The man who once advised the Government on monetary policy and regulated the banking industry, has given the Mia Mottley administration’s new Barbados Optional Savings Scheme (BOSS) the thumbs down.
Former Governor of the Central Bank of Barbados Dr Delisle Worrell has suggested that the BOSS plan has missed the mark which should have been targeted at reforming the public service to meet the needs of the country.
Dr Worrell, who presided over the financial regulating authority from November 2009 until February 2017, has said the scheme does not address the need for a makeover of the public service and that the COVID-19 pandemic emphasized the necessity for a smaller and more efficient service.
The BOSS proposal, which gives public sector workers the option to be paid a portion of their salary in four-year bonds at a five per cent interest rate, is designed to facilitate the Government’s objective of creating much needed fiscal space, given the projected decline in revenues occasioned by the pandemic.
“Unfortunately our present Government, like its predecessor, has not addressed the need for a makeover of the public service, to ensure that our limited tax revenues are efficiently utilized to deliver the educational, health, security, judicial, social and administrative services and public utilities that the country needs,” the former Central Bank Governor told Barbados TODAY.
Dr Worrell, who is currently an international economic consultant, is maintaining that the centerpiece of his seven-point recommendation for restoring prosperity to the economy, published in November 2017 and recommending a public sector reform package to be implemented over three years was the medicine the economy needed.
The former International Monetary Fund (IMF) Specialist in monetary policy, financial stability and stress testing in Europe, Africa, Asia and the Caribbean, said that his package was aimed at eliminating Government’s operating deficit and achieving measurable improvements in public sector productivity.
“I recommended that the programme of assistance to be negotiated with the IMF should have been conditional on the implementation of this fiscal reform,” he explained.
He noted that it has taken the emergence of the coronavirus three years later to confirm the correctness of his recommendation for downsizing the Government service.
“The COVID-19 crisis emphasizes the need for a much smaller public service that is appropriately skilled for the needs of the 21 century and is led by capable, highly regarded professionals,” he added.
In his 2017 paper The Barbados Economy – the Road to Prosperity, Dr Worrell said that with the implementation of spending cuts and measures to improve public sector efficiency, GDP growth would reach three per cent in five years.
“Foreign reserves would exceed $2,000 million, including borrowings from international financial institutions. The burden of interest payments on Government debt would be substantially reduced. Government would have a small surplus on the current account, and the overall fiscal position would be sustainable,” Dr Worrell reiterated.
“What ails the Barbados economy has been an open secret for many years. It is a public sector that our taxes cannot support, and one that does not deliver administrative services efficiently,” the former Central Bank Governor has underlined.
Meanwhile Prime Minister Mottley said yesterday that the BOSS has received tremendous support from public servants.
In a separate interview President of the Barbados Secondary Teachers’ Union (BSTU) Mary Redman told Barbados TODAY on Tuesday that 92 per cent of its members who attended a virtual meeting with Government’s chief economic advisor Dr. Kevin Greenidge on Monday voted in favour of the arrangement.
President of the National Union of Public Workers (NUPW) Akanni McDowal has said some of its members are backing the proposal and the umbrella body for credit unions – the Barbados Cooperative Credit Union League (BCCUL) – has declared its support for the BOSS plan.
The People’s Party for Democracy and Development (PdP) led by Opposition Leader Bishop Joseph Atherley has described the arrangement as a farce, while the Democratic Labour Party (DLP) labelled it as a pay cut disguised as a cute phrase.