DLP queries Government’s recovery plan for the economy

THE Barbados Government is being called upon to state its plan for the sustainable recovery of the Barbados economy.

Democratic Labour Party spokesman for Business and Entrepreneurship and First Vice President, Ryan Walters, issued the call yesterday, via a statement.

“It has now become an urgent and inescapable priority that the Mia Mottley administration outlines to the country what its plan for the sustainable recovery of the Barbados economy is. 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 GDP, high unemployment, depressed commercial activity, soaring debt and an escalating misery index,” Walters remarked.

He stressed, “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.”

Walters said that in 2018, the Barbados Economic and Recovery Transformation (BERT) Programme was launched and was touted as the saviour for the country’s economic challenges.

He however stated, “BERT was aimed at restoring fiscal and debt sustainability, addressing falling reserves, and increasing growth. BERT was also to be a home-grown plan with the flexibility to tweak against unplanned current events. But can the government officials say that BERT is working today?

“A review of the Central Bank report shows a dismal Q2 and 2021 year-to-date performance. 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 added.

“Based on the trend from the June Central Bank Report, the gross domestic product (GDP), which now stands at $4.28B, can be forecasted to reach $8.57B at year end. This is 4.5% below the $8.97B recorded in 2020, a year that to date had longer country lockdowns than we are currently experiencing in 2021. Even if the Ministry of Tourism realises 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 stands at 43 weeks, almost four times the benchmark. On the other hand, government debt stands at 150.3% of GDP. 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 NIS. And 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 further pointed out.

Stating that enough time has elapsed and the dust is settling since the impact of the pandemic last year, Walters said that 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 concluded. (RSM)