Business Monday: Take non-IMF route

DIRECTOR of Sir Arthur Lewis Institute for Social and Economic Studies (SALISES), Dr. Don Marshall, wants the government to take Barbados out of the present IMF four-year programme.

He said so while reiterating that this country should not have entered an agreement with the International Monetary Fund (IMF).

Dr. Marshall is among a number of academics who believed that IMF programmes are not ideal for small countries that have economic problems because of the harsh measures that come with them, and the pain these programmes inflict on people. He stated that his opposition to the IMF has always been his view from where he sits at the University of the West Indies.

Speaking at the DLP’s lunchtime lecture on Friday, Dr. Marshall said that having benefited from US$49 million in IMF financing to date, there is no need for the country to continue with the agreement. The current agreement calls for US$290 million in financing over the length of the programme. However, Barbados has to carry out a series of onerous measures which will be reviewed periodically.

In calling for Barbados to exit the Fund arrangement, Dr. Marshall maintained that there is no need for this country to go after the remaining funds in the agreement since the Barbados economy is not growing.

The SALISES official said that the IMF agreement has put the burden of the economic recovery on the backs of ordinary Barbadians. He said too that while the programme is a home-grown one, the country has gone for the same logic by the Fund and that its future is now tied up in Washington DC.

Furthermore, mixed signals are being sent to the IMF. Whereas under the previous administration there were plans to divest the Barbados National Terminal Company Limited and the Hilton, that proposal has been shelved temporarily.

In place of the IMF, Barbados should have approached China, the world’s second largest economy, for a concessionary financing agreement. The UWI official believed that in approaching China for assistance, Barbados will have to design a plan.

The SALISES Director told the gathering that Italy “has signed an agreement with China because it is facing austerity,” after having tried everything else including an IMF arrangement and failed. In fact, he related that how Italy like Portugal, Greece and Spain had suffered from the 2008-2009 global economic downturn.

He advised the DLP that it needs to take note of the impact of Barbadians having to carry the burden.