Thumbs are up – way up – for the way the new administration has made some tough decisions as it wrestles with Barbados’ massive debt, one of the development partners it helped create has said.
The praise has come from a key official of the Barbados-based Caribbean Development Bank (CDB), whose permanent headquarters and sole offices have been here since it was set up in 1970 as a key player in regional development and integration.
“I am very, very optimistic about the prospects for Barbados. Yes, initially in the short term it is going to be difficult, but as you can see the Government of Barbados should really be applauded for taking the tough steps in trying to move this economy to where it should really be – to improve its competitiveness and to bring down its debt to GDP ratio significantly,” said Director of Economics at the Caribbean Development Bank (CDB) Dr Justin Ram.
He also said he was pleased that this country’s leader was keen on ensuring regional integration become a reality.
Ram was addressing a small audience on Monday at an economic symposium at the Errol Barrow Centre for Creative Imagination on regional economies in the wake of the 2008 global crisis.
Faced with a massive debt of more than 170 per cent of gross domestic product (GDP), a wide fiscal deficit of more than four per cent and low reserves, the Mottley administration immediately embarked on a debt restructuring programme with an International Monetary Fund (IMF) backing, after taking the reins of government at the end of May.
Government has also announced a range of austerity measures, with pending reform of state-owned enterprises as part of a wider Barbados Economic Recovery and Transformation (BERT) plan.
Ram said it was also critical that Barbados and other Caribbean islands pay close attention to improving the ease of doing business in order to attract more foreign direct investment if they were to see “a real turn around” in economic activities.
Stating that the region could no longer afford to be “shooting in the dark”, Ram also urged Caribbean leaders to ensure data was being collected in order to help them make pertinent decisions. He also called for measures to be put in place to lower the unemployment rate, which he said would be a major factor to the region’s economic recovery.
Singling out Guyana as a Caribbean country where there were imminent investment opportunities due to its record-breaking oil find, Ram said out of the global recession there would be some “real opportunities” for the region.
As such, he called for the Caribbean to move with haste in fully implementing the Caribbean Single Market and Economy (CSME).
“I believe at this point fortunately we have here now a leader amongst our prime ministers in the Caribbean who wants to push for more regional integration. I think it is really time for us to wake up and start moving further on the CSME,” said Ram.
“I think now is the opportunity for us to open up these markets so that we can have our labour moving freely within the Caribbean. Folks it is time for regional integration. Let us grab this opportunity while we can . . . I know there are significantly more opportunities for our corporations if they can trade more freely across our region. We can see the economies of scale and profitability increasing,” he said.
He said in order for the region to experience a turnaround in economic fortunes, it should also focus on addressing gender inequality in relation to pay and access to opportunities, and incorporate greater use of technology.
“Regional integration will be key. Unless we do that a lot of what I have said here will not work,” insisted Ram, who pointed out that if residents were not going to feel the benefits then “we are going to have a backlash”.
Ram also took issue with the cost of intra-regional air travel, suggesting that “if we really want to recover as a Caribbean region this is an area that we really do need to tackle”.
One positive impact of the global recession, he said, was the noticeable shift towards renewable energy in the CDB borrowing member states.