More adjustments coming, warns Governor
By next week Barbadians could know what additional measures the Government will be implementing to achieve a reduction in its fiscal deficit.
Governor of the Central of Barbados Dr DeLisle Worrell made the revelation as he addressed the luncheon of the Barbados Association of Professional Engineers (BAPE) at the Savannah Beach Hotel today.
Worrell said the medium term fiscal strategy was working but warned that additional measures were needed to bring the deficit down “in the second half of the fiscal year” to a “comfortable” level going forward.
“So the process of fiscal adjustment is an ongoing process. But here on in is going to be a structural process accompanied by real reform of the Government services. A reform which is going to bring greater efficiencies in the delivery of those services,” said Worrell.
“But there is also another two per cent or so of GDP that still has to be found in terms of further adjustments and I believe that the Minister of Finance [Chris Sinckler] is going to address that next week.”
In relation to the national debt, the Central Bank Governor said a lot had been said about it “and most of it is unnecessarily alarmist”, adding that “the notion” that it was too high was “ridiculous”.
“The thing we have to worry about in this country is foreign exchange and the debt that can blow us off course is the foreign debt. And as far as the foreign debt is concerned we are in a very comfortable place,” said Worrell, adding that it cost the Government “about six to seven per cent of what we earned in foreign exchange” this year to service that external debt.
Though admitting that the domestic interest was “quite large”, Worrell said “it doesn’t matter how many economists and with how many PhDs get up and tell you that it is a problem. He argued it was not since the debt “is owed to Barbadians and it provides an investment opportunity for Barbadians”.
“We have good prospects. It is not an overnight thing. We have the appropriate policies and I always issue an invitation to all and sundry if you have better ideas please share them. And we are open to all constructive ideas,” he said.
However, the Governor insisted that devaluation and debt restructuring did not make sense for Barbados.
“Anything else we are prepared to consider,” he added.
The economist also suggested that inefficiencies in the public sector could be contributing to the low payment of taxes to Government.
“There is no question that we do not have a 21st century public sector. There is no question [about the] level of inefficiency within the public sector,” the Governor said, adding that “people wouldn’t have a difficulty in paying the taxes they pay if they were getting first class service for those payments. They would still complain but they would pay the taxes. It would be acceptable but it is because of the inefficiencies. That message is a message for my colleagues in the public service,” Worrell said.