A day after Prime Minister and Minister of Finance Mia Mottley presented a $1.2 billion austerity Budget in Parliament, former independent candidate Leroy McClean has put forward his own economic ‘SOS’.
The national redevelopment plan, which was prepared back in January, is aimed at saving Barbados from a currency devaluation, as well as massive retrenchment of public servants.
The trained biologist who is currently employed as Executive Chairman of the Barbados Agriculture Credit Trust, also said his plan would address the island’s fiscal problems through debt consolidation and restructuring of the Government service.
“Consolidation of the debt would be funded from two sources. First by borrowing from the people of Barbados and two, by raising funds externally, mainly from international agencies and also by tapping into the Barbadian Diaspora,” McClean said.
He further explained that Government would borrow funds to pay its debt to the National Insurance Scheme (NIS), as well as outstanding Income Tax and Value Added Tax (VAT) refunds. Such loans would also be used to support infrastructure development projects, to help fund health care and to pay arrears to the University of the West Indies (UWI).
“Once the quantum of money that is required is determined, 50 per cent will
be borrowed from the people through the issuing of National Redevelopment Bonds at six to eight per cent interest per annum for ten years. These bonds would be issued at a discounted price but can be transferred or traded at face value. In other words, a $100 bond is purchased for $92 but the owner can trade it privately for a negotiated value,” he explained.
“The other 50 per cent would be raised externally in order to provide the foreign exchange component that is required to undertake infrastructural work,” he added.
McClean, who was among unsuccessful candidates in the May 24 election in which the Mottley-led Barbados Labour Party scored an overwhelming 30-nil victory but has since been hit by a defection, argued that the tax burden borne by individuals could be reduced if the tax net were widened.
He also lamented that currently too many Barbadians did not pay their fair share of taxes.
“It is therefore necessary to widen the net. This could be done through allowances to those already in the net in order to draw others in,” he said.
While likening a reduction in the public sector to a currency devaluation, McClean suggested that Government should cut its expenditure by merging some entities and “eliminating” others.
In this regard, he said the National Housing Corporation (NHC) was one Government entity that could be downsized.
“The NHC should be restructured to be a monitoring and regulatory agency,” he said.
McClean also recommended that vehicle inspection and the issuing of drivers’ licences could be brought under the Barbados Revenue Authority (BRA), thereby “reducing” the Ministry of Transport and Works (MTW) to only a technical agency that would oversee work done by private contractors, manage and maintain drainage, sanitation services and National Conservation Commission (NCC).
“By bringing sanitation services under the MTW the Sanitation Service Authority (SSA) could be eliminated. Many of the workers displaced from the MTW as a result of this change would be absorbed by the private contractors,” he said.
He also said by merging the Barbados Investment and Development Corporation, the Barbados Agricultural Development and Marketing Corporation and the Barbados Agricultural Management Company to form an agro-industrial entity, the island would be able to reduce its food import bill.
This, he argued, would result in increased employment in the sector and opportunities for those displaced from the MTW, SSA and the NCC.
He said there were also opportunities for skilled workers in boat building, net making, marine navigation and fishing as Government explores the maritime industry.
“A marine institute should be established at either The Samuel Jackman Prescod Polytechnic or the Barbados Community College in order to provide training in navigation, use of modern fishing technology, boat building, marine engine maintenance and other related topics.”
McClean said Government should also provide incentives to offshore medical and dental schools to set up in Barbados as the island seeks to attract more international students and expand the cultural industry.
“The measures here are in no way exhaustive but merely give insight into some of the things that could be done to provide short and medium-term solutions,” he said.