Central Bank warning
Former Prime Minister Owen Arthur is tonight warning that the economy could fail if the Central Bank of Barbados does not act quickly by putting in place measures to protect the Barbados dollar.
Speaking in the wake of last week’s downgrade of the country’s credit rating by Moody’s, which also pointed to increasing pressure on the currency as a result of Government’s borrowing, Arthur said the law governing the Bank clearly states what must be done if the dollar is under threat.
“Moody’s is telling us that it had to downgrade Barbados by three notches because the Central Bank has been printing money and it is undermining and threatening the stability of the Barbados dollar. The question that every Barbadian [should be asking], and I am asking it on behalf of the people whom I represent in St Peter, [is] has Dr [Delisle] Worrell, in the face of the situation where the actions of the Central Bank in buying up Government treasury bills by printing money, complied with section 48 of the Act that requires him to submit a report to the minister drawing attention to situation?
“If, after consultation with the Bank, the minister is of the opinion that policies being pursued by the Bank are not adequate or conducive to the achievements of the Bank as set out in section five, and section five says the Bank must promote monetary stability…then the minister shall send a written order to the Bank determining the policy to be adopted by the Bank and the Bank shall thereupon give effect to that policy while the order remains in operation,” the St Peter Member of Parliament said.
Yesterday, Prime Minister Freundel Stuart described the Moody’s downgrade as trash.
In response, Arthur merely urged the prime minister to seek advice before speaking on such matters to avoid bringing his office into disrepute.
The former minister of finance, who also served as a director of the central bank, told the meeting of the Barbados Labour Party St Peter branch at the Alma Parris Memorial Secondary School that the time for “announcements and pronouncements are over”.
“Freundel face it and fix it. Govern. We did not need Moody’s report to tell us the true state of things in our land. For many of you it is lived, experienced,” he said, adding that some of the actions required of Government may be embarrassing.
The veteran politician likened the situation in the country to an avalanche and pointed to recent statements by veteran hotelier Bernie Weatherhead, which suggested that some small properties could close this summer.
“If our leading sector fails, this economy can fail. And I urge Barbadians to take it seriously. There are others [countries] that have failed and it will take a generation to bring it back,” Arthur warned.