The committee set up to monitor progress under the International Monetary Fund-backed Barbados Economic Recovery and Transformation (BERT) programme, is warning that Government is not yet out of the woods.
Co-chair of the BERT Monitoring Committee Edward Clarke said while progress has been made in achieving the fiscal and monetary targets, Government should urgently implement a number of transformational measures to realise greater efficiency in the public sector and meet future targets under the programme.
“The committee believes that very good progress has been made on economic reforms in Barbados. There are, however, some key reforms that remain to be consolidated to accomplish the goals of the programme in the future,” Clarke warned during a media conference at Sagicor’s conference room in Wildey on Monday.
Pointing to Government’s ambitious six per cent surplus target, Clarke said it was “central to the success” of the BERT programme, adding that it was a “must do”.
“There is no wavering on these. We must achieve this target,” he said, while acknowledging that recent revenue-raising measures require more time to yield results.
He said critical to the process now were the proclamation of key pieces of legislation and the implementation of strategies for improving the doing business environment especially as it relates to the Corporate Affairs and Intellectual Property Office.
Clarke said the committee was also concerned about the levels of expenditure on transfers to state entities.
“There has been an increase in the late part of the last fiscal year and we believe that given the size of this expenditure item and its impact on the primary balance target, this needs to be monitored closely and controlled very well in the next fiscal year,” he cautioned.
However, the committee wants to see full and urgent implementation of the Retooling, Empowering, Retraining and Enfranchisement (RERE) programme.
Clarke said full implementation of this programme was necessary for retrenched workers as well as existing civil servants if they were to function efficiently.
Adding that he was aware of some measures being put in place to improve the Customs Department, Clarke said there was still a need for the administrative processes to be more efficient.
“We believe that those items, if implemented and if implemented efficiently, will bring about significant change in the way we do business in Barbados, it will show a way forward in growing this economy and ensure the Government can continue to meet its performance criteria and benchmarks under the EFF BERT programme IMF agreement,” Clarke said.
Of note, was that the monitoring committee also raised questions about Government’s method of measuring the country’s gross domestic product (GDP).
“We believe that some attention should be directed to this area as it is counterintuitive. That with no increase in the VAT [Value Added Tax] rates in Barbados in 2018, VAT collections will be up by six per cent compared to 2017, while the real growth is reported to be slightly down in 2018,” said Clarke.
“So something doesn’t seem to align there. This may be due to the fact that there are other areas of the economy, new areas of the economy, that may not have been captured officially in the Government’s or Central Bank’s data. We are still in discussions about this but it is something that needs to be addressed,” he said, while pointing out that the IMF was providing technical assistance to the Barbados Statistical Department to improve the island’s data collection.
Private sector committee member Donna Wellington said with government now in phase three of the BERT programme, the focus should be on achieving efficiency across the public sector.
“Another important thing is that the external debt restructuring is critical because we need to be on a downward trajectory in terms of debt to GDP and once that is concluded, whatever the savings would be in that regard, would also be crystalized and that is critical,” Wellington insisted.
The committee opted not to comment on Government’s expenditure in relation to payments to White Oak for its help in the restructuring process, but said “We hope that we would continue to see proper management of the expenditure in Barbados and I think we have started to do that and I hope that continues.”
Trade union committee representative Akanni McDowall said the labour movement was closely monitoring the transformation process of state-owned enterprises, adding that there were concerns about the slow implementation of the RERE programme.
“For us, that is a significant part of the transformation process. Some of these workers . . . would have been retrenched some time last year and there is a six-month process where they achieve benefits. That six months timeline has now ended so there is now a lull between those workers being re-engaged and having some kind of additional income so that they can support themselves and families.