Arthur cautions Central Bank about printing money in excess

Central Bank Governor Dr. DeLisle Worrell is being warned that he must not indulge the Government’s appetite for finance, by opening up the Central Bank’s printing press, since the country’s stability is at stake.

 

Member of Parliament for St. Peter, Owen Arthur issued the warning, as he made his contribution to the Budget debate in the House of Assembly this week.

 

Stressing that Barbados has now reached a stage where the economy is not firing on all cylinders, yet the country has retained all of the social systems, social benefits and entitlement arrangements that were put in place when it was, Arthur charged that we have come to the end of 50 years, facing a very, very dangerous problem.

 

“Barbados now has to recognise that unless there is a change, far reaching change, stability will go and there will be economic and financial disorder in this country, that will be similar to Jamaica and Guyana, without our having the residual resources to fend off the deterioration,” the Independent MP remarked.

 

Acknowledging that the country as a small open economy has lost almost 600 to 800 million dollars in reserves since 2008, Arthur charged that Barbados’ stability has been put in this tragic set of circumstances, by the Central Bank’s printing of money. 

 

“So in Barbados, we have a situation where, because of the general problems in the buoyancy of the economy, the government has run out of financial options and it has increasingly utilised the printing of money, on a scale that has caused our reserves to fall by 600 million dollars,” Arthur commented.

 

“The only thing of which the government can be sure, is that it cannot continue this policy of having the printing of money by the Central Bank, as the means by which it intends to finance its operations,” he stressed.

 

He however added, “This Budget reflects a determination on the part of the Government to move away from the printing of money, to having government’s operations financed by increased taxation. Now it will not be a popular policy, but the truth of the matter is this, that if the alternative is that you continue to print money to meet the deficits that are unsustainable, it behooves us to come back from that cliff that leads to destruction, because that is precisely the cliff over which Jamaica and Guyana went…so we are at that point where Barbados could be in the departure lounge waiting the final boarding call to disaster and it behooves this Parliament to recognise what is at stake,” the St. Peter MP said. (RSM)