Sinckler presents dire economic picture

Minister of Finance Chris Sinckler has painted a gloomy picture of the economy, blaming the global economic downturn of 2008 as the root cause of the problem.

He told today’s meeting of the Social Partnership at the Hilton Barbados Resort that the crisis had placed significant pressure on a number of vitals sectors, including international business and financial services.

“It is estimated that since 2010 we have lost on average, $200 million in corporate revenue a year because of the fallout. The majority of this money was equally being paid into Barbados in foreign exchange, hard currency,” Sinckler said.

He explained that the loss of $1.4 billion in tax revenue was difficult to replace in a small economy like Barbados.

“If you are taking US$700 million out of your economy at a rate of US$100 million a year, then you begin to get the idea of how significant an impact that is. For all that it is worth, the economy of Barbados, because of its size, does not readily present alternatives for us to seize upon to get that type [of] revenue,” the minister said.

Without referencing the unpopular National Social Responsibility Levy (NSRL), the minister explained that the Freundel Stuart administration had been seeking other ways to raise revenue “on a more systematic and permanent basis”, but had been facing difficulty drawing from external sources.

Therefore, he suggested, there was little choice but to draw “from the same pool of money within this economy from the same number of persons”.

“If external factors have caused us not to be able to draw from external sources to inject revenue and foreign exchange into our economy, it means that the average Barbadian citizen and business is going to have to, for some time – one doesn’t know how long that will be – step up some more in terms of their contribution to fill that gap, except of course, if you go on the other side of the equation and you adjust expenditure,” Sinckler conceded before an audience which included Stuart, members of Cabinet, Government legislators, high ranking Government officials, captains of industry and the trade union movement, as well as a national television audience.

Among the major categories of Government expenditure, he highlighted wages and salaries of around $1.2 billion annually, subsidies and transfers of $1.1 billion and grants at $644 million.

Sinckler said in response to those who call on Government to reduce spending, that barring salary cuts, the only way to achieve this was through staff cuts.

“You have to cut bodies because ostensibly most of these agencies  . . . are populated by persons who deliver a social service to the rest of the population.”

In addition to the statutory agencies like the Queen Elizabeth Hospital, the Barbados Tourism Marketing Inc and the Sanitation Service Authority, which together attract close to $250 million from Government, Sinckler made reference to the Barbados Agricultural Management Company (BAMC), which receives some $90 million in transfers.

He said $50 million of this goes towards debt servicing because the state enterprise was in no position to service its own debt.

“In fact, if my memory serves me correctly, a year ago, the BAMC had to call on the Government at last notice to service a bond, which was taken out in 2002 and the service rate at that time was $60 million, and we were given a few weeks’ notice.

“I am also not so happy to report that the second servicing of that bond, again of about $60 million, is next February,” Sinckler revealed.

In an apparent reference to demands by the private sector and the trade unions for dialogue on the way forward for the economy, the minister said any such talks must consider the dire fiscal situation and the realities that face the administration.

“Together you are talking about $550 million by and large of the $644 million. [Looking] closely at the areas that we are talking about – health, education, sanitation, the remnants of the sugar industry . . . . I agree we have to have dialogue. We must have dialogue, but in a structured and intense way because this really is the core of Barbadian society,” he stressed.

The trade unions and the private sector last month attracted an estimated 20,000 people to a demonstration to protest against Government’s austerity budget, particularly the NSRL, which jumped from two per cent to ten per cent, and to press for talks on the economy.

11 Responses to Sinckler presents dire economic picture

  1. David Brathwaite August 12, 2017 at 5:11 am

    After nine long years of bobbing and weaving we are finally getting close to the truth. But, as Owen made clear, we still don’t know the full story because they chose to present stale information on the foreign reserves which have significantly declined since June.

    Sinkler wants to blame the 2008 financial meltdown, but other countries went through the same crisis but has made subsequent progress, including many of our Caricom neighbors. The truth is that the Dems have mismanaged the economy and cynically hid the real situation from the public in order to win an election. And this is not the first time they have done so.

    I think we need to rechristen the finance minister Chris Sinker since he has sunk the economy.

    And to top it off, the Prime Minister, as bull headed as always, chose to use his closing speech to undermine the whole consultative process by sticking to his position and casting aspersions about the unions.

    Is this not the same thing Sandi did in 1994 with the BTA issue which ended up with him losing the government?

    I, for one, wish they would just call the election so we can consign the whole lot of them to history’s dustbin.

    Reply
  2. jrsmith August 12, 2017 at 5:54 am

    At last Sinckler seems to realize he was at the wrong end of the bull ………. He have just shown to the world as to how not to be part of a useless government………………. Why now we have all these figures, but what about the (Audit General’s ) report of the missing 900 millions bds dollars which cannot be accounted for……………. Bajans please dont forget that……….

    Reply
  3. Sandra basc August 12, 2017 at 6:34 am

    Another budget speech!!!

    Reply
  4. David Hall August 12, 2017 at 7:02 am

    Mr sinckler simply put; what ever problems we may have had before 2008-Its clear tome that your inept management of our economic fortunes have made matters only worse.
    All I heard yesterday from the Minister of Finance (using CBC -Government’s propaganda machine) was: Boasting, Grandstanding, and threatening of the people of Barbados to doom them(send them home) should they demand better wages’ improvement in their standards of living, or in the management of their financial affairs.

    Reply
  5. Rechelle August 12, 2017 at 7:49 am

    @davidbrathwaite, very well articulated.

    Reply
  6. BimJim August 12, 2017 at 11:36 am

    I thought this was the same retarded ffffffrt-pot who claimed Barbados did not have a fiscal problem?

    Reply
  7. Donild Trimp August 12, 2017 at 12:10 pm

    Reality is the order of the day.

    For too long Barbadians sat on their asses and fostered the entitlement mentality.

    Everyone wanted something for nothing. It is over. No more freeness. No more entitlement. The public sector is rift with unproductive lazy people.

    Those who are not lazy will survive and this includes the private as well as the private sector.

    To all you private business people who refuse to pay your taxes, you are also the problem. If you cannot run a successful business, find something else to do.

    To all you business people who rent Gov’t space and cannot make enough money to pay rent or who blatantly refuse to pay rent, find something else to do. You are also the problem.

    The freeness is over. Done.

    Enough is enough.

    Get rid of all the dead weight in the public sector. Those people drawing a salary by false pretenses. Send them all home.

    Reply
  8. Jus me August 12, 2017 at 3:14 pm

    We all drowning.
    Clutching at the BLP straw.
    Sir.Sleepy Stuart will laugh last and longest.
    What can losing the election take from him compared to his joy,at seeing us who detest him, drown like rats, grabling,at.nothing,just a change of faces.
    Two terms in office, now he is locked into the gravy train for life.
    Politicians.NEVER lose.

    What idiots, believe Barbados, can.be fixed, like waving a BLP Wand.?

    900,000,000MISSING!!!

    No comment from.Government.

    You really believe changing the driver fix the bus,???

    Tribal Savages.

    Reply
    • David Brathwaite August 13, 2017 at 10:56 am

      Maybe changing the driver won’t fix the car, but we still have to take away the keys from the drunken idiot that crash the car and who lied about having a driver’s licence.

      Reply
  9. samantha walker August 12, 2017 at 5:30 pm

    Im so glad, it has come to the point where the sh*t is going to hit the fan…. Tax, tax, tax the poor people and not listen to their woes…. Lets see what happens bcos people can only buy what they can afford while others sit there languishing with the missing $$$$

    Cant wait to see whats going to happen next…….

    Reply
  10. A Boyce August 13, 2017 at 2:02 pm

    Well said JR Smith and David Braithwaite. It’s about time others wake up from their slumber.

    Reply

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