Marshall says no to IMF

One economist has made it clear that Barbados has no business going to the International Monetary Fund (IMF).

Head of the Sir Arthur Lewis Institute for Social and Economic Studies, Dr. Don Marshall insisted that taking the ‘It’s Mainly Finance’ route was not the right step for the island.

“Thanks to the Barrow/Grantley Adams vision, I am here to stand and say to you today that none of them in Washington have an understanding of what industrial policy will look like in small island economies like ours. So I would say no to the IMF, because the best that we can achieve by going to the IMF is finance sector led growth where investors would be very happy, while the bulk of the persons, who are employed by the state would feel a new sense of nervousness as they watch their colleagues go home, because the burden of the austerity will fall to the people and not to the financiers and investor class,” he stressed.

Pointing to the $600 million food import and $800 million energy cost bills, the government was saddled with an annual basis, he said now was the time to “fix the things we can fix”, as the burden of adjustment should fall within these areas.

“In terms of the fiscal, I am suggesting let us stop the cannibalising of the welfare state by disguise. There is a lot of intellectual dishonesty going around when people say ‘reduce the size of government’… that language is saying take a look at your transfers and your subsidies and make cuts, but nobody wants to name and own the cuts. Everybody has a special interest to protect, a sacred cow to hold dear,” the political scientist said.

Furthermore, he noted that plans must come to the fore on how to reconstitute the state in light of the current crisis.

Addressing yesterday’s lecture on ‘Contemporary Futures in Caribbean Development Policy’ at the Grand Salle, Marshall encouraged restructuring the island’s debt obligations to the large owners of the local debt.

“We need to negotiate not with the IMF, but perhaps with the Chinese on a concessionary loan arrangement in order to prop up our foreign reserves.
Everybody balks at that, but has no problem with us going to the IMF, who has no understanding of industrial policy and that amazes me because of the way we frame the debate. ‘Go to the IMF and get a concessionary loan at reduced interest rate and let them hold you to the fiscal discipline that you lack for yourself’. That is the advice we are being told,” he said frankly.

Marshall asserted, “We have a responsibility to be disciplined. We should not be relying on the IMF to hold us to discipline where we would be benchmarked on how we please investors and not how we look after the vulnerable and how we protect the way of life that we know is the best way in the world.” (JMB)