Currency under threat

 

A leading regional political economist today warned of a very “rough and painful” road ahead for Barbados, while predicting that a currency devaluation was on the horizon, as well as another stringent International Monetary Fund (IMF)- supported austerity programme.

Professor Emeritus of the University of the West Indies (UWI), Neville Duncan, spoke to Barbados TODAY against the backdrop of last Friday’s announcement by Minister of Finance Chris Sinckler of 3,000 impending layoffs in the Civil Service between January and March next year.

Duncan, who is the former head of the Sir Arthur Lewis Institute for Social and Economic Studies (SALISES) and respected voice on regional economic and political issues, said while he generally sought to be positive in his assessment and outlook on the island, on this occasion, he really could not help but be negative, given its now obvious economic reality.

He noted that in response to its current problems, the Freundel Stuart Government had already moved to abolish free tertiary education, which had been considered a Holy Grail, by way of a significant cutback in its funding to the UWI.

“That was a severe cutback, so they would have earned some spending room; but obviously it is not enough and to lay off some 3,000 workers in Barbados is an extremely significant drop in employment given the population,” said Duncan.

He went on to suggest that with the loss of each job in the Public Service, about five to six other people would be impacted per household. This has nothing to do with other layoffs which could be pending as the private sector is impacted by the Government cuts.

“. . . So it is a crisis situation,” surmised Duncan, who lived and worked in Barbados for several years but is now based in his native Jamaica.

He also expressed serious concern that Barbados, which previously entered into a structural adjustment programme with IMF to stabilise its economy in the early 1990s, was headed right back into the clutches of the Washington-based financial institution once again.

However, he said that situation right now was even more dire than it was back then.

“It is worse because these are now actual layoffs. At that time, the Government could have called upon public servants to say, ‘Hey, look, take a pay cut and we will pay you back with interest when the time comes, when things get better’.

“That was an excellent strategy at the time. [Now] there is no promise like that that can be made because you can only make that kind of promise when you are sure that the initiatives you have taken will yield new jobs, new types of jobs to keep the Barbadian economy going; and it seems obvious to me that there hasn’t been that new and added dimension yet to the Barbadian economic development strategy,” the professor said.

On the issue of a currency devaluation for Barbados, whose dollar has been fixed at its current peg of at two to one against the US dollar since July 5, 1975, Duncan was asked directly whether he felt it was a real possibility.

He responded: “I think it is, but I don’t know how they [Government] are going to undertake any activity that can really prevent that. There has to be some adjustment [to the currency], but even that will be painful for people too, because the income they earn will be depreciated by the value of the food imports.

“Food imports will get more expensive and in Barbados you import way too much food, and so it is going to impact negatively on the people of Barbados as well,” he added.

Duncan also compared the economic situation to that which faced by banana-dependent Dominica back in early 2000 when it was forced to go the route of the IMF. The professor said Barbados was definitely worse off than Dominica was at the time. He also listed it among regional economies in trouble, like Jamaica and Guyana; but he pointed out that in Guyana’s case it was mineral-rich and had enough food resource to feed itself in its time of need.

The same, he said, simply could not be said for Barbados which he suggested had wasted precious time in diversifying its tourism-reliant economy and in recent times had been slow in reacting to the needs of a changing world economy.

And while there is more than enough blame to go around for Barbados’ economic troubles, he warned that the country’s problems did not develop overnight, as he urged trade unions, the private sector and the political Opposition to get on board with the Stuart Government as it seeks to manoeuvre through an extremely painful period.

In direct reference to the unions, which have been against the sending home of workers, Duncan cautioned them that they could make all the noise they wanted but there was simply no way of saving the 3,000 jobs. He also expressed doubt that the current situation would be any better if the Opposition Barbados Labour Party was in Government, saying now was the time to pull together a national Government in the best interest of the country.

kaymarjordan@barbadostoday.bb 

23 Responses to Currency under threat

  1. Shelly Blackman
    Shelly Blackman December 16, 2013 at 11:26 pm

    oh hell no… naw.. tek yuh hand off we currency… yuh hear muh… we ent want to end up like we neighbors…. where are all the brainy people… who get free education… whey dem is…. dammit to hell… fix de damm ting…. we survive this long…. all dem big and powful foolish people…. use wuhna brains and do something…. laud have mercy…. we pray oh laud…..

    Reply
  2. Angel OfThunder
    Angel OfThunder December 16, 2013 at 11:51 pm

    U would think that after we as bajans came so for to let these selfish people make this great nation loose its brightness,Barbados we or the envy of the west Indies,let’s stop with these games an return to our glory days were we fight for each other an what was right for every one….

    Reply
    • Renny Johnson
      Renny Johnson December 17, 2013 at 5:21 am

      No, we WERE the envy of the West Indies, now we just a poor copy of Jamaica. Economy in the toilet, morals in the gutter, sell our votes for a t-shirt or a glass or rum. Crime out of control cos the police to dam lazy. We need to grow up and start taking action instead of waiting around for someone else to dig us out of this mess

      Reply
  3. Allan B Love
    Allan B Love December 17, 2013 at 12:18 am

    Call Elections … lol

    Reply
    • Renny Johnson
      Renny Johnson December 17, 2013 at 5:03 am

      Call elections and do what? What’s the matter, do you need another t-shirt? No point calling elections until we know what the oposition gonna do, what solutions they have, what cuts they gonna make and how they gonna turn Barbados around

      Reply
  4. Allan B Love
    Allan B Love December 17, 2013 at 12:18 am

    Call Elections … lol

    Reply
  5. Angel OfThunder
    Angel OfThunder December 17, 2013 at 12:59 am

    Some thing in right bout this hold picture I is 30 now an never seen Barbados in these conditions b4,were all d money gone wanna buried it??

    Reply
  6. Angel OfThunder
    Angel OfThunder December 17, 2013 at 1:08 am

    2013 now 2014 in weeks time an wanna telling we wanna broken,boy hohooo wanna mekin joke boy wanna really pull down this country real bad,I wanna neva believe if some body tell me Barbados done fcuk com an break I wanna neva know…

    Reply
  7. Angel OfThunder
    Angel OfThunder December 17, 2013 at 1:18 am

    U mean too tell me all tha wukin up at crop over just gone an we country goin break an na body in say nuffin,I shouldda keep my money doe,I break an government break to wa we in no help ta na body this xmas ,I know my girlfriend leavein me this time fa sure

    Reply
  8. Steve Jemmott
    Steve Jemmott December 17, 2013 at 1:44 am

    sad

    Reply
  9. Angel OfThunder
    Angel OfThunder December 17, 2013 at 3:01 am

    U mean wanna in put down nuffin fa d rainy days chhhhaa,we really out sea now boy

    Reply
  10. Diana Ghislain
    Diana Ghislain December 17, 2013 at 5:19 am

    All politicians in the world are the same …

    Reply
  11. Diana Ghislain
    Diana Ghislain December 17, 2013 at 5:19 am

    All politicians in the world are the same …

    Reply
  12. Mac10 December 17, 2013 at 9:14 am

    @Shelly – Subtitles please!

    Free education indeed!!!!

    Reply
  13. David Hall December 17, 2013 at 9:26 am

    There is one thing on which I beg to differ with the distinguished professor. The outstanding contribution of Owen Arthur in the successful management of the Barbadian economy, despite our critical lack of natural resources – over a fourteen year period cannot be underestimated, as the eminent professor seems to have done. It seem abundantly clear that Mr. Arthur not only recognized the need for restructuring the Barbadian economy as global condition continued to worsen, but spoke directly of the need to do so. However it is also very-clear that over the last six years or so the current DLP administration, beginning with former Prime-Minister David Thompson, in the maintenance of a populist approach to government , chose to ignore principles of sound economic management and advice and embarked on unbridled spending and squandering of the country’s foreign reserves, human capital and social good will. The many programs the government undertook, which even now it refuses to abandon even when they cannot be sustained; the many indiscriminate waivers given to billion dollar companies, during tough economic times; the reckless approach to spending of foreign reserves; failure to appraise the public of the challenges facing the economy and enlist the help of persons more capable than itself in meeting those challenges; and our antagonistic attitudes towards our neighbors , are all but of few of the many ways in which the Current DLP has helped to hasten the demise of the Barbadian society. Therefore, whatever shortcoming the BLP and Mr. Arthur may have had I do not accept that there is any way if Prime Minister Owen Arthur was in charge or even allowed to make a meaningful input along with Ms Mottley and Mr. Clyde Mascoll that we would be in this dire situation.

    Reply
  14. Angel OfThunder
    Angel OfThunder December 17, 2013 at 10:51 am

    Thanks some very good points,when all is said an done we the people or the resources of this Great nation,what I think the government is doing wrong makein plans with out running testing first,an remember we or small in numbers an there is great division among us in every aspect of living here,we need to focus on the weakness of our Nation,2013 an we about to go into 2014 we have to face this darkness head on with no fear,falling is easy its the getting back up that may created the problem,every bajan have his/her Duties to this Nation how ever small ur contribution might be u have a roll to play,I ask the government of BARBADOS to go back in ur records an see what cause this down fall,this is not our destination this is not the future of our COUNTRY…

    Reply
  15. Angel OfThunder
    Angel OfThunder December 17, 2013 at 11:02 am

    Barbados we or on the Gold coast,the government needs to see the people u trust in more then we bajans have fail U,all ur allies were or they, all them people the government made deals with were or they now,but look who will suffer for it the bajans that just want to live an die in peace knowing there government did everything in its power for its people rich an poor alike thank u…

    Reply
  16. Angel OfThunder
    Angel OfThunder December 17, 2013 at 11:19 am

    The government seem not to have control over the moneys in our country,there or people in our Island with very big bank books that made deals with our government,an made millions from the deals but put nuffin back in our country,don’t be fool they or people here that feel no way about 3000 goin home,they can pay all them people in one withdrawal for the next few years an still have money to feed the whole of BIM better believe it some wealth people just look around Barbados dont take my word for it look for us selfs…

    Reply
  17. Angel OfThunder
    Angel OfThunder December 17, 2013 at 11:24 am

    When the poor fights back its call violence,when the rich fight back is call business …

    Reply
  18. Ryan Bayne
    Ryan Bayne December 17, 2013 at 11:27 am

    That is, the Death of the Bajan Dollar.

    Reply
  19. Rawle Spooner
    Rawle Spooner December 17, 2013 at 2:08 pm

    Glad he made the point that regardless of who was in power nothing would be any different when it comes to currency and economy.

    Reply
  20. Rawle Spooner
    Rawle Spooner December 17, 2013 at 2:08 pm

    Glad he made the point that regardless of who was in power nothing would be any different when it comes to currency and economy.

    Reply
  21. Clyde December 17, 2013 at 4:11 pm

    I remember once when an African nation was overthrown by a group of young guys.
    About two month later,things were in turmoil,the leader asked “God what have we done” and offered to hand leadership back to the man they had over thrown.
    That leader had already pulled anchor and headed for one of the European countries. Man you got ta be kiddin not me and that,you got it keep it.
    Running a country is more complex than it seem.
    The New Dems are finding that out.
    Barbados will pull out of this,O Ye Of Little Faith.

    Reply

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