The committee established to monitor the Government’s performance under the Barbados Economic Recovery and Transformation (BERT) programme said today all of this year’s fiscal targets have been met up to September.
But officials of the BERT Monitoring Committee are expressing serious concerns about some aspects of spending by the Mia Mottley administration and its smaller state-owned enterprises (SOEs).
Outlining the results of the committee’s fourth public report in a news conference at the Wildey offices of Sagicor Insurance in St Michael this morning, Co-Chair Edward Clarke first addressed the issue of the targets.
Clarke revealed that the Government’s target of a six per cent primary surplus for the fiscal year that ends next March was well ahead of that goal.
Figures shared with reporters show that Central Government had reached a primary balance of $418 million, way more than the target of $281 million.
“The Government of Barbados has made a solid start on its requirement of increasing the primary balance to a surplus of six per cent of GDP in 2019/2020, with actual results for the first six months of the fiscal year exceeding the interim target by a wide margin mainly as a result of expenditure control,” Clarke said.
The report does not reflect any external debt arrears by the Government and Clarke explained the reason for this.
He said: “The debt arrears… the external debt. When this [the report] was done at September 30, there was no settlement of the external debt situation, so these are not being accounted for in the September 30 monitoring report.
Turning to the 33 SOEs being monitored, the committee co-chair declared satisfaction with transfers and grants to the agencies.
“The transfers and grants to the public institutions. There are a limited number of public institutions being monitored.
“I think there are 33 public institutions that are being monitored; and these are well within the limits set by the BERT programme.”
He also announced that the $12.6 billion target that Government had said it would not exceed on public debt was met. The statistics show the debt only reached $12.4 billion.
Other benchmarks reached include the proclamation by the Governor General of the Financial Management and Audit Act – the Government’s new accounting and spending law – and the Government’s comprehensive review of all tariffs and fees charged by state-owned enterprises.
Turning to the monetary aspects of the targets, Clarke reported other goals were achieved.
“On the monetary side…the net domestic assets of the Central Bank, there are limits in the [BERT] programme.
“So the Government had $1.893 billion versus a target of just over two billion. So they are within those targets.
“And on the international reserves, I am happy to say that we are… based on the September report, the Government is at $971 million versus a target of $900 million expected at September 30, 2019. That is on the net international reserves,” Clarke said.
He said, too, that the restriction on Central Government domestic arrears was not broken either. Clarke noted that all parties in the BERT programme agreed that such arrears should not exceed $265 million. He disclosed that the Administration only accumulated $180 million.
He said the target on social services was also met, even though spending went over by one million dollars.
The administration, Clarke reported, also kept substantially within the limit set for chalking up arrears for SOEs.
But while he said the reaching of these fiscal and monetary targets is plausible and must continue, the Committee is seriously concerned that Government was not spending enough money on capital projects so that these could stimulate much-needed economic activity.
“One of the concerns that the Committee has is the low level of capital expenditure in Barbados on the Government side.
“The Government had a target of capital spending of around $87 million at September; and they spend about $36 million at September.
“There is quite a gap between what was spent and what was budgeted.
“Capital expenditure in the right direction will stimulate the economy.
“It will stimulate employment. So we need to see the Government improve in this expenditure in applying the resources in the right areas.”
To ground his argument, he cited a series of “serious infrastructural problems across Barbados” stemming from challenges in sanitation, water, roads and transportation.
He declared: “On the other hand, unemployment as we know, especially at this time of the year, is a very worrying item.
“And we know there is a slight increase in unemployment stats… and we are hoping that as the season progresses for tourists, we would see some lowering of that… that general employment will improve with new projects coming on stream.”
And while the committee said it is worried about too little capital spending by Central Government, officials are equally concerned that some SOEs are spending way more than the limit requires them to do.
Greg McConnie, a director of then Barbados International Business Association (BIBA) and a member of the BERT Monitoring Committee, revealed that a number of smaller, unnamed state entities spent $40 million more than had been targeted by Government.
He said: “When you look at the BERT-monitored SOEs, they were $26 million ‘peeled over’ the target for their expenditure.
“But when you look at SOEs in total, they were $17 million over the Government’s internal target for spending for SOEs transfers.
“So that implies there is in excess of $40 million spent by the smaller SOEs over and above what the Government has originally targeted.”
McConnie said the committee has asked for details on where those excesses have been spent and is awaiting a response from Government.
He said the concern becomes even greater when one considers the large amount of over spending by smaller state enterprises which are not being monitored by the BERT Committee.
But when pressed to say which enterprises are guilty of this level of excesses Clarke intervened to inform reporters that the committee did not know at the moment.
“These are a lot of the smaller agencies, but we awaiting information on which ones are over,” said Clarke.