Barbados has received a passing grade from the International Monetary Fund (IMF) on its first quarter review of the targets set by the home-grown Barbados Economic Recovery and Transformation (BERT) programme.
But Prime Minister Mia Mottley has declared that she won’t be celebrating just yet given there is still some distance to go to bring about sustainable economic growth and prosperity.
Delivering his verdict at an exit press conference at Government headquarters on Friday morning, the IMF’s head of mission to Barbados, Bert Van Selm, said the Government continued to make strong progress in implementing its “ambitious and comprehensive” economic reform programme.
He said following “productive” discussions, the IMF team and Barbados had reached staff level agreement on the completion of the first review under the IMF-funded programme. That agreement is subject to approval by the IMF executive Board when it is reviewed in June.
Once approved, Barbados is to get $98 million (US$49 million) from the near $600 million (US$290 million) Extended Fund Facility.
Pointing to the more than doubling of foreign exchange reserves, the quick restructuring of the domestic debt, the start to the reform of state-owned enterprises (SOEs), and changes to the Central Bank’s net domestic assets, Van Selm said “all programme targets for end of March under the EFF have been met”.
Van Selm said: “The targets for the primary surplus, central government grants to SOEs, central government domestic arrears, and social spending were also met.
“In March, Parliament adopted a budget financial year 2019/20 targeting a primary surplus of six per cent of Gross Domestic Product.”
Giving the stamp of approval for the 2019/2020 budget measures, Van Selm said broadening the tax base of the Value Added Tax (VAT) and land tax would help support Government revenue.
“The budget approved for the financial year 2019/20 provides a solid basis for the targeted fiscal consolidation [and] the authorities stand ready to take additional measures if necessary to reach the targeted six percent primary surplus,” he said.
The IMF official also pointed out that full year effects of the reforms set in motion during the last financial year, including the introduction of several new taxes, should help achieve the surplus target.
“The Barbadian authorities continue to make good progress in implementing structural benchmarks under the EFF,” he said, while singling out the regulatory sandbox and upgraded Planning and Development Act, the Public Financial Management Act and the implementation of a system for monitoring SOE arrears on an ongoing basis.
But with Government still locked in negotiations with external creditors, Van Selm said “progress being made by the authorities in furthering good-faith discussions with external creditors is welcome”.
He also urged authorities to continue having open dialogue and the sharing of information, saying this will remain important in concluding “an orderly debt restructuring process”.
Mottley said while she was grateful for the good news, she was not about to engage in jubilation just yet since Barbados “has a few more road signs to pass”.
Thanking civil servants, union and private sector officials who have been instrumental in the recovery and transformation efforts so far, Mottley added that “as long as the people of Barbados stay the course, I assure you that we shall be successful in being able to overcome what really was a turbulent and difficult legacy after a lost decade”.
“I will be jubilant when I see Barbados having to import labour. I will be jubilant when I see all forms of international business and all forms of buildings having been completed – the transformation of Carlisle Bay, Speightstown and Oistins,” Mottley added.
The Prime Minister revealed there would be some new measures, including a “new deal for public servants in housing in this country”.
She added: “I will be jubilant when we restructure the unjust Common Entrance [Exam]; I will be jubilant when we finish restructuring the Queen Elizabeth Hospital, the Geriatric Hospital and all of those other things,” Mottley said.
“In other words, I will be jubilant when Barbados has truly reached the first signs of transformation.”
Adding that measures announced in the budget needed “time to come out”, the Prime Minister also pointed out that there was still “some cleaning up” to be done in some state-owned entities, but promised this time it would be nothing close to the over 1,000 workers sent home last year.
Mottley said: “I think Transport Board is still in engagement with the unions on cleaning up how it is going about and there are a few others that will come about… as a result of changing how we do things through getting rid of things and systems that are redundant,” said Mottley.
Still on the cards, too, was a new Central Bank Act, a new Customs Act and a Data Privacy Act, she said.
Stating that she did not expect perfection, Mottley acknowledged that there would be some mistakes along the way. But she said “we can be great” because of a determination to pursue excellence.
The Prime Minister expressed regret at being unable to have more people to do the task ahead, but said one danger the country faced was people becoming complacent.