Investments needed

BARBADOS needs to pursue more outward investments so as to earn more foreign exchange.

This is the view of economist and President of the Barbados Economics Society (BES), Shane Lowe.

He believes that while this country attracts foreign direct investment (FDI), it should at the same time be taking the decision to have similar initiatives in other markets.

In recent years, Barbados has attracted a considerable amount of FDI from mainly Trinidad and Tobago in a cross section of economic sectors.

Lowe said that people in this country tend to complain about those T&T investments in Barbados. “What they are doing is undertaking outward investments from which dividends flow back into Trinidad and Tobago.

“So Barbados needs to do this as well,” said Lowe, who was recently elected president of the BES, a grouping of mainly Barbadian economists.

Foreign exchange reserves in Barbados have totalled approximately $549 million at the end of September this year. Comparing the performance of the economy in 2017 with what took place during a similar economic slowdown in the early 1990s, Lowe said that the large deficit Barbados experienced in the 1990s was financed by the Central Bank of Barbados, which is similar to what has been happening this year.

However, he did say that although the deficit running currently at about four per cent of GDP is still high, it is lower than what obtained a few years ago when it reached 12 per cent of GDP.

“We also have falling foreign exchange reserves, a decline that has been accelerated by debt repayments,” he remarked. (JB)