Former Minister of Economic Affairs Dr David Estwick has hit back at Government Minister Ryan Straughn for questioning the Democratic Labour Party’s (DLP) moral authority to criticise the current administration’s management of the country’s debt.
Estwick contends that the Minister of State in the Prime Minister’s Office with responsibility for Finance is off target regarding the debt the Barbados Labour Party (BLP) inherited and where the country’s debt situation is now.
Earlier this month, Straughn told the House of Assembly that the DLP could not come to the country with any credibility, neither could any representative of the party “masquerading as an economist…with smoke and mirrors”, on matters related to the management of public debt.
He contended that the BLP inherited $18 billion in debt when it took over the government in 2018 and had restructured that debt – which represented 176 per cent of the Gross Domestic Product (GDP) – just before the start of the COVID-19 pandemic in March 2020, reducing it to about 119 per cent of GDP or $12.5 billion.
Straughn at the time was responding to comments made at a DLP St Thomas branch meeting by Estwick who predicted that the country’s debt service and debt stock would continue to rise “dangerously” and could become an “albatross” around taxpayers’ necks.
But at a DLP St Michael South East branch panel discussion on Sunday at the Parkinson Memorial Secondary School, Estwick dismissed Straughn’s figures, drawing from what he said was data from the reports of the International Monetary Fund Article IV Consultations, the Central Bank of Barbados, and Standard & Poors, as well as from Estimates of Revenue and Expenditure documents and the Barbados Economic and Social Reports.
He claimed the total public debt when the BLP took over was approximately 157 per cent of GDP and not 176 per cent; and total debt stock was about $16 billion at the end of financial year 2018 and not over $18 billion.
Estwick, who also headed the Infrastructure Committee of Cabinet under then Prime Minister Freundel Stuart, also contended that the debt which the Government found in 2018 could be traced back to previous BLP administrations.
“What he [Straughn] apparently forgot was that the history of the buildup of debt in the Barbados economy did not start in the 2008-2018 period [when the DLP was in office] and that there was a period before that, that seriously affected and shaped the economic metrics he spoke about in 2018 when they went into office,” the ex-Cabinet Minister said, noting that when the DLP took office in January 2008, the economy was already unstable with a “very high” and “unsustainable” central government deficit and debt, a “huge” central government debt service, a high foreign debt, a “very high” external current account deficit, high inflation, high unemployment, borrowed net international reserves, and a sovereign international credit rating of BBB-.
The former Minister of Economic Affairs explained that this meant debt repayment by Barbados was speculative – uncertain or carrying a high risk.
“So, between 2008 and 2018, the DLP borrowed to keep the economy afloat and protect the people of this country. Our borrowing was mostly domestic in nature and, on leaving office, the central government debt was 70 per cent domestic debt and 30 per cent external,” Dr Estwick argued.
He contended that since the BLP came to office, “every debt metric has worsened”.
“But Barbadians are being told that the debt situation is not worsening, everything is under control and we are on target,” the former MP for St Philip West declared. (EJ)
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