BRIDGETOWN, Barbados, Thursday March 16, 2017 – The International Monetary Fund is not on the agenda of the Barbados Government, an adamant Prime Minister Freundel Stuart has declared.
On the heels of warnings from his predecessor Owen Arthur that the stressed economy urgently needs a helping hand from the Washington-based financial institution to stave off a $3.3 billion debt crisis, Stuart dispelled the notion that the island was so poorly off that it had no other option.
He made it clear that if and when the island had to go that route, he would not cower.
“I have heard all of the talk in Barbados; I heard the member for St Peter say [Tuesday] that we should go into an IMF programme and so on. I want to make it very clear, I spoke to the Chamber of Commerce in January, and I said there will be no panicky resort to the IMF by the present Government of Barbados,” Stuart said yesterday in his contribution to the debate on the Estimates and Expenditures for 2017/2018.
“If the stage is ever reached where it has to happen, as with the case of [then Prime Minister] Tom Adams, as with the case of [then Prime Minister Erskine] Sandiford, this Prime Minister will have the courage to look the country in the face and say, ‘look, here is what the facts are, here is what I think we have to do for the good of this country’. But that is not an agenda item of this government at this stage.”
Arthur had argued that the island could not afford to turn its back on the opportunity to have its debt restructured under a Fund programme, pointing out that it could get as much as $750 million at one per cent interest.
The noted economist also proposed that the island end its currency peg to the United States dollar, since it was doing more harm than good.
“Our currency is pegged to the United States dollar that is not going down in value but is going up in value, and it is making Barbadian exports more expensive – not because we want them to be more expensive but because of how our currency is pegged. Our currency is also making it more expensive for investors coming from the United Kingdom and Germany to be able to make investments in Barbados,” Arthur warned.
But again rejecting the advice of the former leader, Stuart insisted the $2 to $1 peg had served the country well since 1975.
“It has made our business transactions certain; our business people have been able to rely on it, our citizens have been able to rely on it. It is true that the US dollar has been strengthening against other currencies in recent times, but that has happened before and that can change as well,” he said.
Prime Minister Stuart also went on to defend his Government’s printing of money, saying while it would not continue forever, there was too much at stake to abruptly stop.
“These things are not new. They are not desirable in the context of our overall macroeconomic aspirations, but sometimes they become necessary. And you only have to ask yourselves, ‘if they are not done, what the consequences will be for the society?’” he said.