Time to start generating revenue – DLP

Calling the Central Bank’s first quarter economic review a sobering read, the Democratic Labour Party (DLP) has warned that the country is facing an untenable economic situation.

DLP President Verla De Peiza is telling the Mia Mottley Administration it must now take steps to pull back the situation by generating revenue for the Treasury.

De Peiza was commenting on the report by Central Bank Governor Cleviston Haynes released on Thursday for the first three months of 2021.

The Governor’s report highlighted a near 20 per cent contraction of the economy, projected growth of about three per cent for the rest of this year, an unemployment of 13.6 per cent at the end of December 2020 and price increases of an average two per cent during the 12 months ending March 31, 2021.

Haynes also reported that with uncertainty continuing to cloud the outlook for 2021 whatever gains are projected would substantially hinge on the timing and pace at which tourism bounces back along with the Government’s ability to contain the spread of the COVID-19 disease.

But in a statement issued Thursday,

De Peiza argued that the lax in the quarantine protocols for November and December 2020 reversed the gains derived from the increase in tourist arrivals.

“The resulting surge in COVID-19 positive cases meant that we spent the money earned on COVID relief, both in healthcare and in disbursements to people and businesses. The country was in recession before COVID and for certain, we are now deeper in recession,” the DLP leader declared.

“Our external debt level has now outstripped that at any point in [Prime Minister Freundel] Stuart era. Borrowing increased during this quarter as well and unless policy initiatives are put in place shortly, the Government may be tempted to borrow more,” De Peiza added.

This, she insisted, should be resisted, “especially since the figures suggest that approximately half of what was borrowed last year was used to pay the debt”.

De Peiza said it is likely too that the revised benchmark with the International Monetary Fund (IMF) is in jeopardy, especially now that dampened revenues have “collided with” the resumption of interest payments to external debtors.

“There are also no signs now or on the horizon of the promised return of investor confidence, ” the party president said.

She again suggested that the micro, small, and medium-sized businesses are best placed to pull Barbados out of recession.

“They also can assist with addressing the runaway unemployment, the rate at which the Governor has again resisted recording in the report. Government must stop hiding information, even if it is unflattering. Transparency was promised and must be delivered,” De Peiza concluded. (PR/EJ)