Barbados essentially gave up a chunk of its sovereignty when it signed on the dotted line to receive the US$290 million loan from the International Monetary Fund (IMF).
This is the suggestion of former Prime Minister Owen Arthur, who argued that pre-conditions of the IMF arrangement demonstrated scant respect for the sovereignty of Barbados.
Speaking this morning at the University of the West Indies Global Belt and Road Research Symposium at the Errol Barrow Centre for Creative Imagination, UWI Cave Hill Campus, Arthur charged that by subjecting itself to an independent IMF oversight, Government had surrendered exclusive rights provided by the constitution of Barbados.
“There is a need for all international organizations to exhibit respect for the sovereign rights of all nations. In relation to this matter, the Constitution of Barbados vests exclusive powers in the Cabinet of Barbados within the context of the exercise of collective responsibility. Yet, the recently concluded IMF programme requires that there has to be an independent evaluation committee to oversee the way in which the Government of Barbados carries out the agreement,” said Arthur.
The former Prime Minister, who also held the portfolio of Minister of Finance from 1994 to 2008, suggested that the concept of independent oversight implied that Barbados and other countries that accessed IMF funds were incapable of managing their own affairs.
“The Government of Barbados must live up to terms of its agreement with the IMF but it should not have to answer to any entity in carrying out its executive powers on the matter. Joint commissions for overseeing the carrying out of obligations are common but the concept of an independent commission carries the stigma, that left to themselves, countries that benefit from access to the IMF resources will indulge in anticipated wrong doing,” he said.
In making his argument Arthur pointed out that such conditions were not part and parcel of financing options available in China.
“Thus far, China has entertained no such misgivings in its relationship with Caribbean countries and it is to be anticipated that none will arise in the future,” he said.
Arthur further argued that this was not the only manner in which Government has shot itself in the foot where the IMF arrangement is concerned, having agreed to conditions that several of the sanctioning countries could not be bothered to attain themselves.
“Barbados has recently had to agreed to an IMF programme central to which has been the agreement to reduce its debt to GDP ratio and to realize the largest primary surpluses of any country in the world. Both of these will take a toll on the wellbeing of our people. That fiscal consolidation programme had to be sanctioned by countries like Japan and Italy, which has the highest debt to GDP ratio of any country in the world, and are doing nothing about it,” lamented the outspoken economist, suggesting that the IMF has prevented Barbados from using measures that have served advanced countries quite well in the past.
“Under that programme, Barbados had to agree that it would not use any restriction or any other devices that can hurt international prosperity as a means of solving our balance of payment problems or to protect its small and medium-sized industries. Yet we too easily forget that in the early stages of their development, the advanced countries of today used protectionist devices to safeguard their domestic enterprises to telling effect,” he stressed.