UPP willing to consider IMF borrowing relationship

Two weeks of economic consultations between Government and the International Monetary Fund (IMF) ended today with officials mum on the details of the closed-door Article 1V discussions.

However, were this island’s economic management placed in the hands of the United Progressive Party (UPP), a borrowing relationship with the Washington-based lending institution would not be out of the question at this delicate stage.

With the economy currently said to be limping along under the weight of a $300 million deficit, a national debt of 144 per cent of gross domestic product, and less than adequate foreign reserves of below $600 million, or eight weeks of import cover, UPP Leader Lynette Eastmond said today her party was willing to “review all options for borrowing, including [going] to the IMF”.

However, even with the IMF warning that the reserves position places the Barbados dollar in great peril, the UPP is strongly refuting the idea of a devaluation of the Barbadian dollar, which is presently pegged two to one against the United States currency.

“The IMF is saying that they are not ruling out a devaluation because they must say that, but we are not ruling it in,” Eastmond said during the launch of the first in a series of mini-manifestos for the upcoming general election, constitutionally due by the middle of next year.

So far both the ruling Democratic Labour Party (DLP) and the main Opposition Barbados Labour Party (BLP) have been tiptoeing around the IMF discussion, with the BLP only willing to commit itself at this stage to implementing an IMF modelled homegrown programme.

Minister of Finance Chris Sinckler on the other hand continues to vigorously defend his own brand of homegrown medicine, even with the majority of indicators pointing in the wrong direction.

However, it remains to be seen how the IMF will respond to his latest Barbados Sustainable Recovery Programme, which is due to be laid in Parliament shortly, detailing Government’s latest fiscal consolidation targets.

At the end of its last Article 1V consultation back in June, the IMF team, led by Judith Gold, said it stood “ready to assist the Government of Barbados, including through continued policy dialogue and technical assistance”, while making it clear that the island’s economic problems were not over by any measure.

“Growth in 2017 is projected to slow to less than one per cent, reflecting the fiscal consolidation efforts introduced in the FY2017/18 Budget,” the IMF team had warned then, while it also cautioned that domestic inflation, which stood at 3.2 per at the end of last year, was likely to accelerate to 6.7 per cent by the end of 2017.

With those prophesies essentially coming through, Gold and her team are headed back to Washington to complete their latest assessment, having met with Sinckler, Acting Central Bank Governor Cleviston Haynes and other key Government officials, as well as senior representatives of the private sector, the trade union movement, including the Congress of Trade Unions and Staff Associations of Barbados (CTUSAB), Opposition Leader Mia Mottley and civil society.

The team is due to submit its full report by January.

9 Responses to UPP willing to consider IMF borrowing relationship

  1. Antonio Franklyn
    Antonio Franklyn November 21, 2017 at 11:25 pm

    LEGALIZE….WEED…AND ITS BYPRODUCTS…..

    Reply
  2. Jack Hanma
    Jack Hanma November 22, 2017 at 12:22 am

    Upp looking to line their pockets already and ain’t even get a seat yet

    Reply
  3. Carson C Cadogan November 22, 2017 at 4:03 am

    This woman has to be mad.

    The IMF decimated Jamaica and she wants the same to happen to Barbados. The IMF has done more damage to Jamaica than a serious hurricane.

    Reply
  4. Sheron Inniss November 22, 2017 at 6:50 am

    Greville up the ting. Bye bye Ms Eastmond.

    Reply
  5. Greengiant November 22, 2017 at 7:37 am

    @Sheron Inniss: Thanks, I honestly don’t know why Solutions Barbados don’t get on with it. Elections are won by meeting the people in shops, in the villages, and other mass assembly areas. We are not totally at the stage where elections will be won via internet publishing.

    Lynette and the B L P don’t understand, “it’s either bitter medicine now at the beginning or at the end”. Either endure the challenges of economic recovery, or the challenges of dept repayment and further restructuring for decades. Restructuring continuously usually ends in devaluation. History has proven that.

    Reply
  6. Ernesta Catlyn November 22, 2017 at 9:22 am

    Ms. Eastman is clearly not the type of politician with which we have become accustomed. She, however, is simply putting in words what all the parties intend to do or should I say will have no choice but to do.

    She does not impress me in any way, though.

    Reply
  7. milli watt November 22, 2017 at 9:44 am

    Lynette Eastmond is correct………….can’t trust this crowd to do buggar all (thought I would start using that term). This crowd got the money Bds currency in the bank. US currency offshore and want to know how this going get solved. well by inviting the white man to do what he does best and that is run an economy.

    Reply
  8. milli watt November 22, 2017 at 9:45 am

    if not here then the mottley crew, fruns you pick um it has to be done so start dropping the excess weight and get in shape for next year.

    Reply
  9. Ronald Callender November 26, 2017 at 7:17 pm

    Dear Barbadian Politicians,

    Sometimes in life, individuals have to stop and take a hard look at their lifestyle when they’re hemorrhaging financially. In many cases, these people have to get financial counseling or go bankrupt. Others realize they have bite the proverbial bullet, and cut their credit cards, which got them into trouble in the first place.

    Once the plastic have been shredded, the next step is to come up with a monthly budget that should include their creditors. At the end of the day, income should equal expenditures. At times getting another job is the solution to keep one’s financial head above the water.

    In many cases, the way back to financial health for many people takes years.

    Running a government calls for the same skills an individual needs to manage a household from one person to many people. The main difference between a government and an individual is scale and scope. Nevertheless, both sides have to go through the same basics of sound financial management.

    Governments in Barbados have focused on jobs mostly through two means: sugar cane and tourism. When sugar cane ceased being king, the country became primarily a “one-trick” pony: tourism. This industry is hyper vulnerable, because it’s subject to the whims and fancies of tourists. As a result, the government always have to make “not-in-the-best-interest-of-Barbados” deals to ensure the industry survives.

    I’m not advocating the successive government shouldn’t have pursued tourism, what I assert is that lack of foresight caused different governments over the years to drop the proverbial ball, and rather than step up buy local as a value added for the tourism industry, they didn’t.

    Additionally, rather than increase agriculture and farming, governments allowed premium arable land to go for housing development. Who benefited the most here? The financial institutions that held the mortgages.

    Another area that was woefully lacking in Barbados fifty years ago, and still begs for any government to release it for the good of country is research and development (R & D). Every time I go to a supermarket where I live, I see what other countries are doing with fruits and vegetable we have in Barbados, my heart breaks.

    Today, a strong and vibrant CARICOM would be able to compete with highly developed countries with fruits and vegetable, especially in the area of organic produce and better tasting products. For example, an item is sold here for bay leaves. When it’s compared to Barbadian bay leaves, ours is in another league by itself.

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    Austerity program throughout the economy, including businesses, is one of the doors Barbadians must pass through. If businesses don’t like it, they can close down or show why they should be exempted or hurt to the extent that their future is tenable.

    The government should be mindful that if a company closes, it would create room for another company or local entrepreneurs to fill the void. Companies are like stars. They born, show their brilliance, and then die. The same for companies which aren’t nimble enough to absorb the shock from different economic periods.

    Where are Kodak, Blockbuster, Standard Oil, Eastern Airlines, Enron, Woolworth, Pan Am, etc. today? The game is bigger than any individual player in any sector or walk of life.

    Be mindful that any time Barbados makes a bad deal the people suffer.

    In the 1960s Americans headed most of their companies in Canada. Canadians didn’t like it, and in a matter of years, Canadians headed American companies in Canada.

    In Barbados, the government needs to do the same thing by approaching foreign companies and let them know the government has a “what’s in the best interest of Barbados” policy.

    Nothing ventured nothing gained. If we keep on doing the same thing the same way while expecting a different result, we are in for a rude awakening. We are either progressing or regressing, and the outside world is getting leaner and leaner.

    Barbadian entrepreneurship needs to be unleashed. Much gains to be made in this area, but only if we choose to live up to the independence, in the fullest sense, we acquired on November 30, 1966.

    The only thing worse than being on the wrong road is to be on it for one more kilometer or mile.

    Reply

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