From left: Governor (Ag.) of the Central Bank of Barbados, Cleviston Haynes; Dr. Andreas Schotter, Professor for Global Strategy, Ivey Business School; and former Governor of the Central Bank of Barbados, Dr. DeLisle Worrell, conversing on the sidelines of the Sagicor Cave Hill School of Business and Management (SCHSBM) ‘Navigating a Path to Growth: A Risk Management and Competitive Intelligence’ Conference, yesterday.
Investments needed!
FORMER Governor of the Central Bank of Barbados (CBB), Dr. DeLisle Worrell, believes that Barbados needs investments to increase productive capacity.
Dr. Worrell made the comments yesterday while participating in a panel discussion on Risk Management at a Cave Hill School of Business conference at the Hilton Barbados.
He said that the country has the recipe for economic success. It involves things that must be done in the short-run, but with potential rewards in the long-run.
Dr. Worrell mentioned the development of renewable energy and cultural industries which have potential. However, the former Governor remarked that in order to build these sectors out to make them powerhouses, requires fiscal incentives and finance. He maintained that the way Barbados and other Caribbean countries grow their economies is by providing goods and services at internationally competitive prices. As a result of that, the foreign exchange earned goes to meet the demands in the economy.
Tourism, he further noted, is one of the main drivers of the region’s international competitiveness, along with natural resources, world-class cultural services, music, and the enormous potential there is in renewable energy, which for Barbados can provide 100 per cent of the energy required in this country.
However, the Economist said that every year since 2010 the Government has been spending more revenue to finance its operations than it has collected in taxes.
According to him, there has been too much demand sustained over the years which meant that the CBB has had to finance an overly large Government deficit and that the growth in debt is as a consequence of the failure by the Government to close the fiscal gap.
He pointed out that the Central Bank has had to finance Government’s large fiscal deficit and has to do so with Barbados dollars.
According to him, when those Barbados dollars are spent, the supermarkets, gas stations and wherever, the suppliers when they go to restock are going to require foreign exchange. “That foreign exchange is brought out of Central Bank’s reserves,” said Dr. Worrell.
As such, he went on, this situation signals a need for fiscal consolidation which the Government has not been achieving.
The Risk Management conference continues today. (JB)