The push for Barbadians to buy in to the concept of digital currency has gotten the stamp of approval from one of the region’s leading economic minds, who has hailed it as a major facilitator of growth and business.
Speaking at the third annual Central Bank meets Blockchain conference, held at the Hilton Hotel this morning, Director of Economics at the Caribbean Development Bank Dr Justin Ram noted that based on the rate of growth, the Caribbean is on target to be one of the poorest regions in the world by 2050.
He contended that the development of an established digital currency framework, could play a major role in reversing this, as it ticks several of the boxes required for a critical reform of the financial engines that facilitate business.
“It is important for us to continuously reform so that we can have improved growth rates because we need to do this if we are to avoid the track that we are currently on, which is being the poorest region of the world by 2050. In 2018 our countries have grown on average of about two per cent and this growth rate is not good enough if we want to take our people out of poverty,” he said.
Ram noted that Barbados and the region continue to bring up the rear when it comes to ease of doing business, stressing that this does not augur well for the sustainability of the region and it was therefore pivotal that government reforms this area.
“Insisting that our governments reform and that we have the right doing business environment and high growth rate is going to be critical
for us in the medium to short term. We have been declining with respect to our doing business. In 2009, we ranked 81 out of 191 countries and now ten years later we rank 126 out of 191 countries. This is not good enough because there are some places in conflict that have a higher doing business indicator than some of our Caribbean countries,” the respected economist pointed out.
Referencing trade between Barbados and its closes neighbour, St Vincent and the Grenadines, Ram pointed out that Vincentian importers send between US$8 – 12 million annually to Barbados while Barbadian importers send about US$ 6 million to St Vincent and the Grenadines on an annual basis. These payments are all routed through extra-regional correspondent banks, which means that a significant portion is lost in fees.
“If you think about it now, all of these transactions are going through the US banking systems and of course two per cent is taken off if you are using credit cards, so there is a lot of transaction cost there and it doesn’t need to be . What we are saying is let’s wake up. Why are we giving away money when we don’t need to be,” he stressed.
He further noted that apart from the cost-saving component, the digital payment system would significantly boost efficiency, as VAT payments and transaction data are automatically paid to the respective revenue authorities. Additionally, merchants immediately receive payment in their digital account, while data records about the transaction are automatically submitted to the merchant’s bank, customers’ banks, Central Bank, and other regulators.