A Government spokesman has rejected out of hand recent calls for the Freundel Stuart administration to significantly slash its expenditure, especially in the area of transfers and subsidies.
Presenting the ruling Democratic Labour Party’s weekly Astor B Watts lecture on Friday, Member of Parliament for St Michael West Central James Paul warned that if Government were to reduce its expenditure to the extent that the various agencies, including the International Monetary Fund (IMF) and the Caribbean Development Bank (CDB) were suggesting, the island could descend into social chaos.
“I hear what the CDB says, I hear what the IMF says, I hear what Standard & Poor’s says and [others], but at the end of it Barbadians must put Barbados first because when we implement some of the measures they are talking about I hope people understand, when you look out your window you see your neighbours,” he said.
“The fellows up at CDB may live in a gated community in Barbados . . . [and] I am saying that certainly the economists in this country can come up with better recommendations than what I am hearing,” he added.
Earlier this week the CDB reported during its annual news conference that the Barbados economy would grow by an estimated 0.7 per cent this year, making it the worst performing economy for 2018 among the bank’s 19 borrowing member states.
Besides capping the wage bill, CDB’s Director of Economics Dr Justin Ram suggested that Government should take urgent steps to reduce its fiscal deficit, which currently stands at 3.7 per cent of gross domestic product (GDP); slash spending, especially in the areas of transfers and subsidies, and to implement an “effective debt management strategy”.
The top regional economist had also called for increased productivity and competitiveness, human development, strict enforcement of building codes and adequate insurance coverage to ensure greater preparedness against natural disasters.
The recommendations are similar to those offered by the IMF, the Central Bank, as well as local and regional economists, including former Governor of the Central Bank Dr DeLisle Worrell, who has gone as far as to suggest that Government cuts about 4,500 workers from the public service.
However, Paul, an agriculturalist, insisted today that those recommendations were not clearly thought out, and would only lead to a poorer society.
“I really want to appeal to people. Do not listen to these false prescriptions. I call them false prescriptions that lack thought, that defy the intelligence of Barbadians who know better anyhow,” he said, adding that “economists are like historians because they report things after the fact, and while they make predictions they can be right or wrong”.
Paul suggested that the economy remedies which were currently being offered up would “create another form of slavery in this country.
“That is all it will do because all it will do is make poor people poorer and the rich will get richer at the expense of the poor,” he said.
However, agreeing that Barbados had found itself in a position where it was importing more than it could really afford with dwindling foreign reserves, which stood at just 6.6 weeks of import or $410 million as at December last year, Paul pleaded for policies to be put in place to help drive local production.
“The IMF would like to see things a certain way and when I heard these things from CDB I say, ‘what is going on here?’ You know what they said to Barbados: ‘Reduce your expenditure’. . . . Look at the lack of wisdom in that. I attack it because there is a lack of wisdom in that,” Paul told the gathering of DLP faithful.
“The fact of the matter is that a lot of the prescriptions we hear coming from a lot of our economists are not based on any feeling for this country. Understanding the implications. Getting the numbers right will not do it,” he said, while warning that the proposed measures would spell massive layoffs.
“When all those people go home where are the opportunities going to be created?” he asked.
He insisted that what the country needed now was continuous investment in areas that would help it to earn foreign exchange.
Pointing out that Barbadians had a lot of money “sitting down on the bank not earning any money”, Paul also urged the private sector and residents to ask themselves what strategies they could put in place to help the ailing economy.