Adjustment equals job losses
The jobs of public sector workers are in jeopardy if government pursues the $400 million fiscal adjustment recommended by the Central Bank of Barbados.
That’s the view of Opposition Barbados Labour Party Economic Adviser, Clyde Mascoll, who said the burden Barbadians were being asked to carry was “much too much” and was unnecessary because “the country’s foreign reserves are still enough to protect the country’s currency”.
Mascoll, a former Minister of State in the Ministry of Finance, was reacting to reports emanating from the recent national economic consultation.
He also said the statements of officials implied that if the “fiscal crisis” was not solved the Barbados dollar would be threatened by devaluation.
“It is clear that there has been a shift in government policy in the post-election period that has to be explained to the public. The fiscal adjustment being pursued represents sending home public sector workers,” the economist said in a statement today.
“This will not correct the fiscal crisis as expected since the government is also planning to spend more on capital projects. The reason for the expenditure switching has to be explained as well as the size of the proposed cuts.
“Discovering that the country’s foreign reserves declined by $200 million in the second quarter could not be the trigger for the $400 million fiscal adjustment being recommended and agreed to by the government of Barbados.”
Mascoll said the key to correcting Barbados’ ills “is still growth”, noting that the Opposition “is not satisfied that the drastic measures being taken to cut government expenditure by $400 million are consistent with achieving economic growth”.
“Furthermore, the country’s foreign reserves are still enough to protect the country’s currency and so the burden being asked of Barbadians is much too much,” he stated.
Mascoll was concerned that government was attempting to “tie the need for fiscal adjustment to the performance of the foreign reserves, which ultimately speaks to the value of the Barbados dollar”, and that “in short, there is an implied threat of devaluation sometime in the future if the fiscal crisis is not corrected”.
He also questioned what he saw as silence on the issue by Minister of Finance Chris Sinckler.
Saying Sinckler “has been muted”, Mascoll added: “He is a far cry from the boisterous minister who gleefully imposed taxes after taxes on the unsuspecting public. He was warned that the problem was one of excessive spending.
“Several years later and conveniently a few months after the general elections, he and the government are prepared to inflict more hardship in much stronger dosage on Barbadians than ought to be the case.
The failure to act in a timely fashion has now forced the government to take very drastic measures.
“The impending difficulties ought to have been announced by the Minister of Finance Chris Sinckler or Prime Minister Freundel Stuart. Not taking ownership of the fiscal crisis has always been the shortcoming of the government.” (SC)