The jury is still out on whether the Barbados Economic Recovery and Transformation (BERT) programme will be enough to stem the tide of economic turmoil, the Caribbean Development Bank’s chief economist told journalists today.
The CDB’s Director of Economics Dr Justin Ram said while it was critical that the Mia Mottley administration stick to its targets, it should also focus on improving the country’s ease of doing business and reduce joblessness among young people.
“Our assessment of the BERT programme, it is still early days, but the progress made thus far is very heartening,” Dr Ram said at the CDB’s annual news conference at the regional development bank’s headquarters at Wildey.
But the CDB official praised as “very good” the Government’s significant reduction in the ratio of debt to gross domestic product from 170 per cent to 127 per cent.
Dr Ram: “There is still some more that has to be done with respect to fiscal consolidation. Again, what would really propel the Barbados economy into a transformation is doing the institutional reforms that will seek to improve the ease of doing business. I cannot reiterate that enough.”
Pointing to the Grenadian and Jamaican experiences, the CDB official said obtaining economic growth was critical.
At the end of last year the Barbados economy shrank by 0.6 per cent.
The CDB chief economist told reporters: “What is critical is that throughout the BERT programme, the Government sticks to the task of these institutional reforms to help drive growth. Those reforms will help to improve the business environment so that investors can feel confident to bring their resources into Barbados and also for local investors to start investing so that we can see more opportunities in terms of employment for those in the society.”
Dr Ram appeared to back the BERT programme as a measure to curb an unsustainable level of debt and chart a path for economic transformation.
Following an agreement with the International Monetary Fund (IMF) last year for a $580 million Extended Fund Facility, Barbados benefited from a $150 million loan from the CDB to support the implementation of the BERT plan to enable fiscal sustainability, reform institutions for economic growth and boost social protection.
The CDB also lent $40 million to upgrade infrastructure at Grantley Adams International Airport.
And more CDB assistance is on the way for the struggling economy, as Government sought ways to address outstanding social issues, according to the bank’s Director of Projects Daniel Best.
Best said: “The Government of Barbados has reached out and we have been in discussions with them to shore up the social protection systems, ensuring that one, there is capacity within government to provide the kind of counseling, psychosocial support to the most vulnerable, but also develop and enhancing an all encompassing social protection system in responding to the BERT programme.
“In doing that we have identified some resources. We have been in discussions with the respective ministries and we look forward to supporting government in that respect.”
In his annual report on the region’s economic health, CDB President Dr Warren Smith said that after experiencing an average growth of 1.8 per cent last year, CDB borrowing member states are expected to grow by about two per cent in 2019, as construction, tourism, gold and oil industries expand.
But the CDB is forecasting zero growth for Barbados this year, following a disappointing -0.6 per cent decline last year, despite modest gains in the main breadwinner, tourism.
Pledging the financial institution’s continued support for the BERT programme, the CDB president said: “We will further support BERT with more policy-based funding over each of the next three years.”
To sustain any gains over the medium-term, Smith said, CDB borrowing member states will need to “step up their efforts to build long-term resilience and tackle the challenges of climate change, wide fiscal deficit and high public debt, as well as high unemployment especially among the youth”.
Last year, the development bank approved projects totaling just over $700 million, and disbursed some $560 million, a 20 per cent increase in lending over 2017.
Describing this as a pleasing performance, Smith said it was an indication of the bank’s efforts to help the region in its development.
One of the pillars of the regional integration movement going back to CARICOM’s predecessor, the Caribbean Free Trade Association (CARIFTA), the CDB marks its 50th anniversary in October.
At some point we will be obligated to transition from loans to local economic activity. It appears that the emphasis is top heavy towards foreign investment. I still maintain that we have a way undervalued agricultural sector, which, if given the time of day, can add significant economic activity to the country. Everyone has to eat.
Let them criticize Dr. Best and Dr.Smith now too, we have repeatedly stated that the B E R T alone will not bring the desired results of growth to our economy.
There must be effort to attract sustainable employment / business opportunities for our young people. Therefore agriculture and energy are areas that can bring immediate and continued expansion / growth. We continue to look at tourism and off shore business as our main sources, with construction for desert, as seen in move to take the cruise terminal north. What happens if there is hostility in the developed world, with family members on the battle field and others unable to travel? That would mean we’re stuck with an annual payment for an asset that can’t pay for itself while struggling to feed our people because of the increase in energy and food import cost. While I’m not saying a cruise berth in the north will not create economic activity in that area, I’m saying this is not ‘mission critical’. We are still being lead by, and find ourselves chasing ‘the great white hope’ that has passed us by decades ago.
If we reduce our food and energy import expenditure we will have money to develop our country in a most sustainable way for all the people, and not only for those who are taking our land straight from sugar production to hospitality while bypassing the real critical need for food and energy security. Can someone to whom our government will listen speak to them.
Again the bus (Barbados) is being driven by those who fly planes, only our government employs pilots to drive buses, that’s why we find ourselves at the same destination every few decades. Somewhere in the sky dangling dangerously, having to borrow our way back to the ground, and exposing our people to hardships after the fruits of their labour is mismanaged by both government, the private sector and facilitated by the trade union movement. God send an answer for we please. Why would the
B L P feel they can do the same things, the same way and get a different result I don’t understand.
“Early days yet on berts impact”
That is not true at all.
WHITE BAJANS and INDIAN MUSLIMS ARE REAPING SWEETS because of bert. Tax breaks grand mother for them.
BLACK PEOPLES lot from bert, is joblessness, cant pay their bills, have to return home to their parents homes, hunger, increased taxation, BROKEN DREAMS.
Bert was not designed to promote growth on its own. It was designed principally to restructure government expenditure and create an environment for growth. That and the drop in corporation taxes should help the private sector going forward.
Witness what is happening to the Transport Board. They are clearly out to sea. The Minister and Chairman changes their model every month. When the chair said tenders for electric buses were going to be closed within a few days Bizzy Williams was announcing to the world that he already had a deal to bring in electric buses for the same board. Then they decided that since they could not incur debt all expenses had to be paid from revenue collected from drivers. Today on VOB a voiceless not of a union delegate said the chair informed that that model was not sustainable so 309 more persons are to be laid off. They are now getting 30 or 40 buses on the road unlike the Trinidadian Consultant who got more than twice as many on the road. There will be much sorry at the board over the next three months.
The Professor of Victimology (CCC) is at it again. Can you say something positive that is liberating and can uplift your victims.
Back at yuh; Do you understand that for 10 years and 90 days BLACK PEOPLES were up the creek in joblessness, couldn’t pay their bills, had to return home to their parents homes, hunger, increased taxation, BROKEN DREAMS.
Here is tit bit for you and pass it on to the Assistant Professor (Jennifer):
“The first step toward success is taken when you refuse to be a captive of the environment in which you first find yourself.”- Anon.
The transport board is definitely a challenge for all involved, as it has been for well over 10 years. They have a fleet now that is one third of what is was so the question is can they also bring their overheads to one third of what it was as well? Unfortunately there is no fix to the board that will not include massive layoffs and a painful restructuring, assuming we want to keep it without it being a massive drain on us the taxpayers that is.
Mike you are pure emotions. Where are the facts? The unemployment rate for the previous ten years was better than the current. How many people went back home? Were bajans better off than they are now wth additional taxes after being told we could not tax our way out of recession?
John,
The TB is in the way it is because of greed. I blame the politicians, the drivers and the union.