Govt doing all it can
Sinckler says faster growth will not happen overnight
A day after Standard & Poor’s (S&P) served notice on the Freundel Stuart administration of a possible second downgrade, the country’s Minister of Finance is insisting that Government is doing everything possible to avoid any worsening of the current situation.
Chris Sinckler told Barbados TODAY that among the projects expected to help Barbados get on better economic footing was the opening of another major hotel property, the details of which he did not disclose.
He said his afternoon that while Government and S&P were on the same page as far as the need for growing the economy from external sources, the administration could not move any faster with respect to cutting spending or growth.
In an exclusive with Barbados TODAY yesterday, the rating agency’s director of sovereign ratings and lead analyst for Barbados, Richard Francis, said Barbados needed to speed up its fiscal adjustments programme, possibly implementing more expenditure cuts and achieving greater economic growth, particularly from tourism and foreign direct investment.
“I understand what S&P is saying and we all want to see growth, but faster growth is not going to happen overnight; it is a process. I see what they may very well be saying and what would be a fair assessment to say, that they want to see a trajectory where the policies and the initiatives that are unfolding that will lead to growth. I don’t think that they would expect that within the next six months you are going to have three per cent growth, because that’s not going to happen,” Sinckler said.
Responding to S&P’s suggestion that the current cuts may not be sufficient to deal with the deficit, Sinckler said his administration felt they were enough in the circumstances.
However, he acknowledged: “If the revenue does not perform up to scratch, then you may have to do some additional expenditure cuts.”
Sinckler noted that several projects were on the cards that would assist in speeding up growth.
He pointed to the Sugar Point Cruise Terminal, which is scheduled to begin in another month or two, and the proposed new multipurpose sugar factory as the kinds of project he believes S&P would want to see this country embarking on.
Additionally, he said: “We have . . . commitments from Sandals, we have signed back on the Four Seasons deal; there is one other major hotel property that is going to come to Barbados. Unfortunately, I’m not in a position to say [anything more] at this stage, but it is a good brand and that should be announced in a few weeks’ time.”
The minister acknowledged, though, that it would take time to build those properties.
“The construction from those, we expect would create some economic activities and give us some jobs and some economic growth. But in terms of the overall tourism product on a sustainable long-term basis, it is really a medium-term project,” he said.
“The area that will pose the biggest challenge for us, and had been for the last two years, is the issue of revenue. And we are looking at a number of things: one, the stimulation of the economy, to ensure we can get . . . activities going without having to spend addition Government resources; and secondly, looking at the tax administration to ensure that we have it at its most efficient best.”