Mottley’s vision for BERT as current IMF arrangement nears end

Barbados may keep the International Monetary Fund “on speed dial” beyond June when the second version of the national economic recovery programme concludes, Prime Minister Mia Mottley announced on Thursday.

While no final decision has been made on the IMF-backed Barbados Economic Recovery and Transformation (BERT) 3.0 programme, Mottley told journalists at Ilaro Court that the structural reforms must continue, and the IMF which will formally end its arrangement with Barbados under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) next month, will be on call in case emergency support is needed beyond June.

“We have to continue to make Barbados fit for the third decade of the 21st century and beyond, we have to become more nimble; we have to become less ponderous, we have to become more cooperative, we have to build skills,” the prime minister said at a news conference.

She said the need for more Barbadians to be skilled was felt during the discussions on national insurance and pension reform.

“We feel it,” the prime minister added, “when we have to import persons to help us out. We have had to have a number of persons working from outside, inside of Barbados, not because we wanted it — a first option is always a Bajan — but the reality is if you can’t get a person for the job, then what do you have to do? You have to go where the skills can be had. So skills development is a huge part of it.”

Mottley also said a BERT 3.0 must entail continued modernisation of the country’s governance structure.

She pointed out that training must also be key. Cabinet members have already undergone training, and permanent secretaries, deputy permanent secretaries, senior administrative officers, chief technical officers, and officers of related grade will be exposed to the same training later this month and thereafter, she said.

Mottley also disclosed that as a result of comments made by the Auditor General in his annual reports, the accounting and financial systems will be revised.

“So, when we talk about institutional strengthening just because the IMF programme is over, it doesn’t mean the whole distance has been run in terms of where we want to go; not where anybody wants us to go, [but] where we want to go in terms of strengthening our capacity as a nation, and to be far nimbler,” the PM said.

Mottley said that in order to survive, Barbados will also have to work in solidarity with more international agencies to help strengthen capacity because the rules of engagement were not balanced and fair.

“In addition to that, we have determined that there are new areas of economic activity that have to come to be relied upon,” she said. “The heritage economy is a huge one; that, like the Geriatric Hospital, we have been doing to get off the ground, by saving little by little, by little over the seven years; and over the course of the next few months, I expect us to see the opening of the monument, and the opening of a theatre at Newton, that would help build out the heritage economy up there.”

“We have to also see where the international situation goes with corporation taxes, and what we can continue to do to be able to survive with respect to those issues there.”

Mottley said renewable energy continues to be a major objective of her government, adding that her administration felt it should not have interfered with the actions of the regulatory agencies unless it is “absolutely” necessary for the government to pass new legislation.

But, she added: “What it has meant that we have had half a billion dollars, $500 million locked up in the banking sector waiting to be released, because you can’t do more renewable energy without grids stability; and for grids stability…because solar is intermittent energy, wind is intermittent energy, you need battery storage in order to flatten it out to guarantee that you will get access to electricity when you need it.”

Mottley went further to anchor a case for possible future IMF support, contending that while this country’s economy has done well, having met all of the IMF fiscal targets during the past year, moderated inflation, shown robust growth and record reserves of seven months, the island is still susceptible to global shocks.

“It is seriously overcast. And when things are overcast…outside is overcast…and you leave home without an umbrella or a raincoat, or if you know you are likely to have heavy rains, some boots to help you, you are acting foolhardy. And similarly, as we bring this process to an end, we have determined that we will keep our relationship open with the Fund. We will discuss with the Social Partnership what that relationship should be.”

She added: “It is at this stage likely to be what I called speed dial standby. What they [IMF] called precautionary standby, which simply means, that if at some point in the next three months, or six months or nine months, the overcast conditions changed into showers or floods or high winds, that instead of having to go through a lengthy process to get help, you literally press speed dial, one button, and everything is there.”

The IMF-backed home-grown BERT started in June 2018 with the primary aim of restoring macroeconomic stability and placing the economy on a path of strong, sustainable, and inclusive growth. 

emmanueljoseph@barbadostoday.bb