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Former Prime Minister of Barbados and Minister of Finance Owen Arthur could be seen in heavy discussion with Government’s Special Advisor on the Economy Professor Avinash Persaud (left) immediately after the public forum held on Wednesday night.

Former PM: Prepare Barbadians for austerity

Arthur predicts SOEs will be hit next year

FORMER Prime Minister of Barbados Owen Arthur is calling for Government to put everything on the table and tell the country what to expect out of the
commitments made to the International Monetary Fund (IMF).

“Prepare Barbados for austerity. Stop telling us how quickly this programme has been negotiated. How wonderful it is. Many difficult things still have to be done and the country must be prepared to accept that these things are being done as a necessity,” he exhorted.

In fact, Arthur says the Government has already made a commitment to the IMF to see the primary surplus increase to 6 per cent next year, which means a financial adjustment of a whopping $250 million in one year to realise that 2.5 per cent increase. He lamented that this does not augur well for State-Owned Enterprises (SOEs).

“...Most in this instance will not have to do with the Central Government, because that is already being addressed through retrenchment, but will have to take some radical measures to address the situation in statutory enterprises.

“The Barbados Government has 63 statutory enterprises. The next phases will be to address them,” he lamented.

His comments came on Wednesday night as a part of the public forum on the topic “Economic Challenges in Barbados and You”. However, the discussion at some points morphed into a debate on economic policy between himself and government’s Special Advisor on the Economy, Professor Avinash Persaud, who was one of the panellists.

According to Arthur, “What I am, is sensing the government is agreeing to do things and then when government comes under public pressure say ‘we may change what we need to’.”

He lamented that two successive governments in Barbados will still be affected by this IMF programme, estimating that it will take 15 years since at the core of the programme is the commitment to reduce the debt to GDP ratio from 157 per cent to 60 per cent.

He said while the IMF programme is likely to stabilise the economy, it is not a developmental institution. Arthur said there needs to be a growth strategy or a “grand design” to take the country forward.

“If the IMF programme is allowed to stand alone and nothing else is done, and urgently, to address the issues of growth, Barbados will either go into a depression or experience a quagmire – rates of growth that are so low that it can lead to the country stagnating.”

During the discussion, which was hosted by the Women & Development Unit of the UWI, Arthur urged Persaud, “not to put too much a strain on people’s savings”. He said by asking the National Insurance to make a contribution to help the stabilisation process could put the country in a position where it solves one problem but creates another one for the country.

He said that while the situation facing Barbados will be “very difficult”, it is manageable. “But only if we are prepared to take some of the long-standing things that you thought could not be done and put them on the table.”

During the discussion, the audience, which included several top economists as well as students from the University of the West Indies, received a free Economics lesson from Arthur who took to the whiteboard to explain by way of an economic formula the areas which needed to aided by government – namely investments and exports – in order to continue providing the goods and services to the Barbadian people.
(JH)

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