Businesses concerned about falling reserves

The country’s high deficit and falling foreign reserves are of “grave concern” to local businesses.

The Barbados Chamber of Commerce and Industry (BCCI) today said it was shocked at the levels of reserves, which Governor of the Central Bank of Barbados Dr DeLisle Worrell revealed yesterday was at10.3 weeks of import or $681 million as at the end of December 2016, the lowest in 14 years.

“There are two critical areas in our country that need to be urgently addressed in our opinion. The first is a reduction of the fiscal deficit, which we have been told as recent as yesterday is now at 8.2 per cent of GDP . . . . The secondary major concern to the Barbados Chamber of Commerce and Industry and to Barbadians on a whole is the level of foreign reserves.

“We were quite shocked yesterday to see the Central Bank’s report that our foreign reserves were at an extremely low level – $681 million or approximately 10.3 weeks cover . . . our foreign reserves are of grave concern to us all as Barbadians and as businesses in Barbados. We cannot allow this slide to continue,” Acting BCCI President Edward Clarke said today at the private sector grouping’s first luncheon for the year at the Hilton Barbados Resort.

During yesterday’s presentation of his 2016 economic report, Worrell had said Government had expected $250 million from various projects this year, which would help prop up the reserves.

While acknowledging this may be true, Clarke expressed skepticism, saying some of those projects had been in the pipeline for a long time.

The BCCI leader said it was necessary “for us to cut and contrive and spend whatever little we have wisely”, and he appealed to the Freundel Stuart administration to work more closely with the private sector and all Barbadians to drive down the deficit and shore up the reserves.

“[There is] no time to delay in getting the country on the right path again,” Clarke said.

2 Responses to Businesses concerned about falling reserves

  1. Hal Austin January 26, 2017 at 4:03 am

    Why should businesses be concerned about the foreign reserves position? Businesses should be making arrangements to meet their foreign currency obligations. That is why they have a treasury department.

  2. Ian January 31, 2017 at 8:23 pm

    To Minister of Education Ronald Jones
    RE: “Talk of Devaluation is wickedness”

    No Minister. Wickedness is allowing the population to suffer so that a political party would not be embarrassed by having to devaluate during its time in office. Your government’s policies of printing money (slow devaluation without the benefits of doing so) are highly irresponsible as it is in effect paying a debt, which the country will never be able to repay, with a devaluing currency.

    Minister please note even our “reliable” British tourists are complaining loudly about high prices.

    The problem:
    (1) Too many taxes. (2) Taxes are too high; 17.0% vat?? (3) Too many Government workers being paid to do no work. (4) BIM will eventually become a cash only society as many will want to avoid collecting and paying VAT in order remain competitive in business (SEE SPAIN).

    The solution:
    (1) Call in your creditors and renegotiate the government debt for pennies on the dollar with repayment to be made over a greater extended period. This is important because we will have finally come to the realization and acknowledgement that BIM cannot afford to fully repay the current outstanding loans.
    (2) Cut taxes across the board, including income, small business and corporate taxes to ease the burden of devaluation.
    (3) Devalue the dollar by at least 25%.
    (4) Win concessions from businesses so that in exchange for lower taxes they will absorb higher importation costs and not increase prices for at least two years.

    Minister, the above pro-active recommendations, not vapid meaningless words, could win you reelection.


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