Opposition team meets with IMF

Following his first official meeting with the International Monetary Fund (IMF) since the start of the Barbados Economic Recovery and Transformation (BERT) programme, Opposition Leader Bishop Joseph Atherley believes that the Mia Mottley-led administration needs a clear strategy for building resilience, economic growth, and for managing its debt.

Atherley told Barbados TODAY that after discussions on Thursday with the IMF around a range of economic and fiscal matters pertaining to Government and its performance under the BERT programme, he was concerned that there was still a long way to go for the country to achieve certain objectives.

“We were concerned about the IMF’s view of the Barbados economy going forward beyond COVID if there is not a clearly outlined growth path,” said Atherley, as he called for “a clear fiscal policy”.

“We cannot simply have a fiscal austerity programme or fiscally-tight programme in place without making sure that the country is able to provide the kind of social and welfare assistance that the people need to have. You can’t achieve that level or quality of life if you continue to run up a high debt stock and then you do not have the concomitant, strong, strategic platform for growth,” the leader of the People’s Party for Democracy and Development (PdP) explained.

The meeting with the IMF comes just over a month after Atherley expressed concern at the end of September that he had not been invited to any prior meetings involving the IMF, despite several of them taking place since the commencement of the four-year, IMF-backed BERT programme in October 2018.

He said a range of issues were discussed with the IMF including the various targets under the programme, the island’s debt profile, government’s revenue, expenditure and transfers to state-owned enterprises, the profile of the public sector, climate change matters, the ease of doing business and digitalisation of the Barbados economy.

Zeroing in on the debt, Atherley said “We cannot persist in building up our debt levels, not withstanding COVID, without at the same time trying to reorient this economy such that we have a clear and strategic platform and plan for growth.

“How are we going to manage debt services, how are we going to manage debt payments and interest payments going forward, if the economy continues to be constrained, operating under the singular cylinder of tourism? We need to diversify,” said Atherley.

He said he believed there were tremendous opportunities for diversification in the areas of renewable energy, sports, art and culture.

According to him, there was need for incentives that would encourage greater domestic investment. He noted that government should “facilitate” the movement of funds in the bank to encourage this investment.

“By domestic investment we don’t simply mean investment from investors at home or nationally identified. We are talking about widening that pool of players and democratising the whole investment thrust so that it is not the same few players and same few familiar names whose hands are in the projects,” said Atherley.

He also questioned why government needed more than 3.5 times the benchmark in foreign reserves. “It is not a question of having the reserves there but how are you using those reserves, and to the extent that the reserves allow you to finance certain activities on the ground without the fear that it will lead to a drain on those foreign reserves.”

He said: “Much of what we do going forward will require a cultural shift in the way we do things. So we’ve got to see debt differently, we’ve got to see the whole business of foreign reserves differently and we have got to see the whole business of deficit financing differently and that is where we are coming from.”

Atherley said he was also of the view that the building out of “climate resistance capacity” will be critical going forward to mitigate disaster impacts, while ensuring that there are initiatives that would make the financing, when it comes, worthwhile and well spent.

Calling for a clear policy on climate change mitigation, he suggested areas of agriculture, technology, housing and water and sewerage infrastructure be given priority in the building of resilience.

He said his understanding from Thursday’s meeting was that a reduction in transfers to state-owned enterprises was still a priority if Government was to reduce its expenditure.

He also noted that the digitalisation and adaption of technology should go beyond “making certain parts of Bridgetown tech-friendly” and making sure “the entire economy” is tech-friendly.

The PdP leader added that he and the IMF officials agreed that the slow pace of doing business in Barbados was still an area of concern.

The rest of the team attending the meeting with the Opposition Leader and the IMF were the PdP’s lead spokesperson on economics, finance and climate change Senator Krystal Drakes; financial analyst and business consultant Bruce Hennis; University of the West Indies economist Dr Clifton Charles; former central bank governor Dr DeLisle Worrell and Director of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) Dr Don Marshall.

Atheley said he hoped the exchange with the IMF would not be the last.
marlonmadden@barbadostoday.bb