Barbados finance minister dismisses talk of IMF meeting

BRIDGETOWN, Barbados, Thursday May 30, 2013 – The Barbados government has described as “malicious and unfounded” reports that the island has held talks with the International Monetary Fund (IMF).

Finance and Economic Affairs Minister Chris Sinckler has also rubbished suggestions that Barbados would be devaluing its local currency which now trades at 50 cents to one United States dollar.

“There will be no IMF programme – not now, not June, not this year, and if we act as we are supposed to act, not in the foreseeable future and absolutely no devaluation of the Barbados dollar,’ Sinckler told members of the Barbados Chamber of Commerce and Industry’s (BCCI).

He said there were people in the country bent on spreading panic and have in the past made statements indicating that the Freundel Stuart government would be retrenching as many as 6,000 public servants because of the financial situation.

“There has been no such meeting that took place and no such discussions have been taking place in my ministry,” he said, adding that because of the global economic challenges “we made choices we believe to be correct.

“Yes, domestic demand has fallen because there is less disposable income, but we know that given what we faced in 2010 and now 2013, that if we do not anchor our macroeconomic policy response around the foreign exchange function in this economy, we will run out of options when those reserves are dissipated.

“It is then our economy will collapse, rendering us a virtual economic colony of the international financial institutions such as the IMF,” he said. 

“When those reserves are dissipated it is then the economy will collapse. We have adequate levels of reserves even despite of the fall off; we are still on the field of play and have a definite chance of winning.”

The Finance and Economic Minister however suggested that Barbadians must be prepared to expand their businesses since “we can’t make our best living feeding off of each other.

“We need to sell our services and goods to the world. The global economy has changed rapidly – we enjoyed a period of boom that is over now and it is not coming back. 

“Investor confidence has now come to a stop, investments are now more circumspect, tourist are less capable to spend and more demanding for value for money. If we want to compete, knowing the realities of our lack of price competitiveness, we have to invest more heavily in the quality of our service and products,” he said.

Last week, Prime Minister Stuart said his government will host a national consultation on the local economy on June 28 and appealed to the various stakeholders, including the private sector and the trade union movement, to attend so as to ensure it success.

Last month, the Central Bank of Barbados announced that the local economy had contracted by 0.4 per cent in the first three months of 2013 and urged the authorities to put “back on track” the fiscal consolidation strategy as well as a new medium term adjustment strategy to turn around the island’s economic fortunes.

In its review of the Barbados economic performance fore the first quarter of this year, the Central bank said that on current trends there may be no real increase in the contribution to gross domestic product (GDP) from the tourism or international business sectors in 2013.

It said that the forecasts for the rest of the economy are no better, with overall GDP expected to be virtually flat.

Sinckler, speaking on the topic “Barbados First” told the private sector that the losers in the last general elections should get over their defeat and allow the government to run the country.

“All of us have likes and dislikes, whom we want and whom we prefer not to want but it is the people of Barbados who decide who will form the government. Let me make it clear, this government is not fighting an election over again until the time is right.

“Those who are suffering from post-election stress syndrome – my advice to you – get over it and move on. We have serious issues to deal with,” he added.

He said “at no time and under no circumstances have I or any member of this administration withheld vital information from the public of Barbados on the state of the economy, nor will it happen”. (CMC) Click here to receive free news bulletins via email from Caribbean360. (View sample)