DLP: Gov’t owes country escape plan from rising debt

Warning that time is running out, Democratic Labour Party (DLP) spokesman on business Ryan Walters is predicting that the Government may have to consider another restructuring programme if it continues to drive up the country’s debt.

He is also calling on the Mia Mottley administration to outline a clear and urgent plan of action for the “sustainable recovery” of the Barbados economy.

Walters said based on the latest Central Bank report, which showed increased spending, low revenues and high debt, the economy was still performing “dismally”.

“Yet, not a word of assurance from the three financial advisors or the three ministers in the Ministry of Finance on what is the plan going forward to put the country back on a stable economic trajectory,” he said.

Pointing out that the economy was on course to shrink this year, compared to last year, the businessman said this was despite last year having longer periods of lockdowns.

“Even if the Ministry of Tourism realizes the anticipated airlift later in the year, the numbers do not suggest any growth in our GDP by year-end. The report indicates the gross international reserves stand at 43 weeks, almost four times the benchmark. On the other hand, government debt stands at 150.3 per cent of GDP,” he added.

“Three years ago, the Government’s debt restructuring programme caused financial pain to many taxpayers, both directly via government financial instruments and indirectly via various institutions such as credit unions and the National Insurance Scheme. Today, the Government is back at square one with debt levels that exceed those dating back to 2017. At the current borrowing rate, the Government may very well have to revisit another debt restructuring programme in the near future.”

Walters told Barbados TODAY that the Mottley administration owed it to Barbadians to outline a clear plan of action to reposition the economy.

“This is clearly needed since it appears that nobody in or outside of Government, including our Central Bank, has any idea as to what the real strategy is to tackle the deep and devastating problems of declining  gross domestic product (GDP), high unemployment, depressed commercial activity, soaring debt and an escalating misery index,” he said.

“If such a plan is not produced and acted on with haste, the current economic environment will continue to cripple individuals, households and businesses across the country and could possibly lead to social degradation. Time is running out.”

He also questioned whether the Barbados Economic Recovery and Transformation (BERT) programme was achieving its intended purpose.

“In 2018, the BERT programme was launched and was touted as the saviour for our country’s economic challenges. BERT was aimed at restoring fiscal and debt sustainability, addressing falling reserves, and increasing growth. BERT was also to be a homegrown plan with the flexibility to tweak against unplanned current events. But can the government officials say that BERT is working today?” he asked.

Walters argued that enough time has elapsed and the dust is settling since the impact of the pandemic last year.

“The Ministry of Finance should be held to account to update the country on the progress of BERT but more importantly, to present an economic growth plan to take the country forward.

“The country has been told what has happened in the last month, quarter and year, but it is time to tell the country what the plan is for the future. Surely the economy cannot grow if it is on autopilot,” he said.
(marlonmadden@barbadostoday.bb