The opposition People’s Party for Democracy and Development (PdP) has warned Barbadians to “gird up loins and tighten belts” as the economy enters a “season of untold calamity.”
Bruce Hennis, a member of the party’s team on the economy, sounded this warning as he spelt out the implications of the latest figures revealed in three recent economic reviews.
Hennis drew on the Central Bank Governor’s review of the first three months of 2020, along with current trends in the United States and the United Kingdom, which have seen a sharp decline in their economic fortunes as a result of the COVID-19 pandemic.
He said the situation in the US and the UK, the two major sources of visitor arrivals, should be a cause for concern among Barbadians.
He said: “As of April 2020. the US has a 14.4 per cent unemployment rate; that is over 23 million people are not working at present. That level of unemployment has not been seen since August 1931 to June 1940 during the Great Depression.
“The Bank of England has said the UK’s economy could fall by 14 per cent this year, the largest since 1706, and unemployment may rise to as much as nine per cent higher than in the great recession of 2008.”
Barbados is still too heavily dependent on tourism, Hennis contended, as he cited the state of the industry over the last two years.
He said: “For the first quarter of 2020, the economy has declined by three per cent, and tourism has fallen by just over 16 per cent. We have seen an 18 per cent decline in long-stay arrivals and a 12 per cent drop in cruise tourism arrivals, and this was before any adverse impact from COVID-19. 2018 ended with -0.4 per cent decline in our economy; 2019 ended with a decline of -0.1 per cent, and the first three months of 2020 have continued this trend, with a three per cent decline, an amount that makes the overall 2018 and 2019 figures pale by comparison.
“The tourism fallout has also affected our foreign exchange earnings. In the first three months of 2020, our earnings from travel were close to $800 million, which looks good, but this was a decline of 11 per cent over 2019; this will get worse, and this is especially serious because over the last two years half of the foreign exchange earned has come from tourism.
“Barbados is still relying too heavily on tourism – 70 per cent of the tradeable component of our economy; that is, the goods and services we trade internationally, is made up of tourism-related businesses. Seventeen per cent or close to one-fifth of the overall economy depends strongly on tourism; therefore, as we have just seen, any decline in tourism will impact us all.”
The opposition spokesman also slammed the Barbados Economic Recovery and Transformation (BERT) programme, calling it the country’s worst-ever agreement with the International Monetary Fund (IMF), following two arrangements made in the early 1980s and again in 1991.
Hennis declared: “The IMF programme we are currently in is the worst in our history with the IMF. The money we signed up for is now five times more money than the last two programmes combined, and the duration of this one is longer than the last two combined.
“Our debt per capita is now the highest in the world for all the 39 countries in IMF programmes at present.
Our most recent update, when we got an extra $39 million, means that every Barbadian carries a $2,600 debt. Argentina, the second-highest, is $2,500 per person, Argentina is in a dire economic situation and we have now surpassed them.”
