Bite the bullet!

IMF not a bad option for Barbados, says top CDB official

Barbadians need not fear the Washington-based International Monetary Fund (IMF) as if it were the “boogeyman”, says Director of Economics at the Caribbean Development Bank (CDB) Dr Justin Ram.

Speaking to Barbados TODAY on the sidelines of the Caribbean Tourism Organisation’s State of the Tourism Industry Conference at the Grenada Radisson Hotel, Ram today lauded Grenada’s recovery after entering into an arrangement with the Fund.

He also sought to assure that the IMF was a much-reformed organization compared to the one that was synonymous in the past with unbearable fiscal medicine, while suggesting that it was an option that should be considered by Barbados for “concessional resources”.

“People think that the IMF is some sort of boogeyman and that is entirely not the case. The IMF is a much reformed organization and some countries, as they go through their period of fiscal consolidation, would require the support of the IMF and being within some type of an IMF programme is not a bad thing,” the CDB economist said.

Echoing some of the advice tendered by former Prime Minister Owen Arthur and other leading economists, he further suggested that “being in a programme like that can make access to concessional resources easier” for a country like Barbados.

At the same time, Ram acknowledged that an IMF solution might not work for a country like Trinidad and Tobago, amid its current economic challenges.

“For some countries that may not be necessary. A country like Trinidad and Tobago can put in the proper fiscal reforms now. They do not have to go to the IMF because they have sufficient foreign exchange buffers to weather the storm,’’ Ram said.

And without making specific reference to last month’s downgrade of Barbados by international ratings agency Standard & Poor’s (S&P), who lowered the country’s long-term local currency sovereign credit rating to ‘CCC’ from ‘CCC+’, the regional economist warned that continuous downgrades were definitely not a good fiscal sign.

“We have to ensure that we have the correct rules and laws in place; that we are no longer in a situation where the debt to GDP ratio is unsustainably high, because that’s not good for anyone, because it means that credit ratings are affected negatively and that then has an effect on financial and lending institutions,” the CDB official explained.

The IMF has all but told the Freundel Stuart administration that it needs to enter into a formal programme sooner rather than later, but so far Government has been sticking to its homegrown economic stabilization and growth strategy, the most recent iteration of which has been a $542 million austerity package announced by Minister of Finance Chris Sinckler in his May 30 Budget with a view to eliminating the island’s worrying fiscal deficit, which is currently estimated at six per cent of Gross Domestic Product (GDP).

However, without passing judgment on the Budget itself, the IMF has made it clear the island’s economic problems are not over by any measure.

Following a visit to the island back in June, the Washington-based financial institution issued a very detailed assessment in which it pointed out that the economy, which registered 1.6 per cent growth in 2016 and a further two per cent acceleration in the first quarter of 2017, was likely to falter as a direct result of Sinckler’s programme.

The IMF also warned at the time that domestic inflation, which stood at 3.2 per cent at the end of last year, was likely to accelerate to 6.7 per cent by the end of 2017.

To make matters worse, the island’s foreign reserves have plummeted to well below the 12-weeks benchmark, while the national debt soars at well over 140 per cent of GDP.

With the situation as it stands, Ram further cautioned that “Barbados needs to have a proper plan for getting the fiscal books back onto a sustainable path, but also, more importantly, when I speak about debt to GDP ratio there is a nominator and a denominator and we have to tackle both of them.

“So of course we are looking at the fiscal nominator but what about the denominator on GDP, we need to ensure that we are having a growth impact,” the economist said, while stressing that “growth is important because there is still a high level of unemployment and you need to have that growth to allow companies to expand and take on more individuals”.

With the Stuart administration currently sticking to its homegrown programme and seemingly dead set against entering into any formal arrangement with the IMF, Ram acknowledged that as a sovereign country, Barbados was well within its rights to do so.

However, he suggested that Government “can also decide to go within an IMF programme and perhaps unlock concessional resources that make the [required fiscal] adjustment a lot easier.

“Really it is the choice of the Barbadian people and the Government of Barbados which path they want to choose, but I am saying to you here that being in an IMF programme is no bad thing.

“The fact remains that adjustment is still required in Barbados,” he stressed.

colvillemounsey@barbadostoday.bb

17 Responses to Bite the bullet!

  1. Carson C Cadogan October 12, 2017 at 11:28 pm

    These idiots continue to astonish me.

    Almost 40 years the country of Jamaica has been in the clutches of the IMF with no way of getting out. The IMF runs Jamaica and Jamaica has suffered as a result.

    Yet these nincompoops keep offering up the IMF as the holy grail for Barbados.

    How can people be so stupid, if it is one thing that we ought to do in life is to learn from the mistakes of others.

    Reply
    • Sunshine Sunny Shine October 13, 2017 at 9:00 am

      Why the azz your ignorant pretensive DLP government ain’t learn from the mistakes of the crooked BLP. You are such a hypocrite, Lorrrrrrrrrrrrrd.

      Reply
      • Carson C Cadogan October 13, 2017 at 1:58 pm

        I wont dignify your drivel with a comment.

        Reply
  2. Carson C Cadogan October 12, 2017 at 11:35 pm

    The Govt. of Barbados has said time and again that it has no intention of going to the IMF and with good reason. Thinking Bajans support the Govt.’s position whole heartedly.

    Justin , thanks for your advice, but no thanks!!!!

    Reply
  3. Carson C Cadogan October 12, 2017 at 11:42 pm

    HOME REMEDY

    “”In what could be music to the ears of Minister of Finance Chris Sinckler, a visiting senior economist is strongly recommending a do-it-yourself formula to resolve the island’s economic crisis.

    Former Governor of the Central Bank of Ireland Dr Patrick Honohan Thursday said Barbados could solve its problems without outside help, since no one understood the economy as well as Barbadians did.

    “You as a country, it is the country that solves its problems. It is not outsiders. The last thing you want is for somebody, either me, or somebody from Washington, to come here to say, ‘I know what you should do, you should do this, this and this, and please do it quickly’. No, that is not the way any country is going to deal with its problem. Why? Because any prescription that is coming from outside will be adopted half-heartedly at best or even at worse it could be said, ‘oh, what does he know,’” he told journalists at the Central Bank Thursday morning.

    “And it is true, only the local people understand the economy, they understand the pressure points. There are various things you can do to deal with all these problems; there are choices to be made, and choices to be made by Barbadians . . . political decision made by the people of Barbados – by the Government of Barbados in consultation with the people of Barbados – and I think that is the only way to think about this.”””

    https://www.barbadostoday.bb/2017/03/23/home-remedy/

    Reply
  4. Jennifer October 12, 2017 at 11:57 pm

    I agree.

    Reply
    • Jennifer October 13, 2017 at 1:55 pm

      This hole place has become like a disease, or a bad case of cancer. And like any disease, good pathology is needed for treatment. When Rosa Parks refused to stand for the white passenger to sit, she taught she was doing black people a favor (like most of you also do). All she was doing was sinking this people into deeper subjugation. And yes you politicians need to go to the IMF, Sell all or the most viable public entities to the highest bidder, ie gas, oil co, port, BWA etc, oh and the health care too. Because if doing this will cause so much hardship to cause this people to stand and rupture this place, instead of this placid F up mentality this people acquired then yes go. Bring it on.

      Reply
  5. janette reifer October 13, 2017 at 1:32 am

    Barbados already owes some every body
    IMF means In Misery Forever.
    So you could shut up and keep your thoughts to yourself and all who like you.

    Reply
  6. John Everatt October 13, 2017 at 7:03 am

    Well we have CCC above, one of our resident yard foul spouting the government line no less than in consecutive posts. There are those who disagree with Sinclair’s approach as that approach has been unsuccessful throughout the last years. Enough. Time to call in the IMF and get access to loans at reasonable rates. And perhaps get some professional help to get us out of this mess.

    Reply
    • Carson C Cadogan October 13, 2017 at 8:24 am

      John, in other words, Black people don’t have the ability to be able to charter rough seas.

      In your opinion They must have White help to manage this feat.

      I don’t think so low of the people of my race.

      Reply
    • Gearbox1964 October 13, 2017 at 4:41 pm

      The DLP are made up of a bunch of idiots just like you CCC…not even fit to walk a dog.

      Reply
  7. harry turnover October 13, 2017 at 7:25 am

    The HOME REMEDY has been going for 9 years C C C and we are WORST OFF than when Arthur left.
    Sinckler got up in PARLIAMENT one day and had the GALL…NO SHAME WHATSOEVER to say that a certain amount of FOREIGHN had been USED UP and he DON”T KNOW HOW IT HAPPENED…don’t know where it gone…lord have mercy….and he ‘ get way wid dat “…no getting to the bottom of that….NO NUTTEN….it was BUSINESS AS USUAL….and wunna talking bout HOME REMEDY ???….that is SINCKLER REMEDY…a REMEDY that has been FAILING FOR 9 YEARS.
    DEM don’t have a CLUE about how to RUN A GOVERNMENT…..the FACTS are there FOR EVERYBODY TO SEE.

    The POLICIES and the FOREIGN RESERVES left by the BLP are keeping BARBADOS AFLOAT up to this day…….BLAME THE BLP FOR THAT TOO.

    Reply
    • Carson C Cadogan October 13, 2017 at 8:14 am

      Harry, I know how it is with you BLP people.

      Barbados Labour Party members and supporters think in slow motion. It takes decades for you lot to recognise the greatness in the Democratic Labour Party.

      The Barbados Labour Party members and supporters vilified ERROL WALTON BARROW popularly known as Dipper Barrow. The same Tom Adams called the Errol Barrow administration a “”rudderless ship””, everything the Errol Barrow Govt. did was wrong for the BLP. The BLP even went as far as to try to lock up Dipper Barrow. Yet decades later he was hailed by the same BLP as one the greatest Prime Minister of Barbados. They even erected a STATUE in his honour just across from our Parliament. Figure that one out.

      Again, Sir Lloyd was berated by the Barbados Labour Party for his policies. The Barbados Labour Party members and supporters made mock sport of even his spectacles, the colour of his skin offended them. Yet today BLP operatives openly admit that Sir Lloyd’s policies were what was needed for Barbados at that point time. On this occasion it only took the BLP about a decade and a half to acknowledge that the Democratic Labour Party was on the right track at the time.

      Your lot will to come recognise, belatedly of course, the great work of the current Democratic Labour Party administration. And I am very sure that some future BLP administration will also erect a Statue to the right Hon. Freundel Stuart.

      It is only a matter of time. That is how the Barbados Labour Party operates. We are used to it.

      Reply
    • Gearbox1964 October 13, 2017 at 4:48 pm

      CCC…you is a wholesale poppit. Barrow was the only decent leader the DLP ever had…and he gone decades ago now. Wunna DLP voters still voting fuh Barrow, and the clowns wunna putting in office destroying de fackin country…while making their own pockets fat.

      Reply
  8. Ossie Moore October 13, 2017 at 11:49 am

    Maybe Wong Ping can ofa good advise ? Do’nt make de dam ting breaK!! Betta mek sure it’s a Sinee Blush!! Mek yuh last a long, long time! Chineese advise is ” take a lil, lil bit at a time but keep producing all night long benifits will trickle in all de time!!

    Reply
  9. Dick Tracy October 13, 2017 at 1:49 pm

    As you can tell by some of these remarks, nothing will ever change until these idiots are gone DLP/BLP. No one on either side actually cares about the citizens of Barbados or what they think, only how much they can line their pockets. Neither side will compromise. Read the manifestos from the last election, has more than two things been accomplished as promised. Just drive your Jeep up to Moon Town for a few Banks, or Oistin’s Friday. Then write the budget on a paper napkin……….Tax, tax, and spend.

    Reply
  10. Darson October 15, 2017 at 2:11 pm

    Question For all :
    If you did not know barbados had a CCC rating by way of the reports how would it affect what you do in your daily life .do you still get paid ? do you get less for your money as a result?
    Did you get more Goods when we were at ABB or any of the higher ratings ?
    IS this not what it say ? a Credit rating ? and if you are not borrowing and have no intention to ; why is this so Important .
    We have never defaulted on our Debt Payment ,to the best of my understanding and we have never begged anyone for Aid, to pay our bills in this regard to the best of my Understanding : So Down Grades ??? Cant Down Grade my love for my Country,Nor The DLP

    Reply

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