Eye to eye?
Estwick issues fresh warning, as Govt agrees to implement aspects of his economic plan
The controversial David Estwick alternative economic plan for Barbados is being implemented –– at least partially.
Minister of Finance Chris Sinckler made a revelation in a wide-ranging interview with Barbados TODAY, in which he said Government was prepared to take on board those aspects of the proposals relating to tax policy and investment.
“Those are the ones in particular that could give immediate effect,” Sinckler said, adding that “there are others that have more long-term germination, and we continue to work on those assiduously”.
In terms of investment, he explained that Government was particularly interested in Estwick’s suggestion that it look at countries such as the United Arab Emirates (UAE) as a non-traditional source of funding.
“It’s not only UAE. Everybody emphasizing the UAE. Dr Estwick was giving an example of who and where you may get alternative resources from, as opposed to just constantly going to the capital markets and borrowing at exorbitant rates [of interests].
“I don’t think anybody can argue with that logic, because that’s something that makes sense. So it’s not only UAE. He mentioned the Kuwaitis; he mentioned the Chinese; and so forth and so on.
“So we are looking at all of these in terms of an alternative financial structure that brings down the cost of the capital, which Government has to engage for larger projects and major investments that are necessary for the country to spur economic growth and development,” Sinckler added.
The Minister Finance’s revelation brings an end to months of speculation and debate over how the Government would treat to Estwick’s proposals for achieving sustainable growth and attracting new investment.
The matter had been seen as a source of divide within the Cabinet, especially since Estwick, who’s the Minister of Agriculture and Water Resource Management, had pre-empted its disclosure with a suggestion that the country was headed down the wrong economic path.
The former Minister of Economic Affairs had also written Prime Minister Freundel Stuart before presenting his alternative plan to Cabinet for consideration, but eventually went silent on the whole matter after no word was forthcoming on how the Government would proceed with either him or his proposals.
However, Sinckler told Barbados TODAY he had seen Estwick’s presentation even before Estwick had presented it to Cabinet.
“I saw the presentation before it was made; I spoke to him before he made it; I heard it when it was made. We spoke during the presentation and I subsequently had meetings with him after on that matter,” Sinckler said.
Amid suggestions that he and Estwick were at odds over the way forward on the economy, the Minister of Finance also declared: “We see eye to eye on various aspects of it, as other colleagues in the Cabinet do.
“Dr Estwick has full gamut and support from myself, [and] the ministry to execute the elements of that programme that we think can impact positively on the economy. And I have given my full support,” he promised.
However, when contacted today Estwick warned that Government was still continuing “to use the Budget of taxation and expenditure reduction, which cannot work”.
“It will continue to precipitate a contraction of the economy,” he told Barbados TODAY while highlighting the need for a sinking fund strategy to refinance and restructure the country’s debt.
“I said that you could not use the traditional Budget tools of taxation and expenditure reduction to get out of a current account deficit of $1.5 billion, when your long-term debt cost is increasing and your reserves are under stress and the Central Bank has been printing money for two years plus,” the Cabinet minister said.
“Reducing salaries and wages by retrenchment does not deal with this matter if your borrowing cost increases, as is happening,” he added.
Please see also the 14/07/2014 ePaper edition Pages 10&11 and 12&13 for Today’s Interview with Sinckler – http://epaper.barbadostoday.bb.