Arthur accuses Chris of overkill

Former Prime Minister Owen Arthur today accused Minister of Finance Chris Sinckler of inflicting unnecessary pain on the people of Barbados.

While warning that the half-billion dollar adjustment programme effectively amounted to a devaluation of the Barbados currency, Arthur suggested that an International Monetary Fund (IMF) adjustment would have been far easier for the entire country to swallow.

He explained that based on the IMF’s Article 1V Consultation last year, Government could have been afforded the equivalent of $310 million annually over a three-year period.

However, he said the Freundel Stuart Government had chosen instead to make an adjustment of $542 million over nine months.

“The adjustment that the minister is bringing to the House is going to inflict about $250 million more pain on this economy than if the Government of Barbados had chosen to enter a programme with the International Monetary Fund,” Arthur said, while warning that Government’s alternative of seeking a homegrown remedy did not match up to the IMF solution based on the country’s “seven-fold problems”.

“For the first time in the history of the country the Government as effectively run out of entities from which to borrow,” said Arthur in further illustrating the extent of the island’s economic problems.

Added to that challenge, the ex-Prime Minister and former Minister of Finance warned that Government could not continue printing money because of the pressure it places on the island’s dwindling foreign reserves, which fell below 11 weeks of cover to under $700 million last December.

Amid Government’s “severe” debt problem which amounts to over 160 per cent of gross domestic product, Arthur zeroed in on the state’s debt to the University of the West Indies, saying the hundreds of millions now owed threatened the very survival of the educational institution.

He also pointed out that “the administration has massive arrears owed to the private sector. And, a similar debt is owed to Barbadian householders in tax returns.

“But if you have a programme with the International Monetary Fund and the fund lends money, it lends you under the condition that if you have arrears you have to clear them,” Arthur said while emphasizing that Government’s outstanding debts could have been cleared had it decided to go the IMF route.

Arthur also zeroed in on the issue of debt rescheduling, saying that with Sinckler ‘s plan to get the National Insurance Scheme and the Central Bank to give $70 million in relief, “the debt maturing next year alone will increase by over $200 million.

“And for each of the next four years the debt of Barbados will be almost $400 million each year.

“The Government of Barbados cannot rely on the Central Bank and the National Insurance just to help it with the debt,” he said.

“Government has to have a programme, agreed not just with the NIS and Central Bank, [but] with all of its creditors to take us out of the situation of an unsustainable position where trying to pay the debt over the course of the next four years will put the Government in the position where it will default on the payment of the debt and in fact may even deplete its reserves.”

Looking beyond 2017, Arthur said while Barbados “continues to function under the shadow” of the 1945 Moyne Commission Report, which had inspired the country’s leaders Grantley Adams and Errol Barrow to embark on a programme of social-democratic change because “the large mass of people of Barbados were living in situations of complete and total poverty”, the island now has “to build a new society and economy”.

He emphasized that though Adams and Barrow saw that “the role of the state has to be paternalistic, it had to give everybody a helping hand to help to lift them out of poverty . . . the state now has to find a new way enabling those who have been lifted out of poverty by the state’s actions to be able to assume more responsibility for their own welfare.”

One such responsibility, he said, should be tertiary education, recalling that in the 1990s he had brought to the House a registered education savings plan “to enable people to start to save to pay for their children’s education at the tertiary level”.

18 Responses to Arthur accuses Chris of overkill

  1. Ryan Bayne
    Ryan Bayne June 2, 2017 at 12:53 am

    That’s my minister. Owen, you’re bad to the bone.

    Reply
    • Jennifer June 2, 2017 at 7:59 am

      But Owen you does eat buttered biscuits with sinkler.

      Reply
      • Leroy June 2, 2017 at 8:50 am

        Jennifer please stop and get out the gutter,,Why attack the man when you can maybe, for Gods sake attack the msg he brought, no?

        You really understand anything the man said? or you are just hooked on the man?

        Stupse…

        I want you to tell me what you find wrong about what he said right now or shut up for good.

        Reply
  2. joan Worrell June 2, 2017 at 8:57 am

    Oh my God, is this the best that a reporter can produce? I have left school a long time ago but I doubt that a precis is meant to be a biased report. Did he listen to the same speech as I, and summarized it with only the negatives Didn’t he hear that Arthur understands the difficulty with which Sinckler is faced, trying to turn around the economy since no one model of economics can do the job? Didn’t he hear how post-recession social services can’t be maintained at the same level as pre-recession social services? Mr. Arthur’s presentation was a balanced critique of the Minister of Finance report to the House of Assembly.

    Mr. Editor , am I asking too much of you to publish a better summary of Mr. Arthur’s speech with a new caption?

    Reply
    • Leroy June 2, 2017 at 9:09 am

      Well all you said was pre-amble(difficulty,post-recession all pre-amble),, what was presented here was the crux or conclusion of the matter. Like it or lump it it is what it is, a scolding of the direction what Sinckler decided, it cannot be summarized any other way, try to keep up Joan.

      Reply
  3. joan Worrell June 2, 2017 at 9:58 am

    Leroy
    I hope you are not responding on the behalf of the Editor. Wow !! God Help us if this is the new norm for journalism. Mr. Editor, kindly ignore Leroy and do as I requested earlier.

    Reply
  4. Toyab June 2, 2017 at 10:10 am

    As an aspiring Financial Planner, I agree with the Registered Education Savings Plan. This forces parents to save for their child/ren education, while possibly gaining an income tax benefit. However, after coming out of the budget, where everything will increase, I’m not sure, if the average citizen will entertain that thought at this time, since being able to get by day to day, will be of most importance at this stage.

    Reply
  5. Ivana Cardinale June 2, 2017 at 10:15 am

    DEVALUATION is happening in our faces! but Sinckler calls it Tax on foreign exchange

    Reply
    • Annie June 4, 2017 at 11:12 am

      Agreed

      Reply
  6. joan Worrell June 2, 2017 at 10:48 am

    Richer countries than Barbados are experiencing currency devaluation. The following was copied from a CNN money report.

    Global currencies are crashing left and right.

    Russia’s ruble and Mexico’s peso recently hit all-time lows against the dollar. The currencies of Colombia, Argentina and Brazil are all down 28% or more in the past 12 months. Turkey and South Africa have also fallen by double digits over that time.

    Weak currencies are often a sign of an economic slowdown. China posted its worst growth last year in a quarter century, and Brazil is in its longest recession since the 1930s.

    Reply
    • Tito Puentez June 2, 2017 at 1:43 pm

      This may indeed be the case with other countries however, it should not excuse the mismanagement of funding from the Government of Barbados.

      Reply
    • Breadfruit. June 2, 2017 at 6:56 pm

      All of those currencies are “floated” against the USD unlike the BD$ which is fixed to the USD.

      A devaluation is bad for Barbados.

      You would not want the BD$ to be floating !

      Reply
  7. Milli Watt June 2, 2017 at 11:59 am

    when you think you got a better deal with the IMF instead of this you know you in trouble.

    Reply
  8. Saga Boy June 2, 2017 at 12:38 pm

    @Joan. I like your approach. It helps to put things in perspective. Too many on this thread is just a lot of emotionalism because they don’t like or support some people. The budget is aimed at reducing he demand for foreign currency and these measures will do just that. The government has opted to save jobs and not lay off employees. You can’t have your cake and eat it. The private sector complains that food will go up by 15 percent. Landlords in Bridgetown can reduce rents in them old buildings. They can come up with alternatives to survive. Let’s grow more food and stop wasting money on imports. Stop wasting money on new cars. Consumers have choices. Merchants continue to juck out our eyes. Let us be creative. Our Caribbean neighbors are not in a better position.

    Reply
    • Tito Puentez June 2, 2017 at 1:40 pm

      Saga Boy, unfortunately, during financially difficult times, fiscally responsible decisions like laying off employees is a necessity. This political party has run the country of Barbados into shambles. Laying off public servants and streamlining government processes is required for financial improvement. The Government of Barbados should be held more accountable by its citizens for its fiscally irresponsible and reprehensible management of funds.

      Reply
  9. tsquires June 2, 2017 at 12:57 pm

    This forum appears to be degenerating into political savagery, intuition tells me this is more intellectual than intelligence driven, ask yourself why all emphasis is given to learning misrepresented as education? Our colonial masters have done a fantastic job by taking away our intuition and replacing it with intellectuality, so
    ask yourselves why our older parents were taught to beat us out of using our left hands? Once you answer this question it will become clear how the controlling factors work. We need to take an in-depth look at our indivisible selves to find the way forward. Once again “Illiteracy in this 21st century, is not defined by being able to read and write, but by one’s ability to unlearn and to relearn”

    Reply
  10. joan Worrell June 2, 2017 at 1:10 pm

    To which forum are you referring , tsquires? If we follow your model of unlearning and relearning , then we will be discussing matters among a miniscule percentage of the population. What a pity?

    Reply
  11. Carson C Cadogan June 2, 2017 at 6:09 pm

    This is the IMF Owen wants us to go to:

    https://www.youtube.com/watch?v=YoIJPwfsbqg

    Reply

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