intent on selling state assets in order to improve how the books look, but it only shows that there is no imagination whatsoever. Once you sell them, what happens next year? Once they are gone, what are you going to look to sell after that? I knew that eventually Government was going to get around to our pensions. Once the Government has sold off every national asset of value they now plan to plunder our pensions. He said that Government was looking at it but they haven’t decided as yet. This concerns me greatly,” Phillips said.
In delivering the economic review for 2017, Haynes revealed that foreign exchange reserves had sunk to a 22-year low of $410 million, or 6.6 weeks of import cover, well below the recommended 12 weeks.
Among other reasons, he said, the fact that the anticipated sale of some state assets had not materialized, contributed to the sinking reserves.
Haynes also said while Government had reduced the fiscal deficit to $399.5 million, down from $596.1 million during the corresponding period in 2016, much more was needed to sustain the trend, including reducing expenditure through “some restructuring of those statutory bodies”, and containing wages to gross domestic product.
“The issue of pensions has arisen but I believe it is an issue that Government is still considering. I don’t think that any determination has been made in that area,” he added.
It was this comment that made Phillips suspicious of the administration’s motives.
He therefore called on the Central Bank Governor or Minister of Finance Chris Sinckler to tell the country whether or not Government intended to dig into the National Insurance Scheme (NIS) or private pension funds.
“They need to tell us exactly what they are talking about. Are they talking registered retirement savings plans or NIS? I don’t know if he [Haynes] misspoke but he revealed that pensions are on the table. If it is private then it would be no surprise because they [Government] would be just continuing their trend of desperately grabbing whatever they can like a sinking man holding onto anything. If it is the NIS then that would be just unconscionable,” Phillips said.
The main Opposition Barbados Labour Party (BLP) also reacted with dismay to the Governor’s report on the economy, with BLP leader Mia Mottley describing it as the latest verdict that the country was not well.
As she has done in the past, Mottley placed the blame squarely at the feet of Prime Minister Freundel Stuart and Sinckler, accusing them of failing to take corrective action when the reserves first fell below the recommended 12 weeks of import cover.
“Barbados crossed the threshold of holding less than the desired 12 weeks of international reserves more than two years ago. In spite of the warnings from all quarters, no serious remedial action was taken by this Government,” Mottley said in a statement issued this afternoon.
“Indeed, their policies accelerated the decline. The Prime Minister and the Minister of Finance continued to swim against the tide of the facts and those who proffered professional advice. Regrettably, it is all Barbadians who are paying the price today for the incompetence and callousness of these two men, not just them alone.”
Meanwhile, Lynette Eastmond, Mottley’s former Cabinet colleague who, as head of the fledgling United Progressive Party (UPP) is now her political rival, expressed similar sentiments, charging that news of the dwindling reserves was not surprising because Government “lacked any creativity as it pertains to the productive sector”.
“Government does not approach the productive sector with the same vigour it does to collecting taxes . . . .We cannot get out of this if we do not make more money and that means generating business internationally and locally,” Eastmond said during a radio call-in programme this morning.
“It can’t just be facilitation at this stage. We need our ministers of Government to actually leave Barbados and seek this investment,” the UPP head added.