It has only been six months, but already one of the three finance ministers is touting the beneficial effects of the Barbados Economic Recovery and Transformation programme (BERT) on the economy.
Minister in the Ministry of Economic Affairs and Investment Marsha Caddle said that while Barbados’ foreign reserves were in a perilous state just before the May 24 General Elections, with only four weeks of “cover” left then, the position had improved tremendously during the Mottley administration.
“When we came to office, there was only $400 million of foreign reserves, representing four weeks of cover. However, once we have secured the transfer of funds from the Inter-American Development Bank under BERT, our reserves should move to almost a billion dollars by the end of December this year,” she told the House of Assembly.
Beyond that, she said, the deficit has been “eliminated after a decade of unsustainable deficits, so we have been able to pay this year’s VAT refunds and income tax refunds. It is the first time Government has been current for six years, and over the next ten years we will run a primary surplus to bring our debt to GDP ratio down to the 60 per cent we are seeking by 2033.”
Caddle’s comments came during debate on an amendment to the Central Bank of Barbados Act.
Caddle, who shares ministerial duties in the Ministry of Finance and Economic Affairs with Prime Minister Mottley and Ryan Straughn MP, said that one of Government’s aims was to ensure that the most vulnerable Barbadians did not bear the full brunt of the economic restructuring exercise.
“Part of this programme related to a domestic and external debt restructuring which was necessary to ensure we did not place the full burden of the adjustment on ordinary Barbadians.
One of the major contributors to that debt restructuring was the Central bank. If the Central Bank was not a key part of the domestic part of restructuring our debt and making certain sacrifices regarding its own balance sheet, there would have been more of a burden on pensioners and other creditors in this country. The Central Bank has taken on a big share of this adjustment burden.
This bill seeks to go further and to address any consequences of that adjustment,” she told the House.
In his contribution, Minister of Labour Colin Jordan sought to reinforce the Central Bank’s role in the economy. “The Central Bank has to ensure monetary policy of a country does not result in runaway inflation and putting pressure on foreign reserves. It is a regulator whose purpose is to get actors in an economy to act in a particular way, and it must act independently without political interference,” he said.
The BERT programme was not imposed on Barbados by the International Monetary Fund (IMF), but was developed by his party’s team of economists and met that agency’s approval, said Jordan.
“We presented a programme to the IMF and they agreed to support it owing to its well structured nature. The result of its implementation is a renewed investor confidence in Barbados, so new projects are coming on stream because this programme has shown the investing public that we are serious, so they can invest their resources confident they will get a return on them eventually.”