Senior Economic Advisor to the Government Dr Kevin Greenidge has dismissed claims by the Democratic Labour Party (DLP) that Barbadians will face austerity measures if the Barbados Labour Party (BLP) is returned to office in the January 19 general elections.
“I know of no such thing,” he declared in an interview with Barbados TODAY on Wednesday.
In fact, said Greenidge, Barbados was on a track to continued growth.
“We fixed the debt, we paid back the arrears, we fixed the reserves. The only thing remaining to be done was to continue the structural reforms that came out of the online survey we did with the public of Barbados saying what they wanted in terms of SOEs [state-owned enterprises] and the services delivered,” Dr Greenidge said.
“That kind of work had to continue to improve efficiency in the delivery of services. We started with the Transport Board. We started to fund it so that has to continue. I don’t know…there is nothing austerity about that. People just talk. There are no austerity measures that I am aware of,” added the senior economist who is on secondment to government from the International Monetary Fund (IMF).
He contended that “all the hard work and heavy-lifting” was done between 2018 and before the COVID-19 pandemic which surfaced in March 2020.
“I think the most thing you have to focus on now is getting growth. The economy has to grow. You move the impediments to growth, improve efficiency in the system,” Greenidge said.
Speaking to a large crowd at Haggatt Hall, St Michael on Sunday night when the DLP presented its full slate of candidates for the upcoming polls, former Minister of Tourism Richard Sealy claimed that “draconian” measures were planned by BLP post-election.
He also referred to the IMF December 2021 Article IV Consultation with Barbados as well as its sixth review of the economic reform programme which he said reported that Government would need an ambitious fiscal adjustment with six per cent of GDP going forward from 2022 to 2025.
“Now if the same report is complaining about the fiscal situation, in essence we are spending too much money and you’re pushing pension reform, that is only one thing it means – they want to cut pensions,” maintained Sealy, who is seeking to regain the St Michael South Central seat from BLP incumbent Marsha Caddle.
This country’s future relations with the IMF was also one of Sealy’s concerns.
“Our current IMF programme will end in October of this year, based on all of the indicators we probably will have to go in another programme and I don’t think that one is going to be as accommodating as this one. So, the simple question is, what is it you plan to do in this IMF programme that is about to be implemented?” he asked.
However, Greenidge declared that while the homegrown IMF-financed Barbados Economic Recovery and Transformation (BERT) programme must continue, questions as to whether the government wants support under the Extended Fund Facility (EFF) to go on beyond the March 2022 expiration is a political decision.
“The bottom line is that this is something that will have to be decided by the Government of Barbados once they assess the position. The government has to sit down and assess the situation and make a determination. What I know would continue is the BERT programme,” assured the senior economic advisor to the government.
“The BERT programme is our homegrown programme that was supported by this IMF support. That BERT programme has to continue because a lot of structural reforms were being done in improving efficiency and things like that, that have to be continued after being put on hold because of COVID. You may have to tweak it for the circumstances, but it has to continue,” Dr Greenidge told Barbados TODAY.
The EFF which is financing the BERT is a four-year programme, started in October 2018 and ends in March 2022, with several reviews.
“The last review is for the data…you have to assess the data on how the economy performed to the end of March. Of course, you have to wait until the data comes in. So then you probably assess it in May. Between April and May, they [IMF mission] will come and then go to the IMF Board with the report at the end of June,” Dr Greenidge explained.
He said the mission would probably do a staff visit around February “to see how things are working”.
In December 2021, the IMF Board announced that Barbados was given a further US$24 million (BDS$48 million) under the EFF to continue implementing its BERT programme.
But the IMF had cautioned that the prolonged COVID-19 pandemic, along with the twin natural disaster shocks of volcanic ashfalls from neighbouring St Vincent in April and the Category 1 hurricane Elsa in July, pose a major challenge for Barbados’ tourism-dependent economy.