From left to right: Economist and Senior Technical Advisor to Government, Dr. Kevin Greenidge; Principal of the Cave Hill Campus, Professor Eudine Barriteau; Head of the Department of Economics, Professor Winston Moore and Deputy Principal Professor Clive Landis, speaking after the UWI/BCCI Economic forum on Monday evening.
ECONOMIST, Dr. Kevin Greenidge has said that Barbados’ response to the global financial crisis, which started in 2008, was not appropriate for that situation.
He told a symposium at the University of the West Indies, Cave Hill on Monday night, that the response continued to be inappropriate over the duration of that economic downturn.
He spoke at the symposium, which looked at Barbados and the Caribbean ten years after the global financial crisis. It was sponsored jointly by the University of the West Indies, Cave Hill, and the Barbados Chamber of Commerce and Industry.
Dr. Greenidge, who is part of the Barbados Economic Recovery and Transformation (BERT) programme, recalled that economic growth in Barbados had averaged about 2.5 per cent prior to the crisis, whereas afterwards growth was a negative 0.5 per cent. Furthermore, he told the symposium that whereas the economy had doubled prior to the crisis it stagnated in the decade afterwards.
Dr. Greenidge was at the time commenting on the so-called “lost decade”, which the present Government has labelled the ten years 2008-2017 when Barbados was confronted by the global economic downturn. He maintained that the inappropriate fiscal response coupled with no growth, saw Barbados moving from a position where the deficit was minus two per cent but slipped to a post-crisis average of seven per cent. “To sustain that, of course you had to continue borrowing to increase debt, and that is why our debt is 157 per cent of GDP, excluding arrears – the lost decade,” according to Greenidge.
The economist pointed out as well that consistent with that fiscal response, the continuing borrowing and Central Bank [of Barbados] accommodation, put a drain on the country’s foreign reserves, which fell from close to two billion dollars at the start of the meltdown to about $400 million at the end of 2017. “This is no better way to characterise the period following the global financial crisis, looking at the statistics,” he declared.
Dr. Greenidge said that what the present Barbados Government has done is to put together a plan with the International Monetary Fund (IMF). It will be aimed at restoring growth, fiscal sustainability and lowering the debt through a debt restructuring programme, and among other things rebuild reserves. (JB)