by Shawn Cumberbatch
The stimulus “quick fix” the private sector, Opposition and others have been prescribing is the wrong medicine for the Barbados economy and would cause a relapse.
Central Bank of Barbados Governor, Dr. DeLisle Worrell, issued that warning this morning, urging Barbadians to be patient as the island sought to emerge from an extended period of economic “stagnation”.
Just last month Barbados Chamber of Commerce and Industry President, Lalu Vaswani, said it was time for Government to “urgently” review its strategy of “not stimulating the local economy”.
But responding to questions from the media today at the bank’s Tom Adams Financial Centre headquarters, Worrell said an economy like Barbados could not afford to implement a stimulus like bigger countries, since any such policy would drain foreign exchange and was unsustainable.
He also asserted that despite the absence of growth last year and projection of 0.7 per cent this year “the good news is that we handled our economic affairs well in the face of difficult economic international circumstances”.
“The Government of Barbados cannot do stimulus because the Government does not generate foreign exchange,” he said.
“I am saying that it’s not a quick fix, but the things that we are doing which are succeeding are the things that we have to continue to do, to do better, and to intensify. The things where we know that we have deficits, where we know that Government facilitation is not up to scratch, where we know that the quality of our services is falling down those are the things that we all have to attend to.
“Those things together with the investment, which are currently being made in the tourism sector are going to be the basis of our increased competitiveness. We are not going to see the results right away but the things you do today are your guarantee of success,” he added.
The economist said it was possible to take measures to spur more than marginal economic growth in the next six months, but cautioned that “we would use up the foreign exchange and we would be back where we started with no growth, less foreign exchange”.
“The sensible thing to do is to invest in the things that will secure our competitiveness on the basis of our uniqueness so that we can distinguish our product from the competition, make it a compelling product that people want to return to in tourism, in international business, in things like rum and other exports where we are successful and by that way we can ensure that growth will come even though it will not happen in 2013,” he advised.
Worrell said Barbados had handled its economic affairs so well last year that “the country’s foreign exchange reserves have increased slightly and the exchange rate remains well protected”.
“That means that Barbadians in our private sector and Government are firmly in control of our economic destiny,” he stated.
“The challenge that faces us is to use our resources and our ingenuity to renew the growth of our economy. We know what we must do; improve our competitiveness by raising the quality of our services and upgrading Government business facilitation services, implement targeted marketing strategies, diversify markets for tourism and other services.
“Each one of us has a responsibility in enabling sustainable future growth of the Barbados economy, every Barbadian has a role to play. Our future lies in establishing Barbados’ reputation for excellence of service in the UK, the US, Canada and wherever we market our tourism, international business, and exports and every one of us can do a little everyday to add to that reputation.” firstname.lastname@example.org