ICAB: Make B’dos more efficient, business friendly

THE Institute of Chartered Accountants of Barbados (ICAB) sees the need for the implementation of measures to increase investor confidence, speed up implementation of major investment projects, and boost productivity and service levels in both the public and private sectors.

In a press statement issued by ICAB’s Executive Director Reginald Farley, in response to the Central Bank Review of the Barbados Economy on January 31, ICAB stressed that the recent further fall in Barbados’ ranking in the Ease of Doing Business – from 117 to 132 out of 190 countries – is a stark reminder of the need to implement the structural reforms to make Barbados more efficient and business friendly.

“Additionally, the Barbados Private Sector Association (BPSA) strongly recommends that the Government enter into negotiations with a suitable multi-lateral for a loan that will provide security to the foreign reserves and may give a short-term reduction in interest payments.

“ICAB is of the view that such an arrangement would be more attractive if it has the additional benefit of supporting the required fiscal discipline and governance reforms across the public sector,” the statement read.

ICAB views the continuing decline in the level of foreign reserves as of great concern, and is suggesting an adequate foreign reserve buffer, estimated at 12 weeks of imports, as a key component in Barbados’ economic stability, maintenance of the fixed exchange rate, and investor confidence.

Worrying trend
The fact that reserves have declined every year since 2012 from 20.2 weeks of imports to 6.6 weeks of imports is a worrying trend, the statement read.

In addition, ICAB is also of the opinion that the low level of foreign reserves places Barbados in an increasingly vulnerable position to external economic shocks, such as increases in the price of oil.

“In fact, the Central Bank noted that last year the price of imported fuels rose by 24 per cent while the volume of fuel only increased by three per cent,” the statement indicated.
Nevertheless, while the state of public affairs remains a cause for concern, ICAB pointed out that it is good to note that the fiscal deficit is on a downward trajectory and the Central Bank has slashed its printing of money to finance the deficit from $714.5 million in April to December 2016 to $96 million in April-December 2017.

“Arrears owed by Government in the form of tax funds and payments to suppliers of goods and services are still a problem. No official figure has been provided by the Government but based on available information, it is creating cash flow challenges for some businesses and individuals,” the statement said. (AH)