PM discusses recovery efforts
Prime Minister Mia Amor Mottley says Government has endeavoured to share the burden across various sectors, as she works at getting the country back on track.
Speaking during a panel discussion at the Council for Foreign Relations during the Spring Meetings of the World Bank Group and the International Monetary Fund held in Washington DC, PM Mottley told those gathered of the Barbados Economic Recovery and Transformation (BERT) Plan, which she said is designed to help the country emerge from the “lost decade”.
“Ten months ago we inherited a government that had the third largest debt to GDP in the world after Japan and Greece at 174 per cent. We had foreign reserves of about $400 million Barbados dollars, $200 million US [dollars]. We immediately, within one week, suspended our international debt payments and announced the restructuring of our debt. We have completed the domestic restructuring… We are in the middle of completing our external debt restructuring; fortunately for us that only constitutes 21, 22 per cent of our overall debt,” the PM, who is also the Minister of Finance explained.
She said the burden has been shared between capital and labour, rather than putting all of it on labour as was traditionally the case, and she noted the burden has also been shared between domestic residents and tourists visiting these shores. The Prime Minister explained that it was important to include tourists, as they constitute as much as three times the local population and have access to the local infrastructure in the same way residents do.
“We’ve chosen to share the burden with respect to those who have gotten the benefit of egregious contracts rather than just purely coming after the user fees of those who use transport systems or other types of user fees within the system. And one of the things we have determined in terms of determining our capital works programme, which is limited in terms of what government can do, because government doesn’t only tax and spend, but where we tax and spend there will be a limited opportunity because of our determination to bring our debt to GDP down to 60 per cent by 2033, that we have to become a good society,” she said.
She continued, “There are certain things that we have to lead the way; one through our capital programme but two, where we can’t afford to continue to tax and spend, we use the other powers that government has as part of its fiscal governance – legislation, regulation, investment, empowerment etc.,” she said.
Meanwhile, responding to a question from the audience about the private sector’s involvement in developing states like Barbados, PM Mottley said she only recently had to remind a large regional investor that her Government runs a country, not a company and cannot afford to “play fast and loose” with “egregious requests”. Nevertheless, making an apparent reference to Sandals, she said previous agreements struck by the last Government in respect of that company will be honoured.
The Prime Minister said, “Barbados has one asset, that is its reputation. The last government awarded tax incentives that were exceedingly egregious over a 25-year period fully, and then another 15-year thereafter and they wanted more even on top of that. And I made the point that we will honour the agreements of the last government because not to honour them would cause immeasurable consequences to our reputation, and to honour them would cause a large measurable hit”.
With that in mind, she added, that a joint public/private sector committee has been set up to look at what is a fair, decent and reasonable deal in respect of the hotel chain. (JRT)