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Deficit reduction measures not aggressive enough – Estwick

Minister of Agriculture, Food, Fisheries and Water Resource Management Dr David Estwick is prescribing a number of remedies to tackle the fiscal deficit.

Dr Estwick told Parliament last night that the Freundel Stuart administration was moving in the right direction in tackling the problem. However, the outspoken minister warned the measures were not “aggressive” enough.

“I am suggesting that we should move at a faster rate towards refinancing and debt restructuring because I believe very strongly that the magnitude of the deficit and the sustainability in regards to debt service cannot effectively be executed given the overall magnitude of the deficit that you are trying to win with and the debt stock,” Dr Estwick said during debate last night on the 2016 Financial Statement and Budgetary proposals.

The Member of Parliament for St Philip West put forward several recommendations, including a consolidation approach, a new low-cost loan and the establishment of a Sinking Fund Commission, which he believed could get the country out of the red.

“The consolidation approach is nothing new, it’s common sense. But the approach to refinancing prescribes that Barbados consolidate its debts or its series of debts into a single debt with an interest rate lower than the average rate of the collected debts that are being consolidated and create a sinking fund,” Dr Estwick explained.

He suggested that a new low cost loan as a certificate of deposit in the bank could accelerate debt consolidation and ease fears that creditors might have about that state honouring its debt obligations.

In his just over 30-minute presentation, Dr Estwick stressed that if any of these approaches he recommended were properly utilized it would “deal with a whole series of negatives in relation to the debt refinancing issues”.

“We have moved in the right direction, but I think we need to move more aggressively in this particular direction and I am confident that once we do this we can effect the level of debt sustainability and fiscal deficit sustainability that we are looking to achieve.

“But it is not going to happen under austerity programmes because austerity on its own cannot effect debt sustainability. When the debt stock is extremely large and the fiscal deficit is extremely large you will implode the economy of the growth side or prolonged the anaemic growth for a long period of time,” Dr Estwick argued.

4 Responses to Deficit reduction measures not aggressive enough – Estwick

  1. Brien King
    Brien King August 20, 2016 at 3:50 am

    A good doctor would know that if you inject the medication into the patient too rough, you would have tissue damage in that area.
    Real poor people are already screaming and suffering in pain but some understand what it takes to bring things back on stream, but to go over board to rapidly fix the country’s dept problem, to please those on the outside, would stop the real poor in their tracks and might even totally and permanently hurt most, if not all. I think that what was done so far is the gentle approach and is the right approach for the sake of the real poor in the country.

  2. Hal Austin August 20, 2016 at 4:17 am

    Do members of this government talk to each other? Has Dr Estwick cleared his speech with the prime minister?

  3. chris hill August 20, 2016 at 8:58 am

    Wow get another loan, this is not the answer. been tried and still the island getting rid of foreign exchange at a rate that greater than the in flow. we must look a the reasons for lack of currency. energy imports, food imports, new cars, sugar crop failure, tourist not spending. we have few resources available for future foreign exchange and to save foreign exchange. find more viable products to export (seafood, coconut husk, shredded rubber from tires, steel from cars, indigenous foods etc.) the government must also realize the reasons the FX dwindles at such a rate. Dividends taken out of the island from large international companies are a big problem. profits from cost u less, pricesmart, hotel chains, emera, rubis, etc must leave the island in US dollars. it is high time to take the perverbial big hand that is holding back the solar and green industry, already the little that was done has saved some FX. then again i am not in any position to talk as i dont share a seat in the high castle.

  4. Sunshine Sunny Shine August 21, 2016 at 2:31 am

    Stuuuuupse we are getting just what we deserve. Long live the DLP. Legacy complete.


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