Safety nets needed
The advice from president Dr Warren Smith came swiftly on the heels of the announced jobs cuts by Minister of Finance Chris Sinckler.
Dr Smith told Barbados TODAY that safety nets are “an indispensable part of good economic management”, and has been utilised by past Governments.
“Things have got to be put in place to ensure that those people who are most disadvantaged have some level of social protection so that the fall out from this difficult adjustment is mitigated to some degree,” he said.
But while the CDB boss agrees that Government needed to act swiftly to arrest the growing deficit problem, he pointed out that it is now for them to follow through by implementing the belt-tightening measures announced earlier today.
“Whilst you’re not going to see me celebrating the loss of 3,000 jobs because that represents very, very difficult times for a lot of families here in this country, I think we need to applaud the Government of Barbados for being willing to take the important step, at least, to announce them.
What we need to see is the implementation. There have been a number of announcements and there has been some uncertainty as to whether the implementation is going to track the announcements. So we will wait with anticipation and expectation that the other measures that have been announced are going to be implemented,” the bank official said.
Noting the fiscal challenges facing the Fruendel Stuart-administration, Dr Smith was firm in his view that no country can persist with large imbalances in their micro-economic indicators over an extended period.
“It is no secret that the fiscal deficit in Barbados hovers somewhere around 10 per cent and that’s unsustainable. We also know that the sovereign debt is north of 100 per cent and that is danger territory by an calculus. Those are just some of the indicators of instability and disequilibrium in the Barbados economy that has to be addressed otherwise it is going to threaten the standard of living that Barbadians have enjoyed for so many years and are proud of.
“One might argue that perhaps the adjustment process has taken too long to kick in, maybe it should have been started earlier, maybe it should have been deeper than it has been up to this point,” Smith added.