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by Dr. Derek Alleyne
A recent article by Ezra Alleyne suggested that in addition to [Tom] Adams, [Errol] Barrow and [Owen] Arthur, [Mia] Mottley appeared to have been able to master the financial minefield.
The lawyer turned editorialist went on to quote one of Mottley’s many financial advisers Professor Avinash Persaud as informing the Financial Times in London that Mottley’s administration’s inclusion of debt service relief clauses was an important technique for poorer countries”.
Although limited in economic know-how, I am aware that this is a response to the cash flow challenges that now confront Mottley’s administration.
Of course COVID-19 will serve as the backdrop on which concessions will be requested.
There can be no doubt, even against a backdrop of excessive borrowing that the debtservice coverage ratio of Barbados has reached unprecedented levels and Mottley and her team are searching for relief.
Debt-service coverage ratio in the context of government finance is the amount of export earnings needed by a country to meet annual interest and principal payments on its external debt. The emphasis here is on export earnings from the productive sectors as against foreign borrowing to shore up the reserves from which external foreign borrowing obligations can be met.
I have heard former Minister in the Owen Arthur administration, Anthony Wood, accused Mottley of engaging in reckless spending especially at the onset of the pandemic in March 2020 when the economy lost $2 billion in output and the main foreign earning sector tourism had virtually grinded to a halt.
Thus, there can no doubt the chickens are coming home to roost. Back in 2019 Mottley engaged in what can only be described as a Hood Robin exercise as she defaulted and repudiated on both local and foreign debt to the tune of $5 billion in what was to be a simple restructuring of the debt particularly the domestic component.
As Barbados’ capacity to borrow slides down the comfort scale no fancy talk about reserves will transform an economy that has gone to sleep.
All through this COVID-19 experience calls have been made to the Government to detail an economic recovery plan, not a fiscal support initiative but a plan that engages the attention, skills, resources and market know-how of the stakeholders.
Barbadians are very much aware of the millions spent on economic advisers but are now rightly questioning the benefits accruing from the investment.
As the propagandists search for new clothes to adorn the Empress, agriculture after the ash and hurricane is calling for special attention.
Stakeholders in the offshore sector have long resigned themselves to the belief that for this government it has outlived its usefulness. In manufacturing not even the green sector where talk has been plenty, nothing of significance has been on show.
While the flag ship tourism continues to be saddled by a Minister, who remains caught up in her own self-importance while staying aloof and distant from the challenges of a COVID-19- stricken product.
So where is the leadership in Barbados’ hour of need? She is on a surf toy smiling for the cameras while her minions and apologists search for positive news in a sea of despair and growing hopelessness.
Barbados has had challenges before and out of a major one emerged the social partnership.
Even with all its deficiencies, the social partnership has served as a point of consultation and problem-solving mechanism. Yet the institution has been made irrelevant by the tactics of Mottley to call meetings only to give dictates to the partnership. We are in deep, deep, deep trouble and the empress is partying in the midst of COVID-19 restrictions!
Dr. Derek Alleyne is a trade unionist, social commentator and member of the Democratic Labour Party.