Former prime minister lists several indiscretions by Central Bank governor
Former Prime Minister Owen Arthur has released a detailed charge sheet against Barbados Central Bank Governor Dr DeLisle Worrell, accusing him of a series of intellectual and other indiscretions which he believes warrant his urgent dismissal.
In an interview with Barbados TODAY, Arthur zeroed in on yesterday’s pronouncements by the Governor in relation to the Value Added Tax (VAT) system, saying Worrell’s statements were both “irresponsible and cavalier”, and deserving of his head.
“Barbados is facing an apocalypse and Dr Worrell is now the chief horseman of our apocalypse,” warned Arthur, after the Governor told a news conference that the VAT, which has been in force here since 1997 and which has been credited over the last 17 years with raking in billions into the Treasury, was both unnecessary and unsuitable for the island.
The Governor went on to state that the VAT had “absolutely no advantages” for Barbados. In fact, he described it as “a mess” and “a complicated tax to operate” –– one that creates all kinds of controversies regarding what you exempt and what you don’t.
Though not surprised by the Governor’s statements, Arthur, whose former regime had actually introduced the VAT nearly two decades ago, is concerned that they are being used as a “distraction from what should be facing us at this time” and “what is necessary to stabilize and to save our economy and the society”.
He pointed out that there was a long history to the Governor’s comments, noting that as far back as 1994, in his Budgetary presentation, late Prime Minister David Thompson had indicated the intention of the Democratic Labour Party Government at the time to introduce a VAT from January 1, 1995.
“I supported a value added tax in Opposition and looked forward on becoming the Head of Government in 1994 to introduce it, but I was advised that the [then] Deputy Governor Dr Worrell opposed it,” Arthur recalled.
“I asked him [Dr Worrell] to document for me his reasons, and he did send me a letter on it, and I must tell you, there were two consequences: one is that the reasoning was so vapid that I knew then that I would never be able to appoint Dr Worrell as a Governor of the Central Bank,” said Arthur.
“. . . And, secondly, every time I wanted to find something to laugh at, I took out Dr Worrell’s letter to read it because he was effectively advising that we should have taken the 11 pre-existing bits of taxes and reform them, rather than introduce the Value Added Tax, so that this is not new territory for Dr Worrell. This is a longstanding fascination that really does not draw upon any particular empirical, or theoretical, or conceptual foundation,” the former Prime Minister said.
Arthur, who is a trained economist, emphasised that contrary to the Governor’s stated position, the VAT had been “the tax of choice” and “it has more than performed the purposes for which it is intended in Barbados”.
“If this was Dr Worrell’s only indiscretion, I think we could dismiss it. But how long are we going to dismiss the series of indiscretions that this man has been perpetrating?”
He proceeded to outline his detailed list of other charges against the Governor saying “the notion, for example, that the economy was stable was consistently put by Dr Worrell and the notion that there were no alternative policies that could be pursued”.
“We now find that that has been really a piece of intellectual folly,” said Arthur, adding that “Dr Worrell has gone on record, in papers published, saying that Barbados was stable because we were about to invest in, and produce $265 million US of ethanol”.
“He has gone on record as saying that we don’t have a debt problem . . . [and] as trying to develop a new methodology for measuring unemployment that people have dismissed out of hand.”
He emphasised that the current argument by Worrell against the VAT was only “a foolish distraction”, adding: “The notion that a Minister of Finance should be now forced have to stop doing what has to be done to save this country and to have a fiscal convulsion –– because that is what it would be to remove the tax and replace it with whatever else –– is irresponsible and cavalier.”
The Member of Parliament for St Peter further cautioned that the island had reached a stage where it could no longer dissociate an aspect of the “very horrible circumstances” it faced economically from the nature of the advice that Worrell had been advancing.
“It seems as though he [the Governor] prides himself on the extent to which he is unorthodox as happened for example in his altercation with the managing director of the International Monetary Fund,” said Arthur.
“[However], my advice to the Government is to ignore Worrell and I hope the Government of the Bahamas [to whom Worrell has offered similar advice on the VAT] will ignore him and really let us focus on that on which we are focusing.
“What I thought he would have been telling us is how he got the Central Bank of Barbados into this now paltry state where it is now losing money, even while printing money, and he is sending home 60 workers.
“I thought the [Central Bank] board would tell Dr Worrell he needs to send home one person. And that one would be Dr Worrell,’ Arthur said.