Minister in the Ministry of Finance Ryan Straughn is giving the assurance that Government’s decision to halt debt reduction efforts over the next two years is not an indication that it is straying from the Barbados Economic Recovery and Transformation (BERT) programme.
Additionally, Straughn has defended Government’s decision to provide $300 million in financing for the tourism and hospitality sector under the new Barbados Employment and Sustainable Transformation (BEST) programme.
The funding will be taken from the international reserves, which reached some $1.6 billion at the end of June.
Addressing the opening of the Institute of Chartered Accountants of Barbados (ICAB) Public Sector Conference 2020 on Friday, Straughn said the debt reduction was critical as Government seeks to put funding in several areas to help resuscitate the economy.
The conference was held under the theme, Re-engineering Public Sector Management.
“The Governor General announced what was a suspension of debt reduction. I just want to make it clear . . . that this is not a departure from the fundamental tenants of the Barbados Economic Recovery and Transformation programme,” said Straughn.
He said the best-case scenario was that Government would lose about $450 million in revenue for this financial year, but it was faced with a situation of coming up with additional financing to help individuals and businesses.
The economist explained that the suspension on debt reduction meant that Government would be in a position to source additional financing to meet the growing demands created by the COVID-19 pandemic.
“That suspension in debt reduction means that the financing that we now have to procure through our multilateral partners, which we have already started the process, meant that we have borrowed money this year that we did not intend to borrow,” said Straughn.
“Therefore, the change in mission temporarily is designed to ensure that over the long-term that the Barbados economy will still be in a position to maintain our objectives under the BERT programme,” he said, adding that the intention was also to run a balanced budget this year.
He said Government was keen on providing assistance to households and businesses, especially in an environment where the country was still exposed to the impacts from the dreaded COVID-19 pandemic, which has already put a major dent in the tourism sector.
Defending the BEST programme, Straughn said the choice was either to spend money to extend unemployment benefits and to ultimately support severance claims, which would be in the hundreds of millions, and trigger a rush of bankruptcy and insolvency matters.
“Therefore, the Barbados Employment and Sustainable Transformation programme was designed specifically to respond in a very strategic way to ensuring that we re-engineer the way the Government engages with the private sector in order to ensure that over the course of the next two years that we can keep as many businesses,” said Straughn.
He said once a certain level of tourism activity returned, it would create a ripple effect across the rest of the private sector.
emmanueljoseph@barbadostoday.bb
