Boos’ remedy

Financial analyst says economic answer may lie on IMF doorstep

It’s time to face up to reality and implement an International Monetary Fund – backed structural adjustment programme.

Prominent businessman and financial analyst Peter Boos made this strong recommendation this evening as he suggested that Government’s fiscal consolidation programme may not succeed due to lack of confidence in the outcome.

He told Barbados TODAY that the austerity programme will cause the economy to shrink further and lead to even more layoffs in the public and private sectors.

Peter Boos
Peter Boos

“We are in a very deep, troubling problem and unless we attack it in a very strategic way, which deals with all of the fundamental issues in a structured, organised way, with everybody understanding where we’re trying to head, then it seems to me that what we’re doing is making things worse rather than better,” he said.

“The IMF is not an ogre. What going to the IMF does for you is that it provides you with the level of finance and foreign currency loans at reasonable rates of interest. It provides expertise to help you with the transitions and the structural issues that we just have not dealt with.

“There is little confidence by investors in the economy so the IMF coming in would give certainty to investors about the programme that you are pursuing, there is transparency and openness in the management of public affairs,” the financial analyst said, citing as an example “staggering” findings in the Auditor General’s report and failure by the National Insurance Scheme to publish audited accounts over the years.

“We need to quickly accept and acknowledge the very serious condition that Barbados is in. We are fooling ourselves to believe otherwise and get on with adopting plans that are credible, credible in the eyes of investors and I think that’s important . . . I don’t think there’s anyway we can avoid asking the IMF for their financial as well as technical assistance. Clearly, we are having discussions with the IMF but I think it must go much deeper and much sooner. The faster we get there the better.”

Pointing to the seriousness of the situation, he said the gross national debt to GDP ratio needs to be cut in half, while pointing out that the fiscal deficit is nearly 13 per cent of GDP.

Additionally, he noted, Barbados can only access capital markets at very high borrowing costs due to its poor credit ratings by international agencies, unemployment on the rise, and foreign direct investments drying up.

He also pointed out that Barbados was the only Caribbean country projected to have negative growth this year.

“I think it is so because we are uncompetitive. We have lost our competitive edge. Our export industries are all weak. You can’t tax and shrink your economy into growth unless you address a lot of the fundamental issues that underlie competitive, which includes innovation, productivity, business facilitation and the legal justice system. There’s no end of issues that we have failed to address over many, many years,” Boos said.

“Barbados has to go the way of public sector shrinking, which means privatisation and reduction of entitlement spending. There is no other way alternative,” he warned.

Back in the 1990s, Barbados was forced to enter a structural adjustment programme with the IMF but just last month, former prime minister Owen Aurthr warned that the last thing the island should want to do is to go back to the Fund.


4 Responses to Boos’ remedy

  1. Tony Webster August 8, 2014 at 6:20 am

    Mr. Boos…please keep the faith… as some people, don’t “get it”…just yet, dat “de party ovah!
    Howcum, we is independent now…but we now are really reduced to runnin’ ’bout evahwhere..mekkin’ teet-skinnin’ deals wid strange people who we tink are some kinda new relatives we discover? We cyan yet see dat dese people gine get their pound of flesh, sooner , later, or twice-over, even out of our great-grands! Dem people, cuttin deals dat will profit THEIR trildren, Sir!

    Sir, lemme explain it simple, sir: Is like de London ‘Underground’, Sir, when de train slow-down and come to a dead-stop…and de man holler-out ALL CHANGE… ALL CHANGE PLEASE!! Yuh could “change”..or stay on de train..dat ent gine no-where. Sir!

    Is like de house ent just want jes’ a few boards ‘wid termite’, being replaced… but termites is everywhere in dere Sir…and de whole house got to re-build new, Sir! And we ent gine build-back in wood, Sir…we gotta usin’ blocks and steel did time, becausin dis time, we buildin’ to last for long-time Sir. Like for next 50 years or more, Sir.

    You know why peoples ain’t listening to you Sir? You name ent nice, like Carmichael, or Brathwaite, or Walcott, nuffin’ so! Change you name, Sir…but stick to topic..and message Sir.

    Last train, to San Fernando, Sir. Betta believe it, Sir.

  2. Santini More
    Santini More August 8, 2014 at 7:32 am

    We should have gone to the IMF 5 years ago when the writing was on the wall and we were in a much stronger financial position. Now we are deep, deep, deep in the crapper and all this Govt will do is close their eyes, stick their fingers in their ears and speak more lies. How much further will this economy fall before they do something?

  3. Tony Waterman August 8, 2014 at 12:51 pm

    @Santini more!!! Your question””How much further will this economy fall before they do something?”” there used to be a saying back in the day “”Till It Hit Dead Bottom”” so the answer to your Question is “When they hit Dead Bottom” there will be no further DOWN for it to go, the only way then will be UP, how fast or how Slow?? that Depends SOLELY on who is in CHARGE

  4. Rickie Nurse August 9, 2014 at 11:59 am

    When major coporations are face with the prospect of financial losses on scale that is more than the limit they will allow, they next move is always to cut the heads, sacking of the CEO and if necessary the entire Board of Managment.

    Barbados has to be seen in that same light and the necessary actions taken in order for this country to regain some kind of stability and the movement upwards.

    Clearly it is now a known fact now after a little too much trial and error, that this government does not have the capabilities necessary to do the required job that they claim they were able to do.

    The next move now is to fire the entire government, we cannot afford to keep bumbling along the way with the idea, or the hope that they will get it right, when that will be, we do not know, but it may be a little too late shall be our cry.


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