The days of Barbadians enjoying certain social services free of cost or at a minimal fee could soon be over, so too could hefty transfers to state owned enterprises (SOEs).
Minister of Finance Chris Sinckler today warned that a serious national discourse must take place on both issues, while revealing that he now had in hand the findings of an International Monetary Fund (IMF) study of SOEs which he intends to share with Barbadians in the coming weeks.
His comments come on the heels of warnings issued this week by both the Central Bank and the Washington-based IMF that the island’s economic growth was slowing, with foreign reserves currently at a 22-year low of $410 million, or 6.6 weeks of import cover, well below the recommended 12 weeks.
Both entities are currently forecasting that economic growth will slow to at least 0.5 per cent this year, down from one per cent in 2017 and 1.6 per cent the previous year, with Government’s overall expenditure on the increase and lower than expected tax revenues from the austerity measures introduced last year, including the controversial National Social Responsibility Levy which generated only about $115 million, a long way from the $218 million it was expected to bring in from July 1, 2017 when it was raised from two per cent to ten per cent of the customs duty on imported and locally produced goods, to the end of the fiscal year in March.
In its latest report issued on the same day that the Central Bank Governor Cleviston Haynes issued his assessment, the IMF also warned that domestic inflation was set to rise to a worrying 5.5 per cent by the end of this year.
While acknowledging that the country was going through some tough economic challenges, an under pressure Sinckler, who has in the past been reluctant to make such cuts on the recommendation of former Prime Minister Owen Arthur and other leading economists, today finally agreed publicly that urgent changes were needed that would affect “the quality of the social services that we have to provide, and the cost of them”.
Speaking in Parliament during debate on a land resolution, Sinckler said it was time for serious discussion on the matter.
And while not giving any indication of the extent of the changes to be made, he said areas such as housing, health care, water and transportation would have to be reviewed.
“So the quality of the social services that we have to provide, and the cost of them, we are going to need to have a fundamental debate,” Sinckler stressed.
In terms of the 63 statutory agencies which are said to benefit from over $1 billion in transfers and subsidies, Sinckler reported that “in a couple weeks time I am going to bring and make a document of this House, a technical report that was done by a technical mission through CARTAC by the International Monetary Fund on state owned enterprises.
“We just received it today,” he disclosed, while warning that “we will see that this is not a Democratic Labour Party problem, this is not a Barbados Labour Party problem, this is a Barbados issue to be dealt with and we have to collectively as a country, to make some serious decisions regarding how we deal with major issues . . . relative to social entitlement programmes – education, health care, public transport, water and housing.”
The Minister of Finance, in the past had also cautioned that Government would soon have to consider which entities to merge and which ones to privatize. However, with the Opposition currently clamouring for Prime Minister Freundel Stuart to announce the date for the elections which are constitutionally due here by June, Sinckler made it clear that decisions would not take place “in the dead of the night at a political meeting”.
Meanwhile, in what could be seen as a swipe at the US authorities in relation to a health alert issued late last month that the island’s tap water on the south coast was not safe for consumption, Sinckler said on the contrary “queens, kings and even presidents” could consume it.
He added that the water in Barbados “is and will in the future be considered the best quality water to be found anywhere in the world”.
“The president [of the US] don’t have to drink a diet coke, he can drink water [from Barbados]. There is no bottled drink like a glass of Barbadian water. And if you want to go down the road of having some fast food, you can get a roti from Chefette, you don’t need any Big Mac,” he said after a new book recently claimed that US president Donald Trump was a regular eater of fast food.