Government’s recent passing grade for fiscal targets in the first eight months of a four-year International Monetary Fund programme has failed to impress Opposition lawmakers.
Senator Crystal Drakes, an economist, said that the Mia Mottley administration may have hit the benchmarks set under the IMF-sanctioned Barbados Economic Recovery and Transformation programme but is ignoring it’s sustained and impending collateral damage to the society.
“All of this has come at a social cost. Meeting those targets have been economic winds but socially we have paid a serious price for meeting those targets.
“In reducing our debt and closing the fiscal gap, Barbadians had to give up their wealth, particularly the vulnerable group of pensioners.
“Their disposable income through higher taxes and user fees, has resulted in persons falling below the poverty line.”
Drake’s remarks came during a press conference convened this morning at the Opposition wing of the Parliament Buildings.
She noted that the recent 75 per cent increase in bus fares, together with the Garbage and Sewage Contribution (GSC) tax and the layoffs within the public sector, were sudden measures that have become anvils around the necks of average Barbadians.
“These are things that we have to pay close attention to while we talk about meeting our economic indicators and targets.
“What we could say is that we have these small pockets of poverty cropping up around Barbados in the next four years under this IMF programme,” she said.
Praising the country’s economic progress under the BERT programme, the latest IMF mission reported: “Barbados continues to make strong progress in implementing its ambitious and comprehensive economic reform programme. International reserves, which reached a low of US$220 million (5–6 weeks of import coverage) at end-May 2018, have more than doubled since then.
“The rapid completion of the domestic part of a debt restructuring has been very helpful in reducing economic uncertainty, and the new terms agreed with creditors have put debt on a clear downward trajectory.”
But Opposition Senator Drakes warned that the social pain is going to be intensified in the coming months and urged Barbadians to prepare themselves as best as they can.
She told the media: “What is not being discussed is the primary balance that we have to reach. The last financial year we had to reach a primary balance of three per cent. In the next financial year, we have to double that.
“I think that this is an important message for Barbadians because what we experienced in the last couple of months was only the first step.
“What is coming in the next couple of months is going to be extended and more intensified in terms of the social impact that Barbadians will feel in relation to Government trying to close the debt and reduce the fiscal imbalance that we have.”
The economist-lawmaker said that the plan to move from a $350 million primary surplus to a target of $650 million “is a very large gap in a very small mount of time in terms of a financial year”.
Senator Drakes was also critical of a lack of information from Government updating on its debt negotiation with external creditors, noting that should this matter end in litigation, the consequences would be dire for Barbados’ credit worthiness.
She told journalists: “There are studies that have shown that 50 per cent of cases in debt negotiations around the world have ended in litigation. So, this is a very plausible scenario going forward for Barbados.
“Barbadians need to know what are Government’s plans if we do go to litigation and how are we safeguarding the gains that we have made in that context because it has a direct impact on how we move forward as a country.”
Senator Drakes said external factors such as natural disaster and global economic issues could easily derail the country’s fragile economc gains.