Touching foreign reserves a no-no
Touch the island’s foreign reserves and prepare for economic disaster.
That’s the warning Parliamentary Secretary in the Ministry of Economic Affairs, Senator Jepter Ince, issued today.
He urged Barbadians to ignore the Opposition Barbados Labour Party’s “economic voodoo” advocating using the foreign reserves to stimulate economic activity.
Ince was speaking in the Upper House today as senators debated an increase in the limit at which Barbados can borrow money.
“You are hearing the argument that we are now supposed to take our foreign reserves and stimulate the local economy, yet … in 2008 we were chastised for not looking after the foreign reserves,” he recalled.
“But now I am hearing … we must now use the surplus foreign reserves to stimulate economic growth. It is the height of economic rubbish, I call it economic voodoo. It is what I call the David Copperfield of economics, creating a fantasy, wanting persons to believe that a brown cow suppose to look black at night.”
“If you are asking a Democratic Labour Party Administration to keep your foreign reserves at a benchmark of 12 weeks and it so happened that the energy cost goes up, it so happened that the price of commodities, wheat and barley and everything else, goes up, then the question must be asked: what are you going to pay the increased cost with?”
Ince said any administration that spends reserves of foreign exchange in a recession “that has continued to create pressure within the international markets, as well as within your local sectors” was looking for trouble.
“How are we going to finance our imports. If your foreign reserves run into trouble, you are going to create serious problems in your balance of payments and when you have balance of payments then you have to march towards the door of the IMF,” he warned. (SC)