IF THE PRICE of liberty is eternal vigilance, then to be silent is often to jeopardise that liberty.
Examples abound of silence in respect of our public affairs, but we want to focus on statements by two leading economists that have gone unchallenged.
In March, Ryan Straughn, the immediate past president of the Barbados Economics Society (BES), said the greatest threat to Barbados’ foreign reserves is the present policies of the Central Bank of Barbados, and used the International Monetary Fund’s (IMF) Article IV Consultation Report released a few days earlier to support his analysis.
Speaking at the tenth People’s Assembly at Graydon Sealy Secondary School, St Michael, Straughn showed how Barbados’ present fiscal crisis occurred, and how the Central Bank has contributed to this problem by printing money to support Government’s spending.
He then used that IMF report to explain how the Central Bank has not been doing its job, and how its policies have caused Barbados’ currency to be seriously threatened.
He explained that the maintenance of the two-to-one peg of the Barbados dollar to the United States currency depends on fiscal policy that does not allow large deficits to accumulate, as has consistently occurred each fiscal year since 2008.
And Straughn said the IMF views the Central Bank’s failure in this matter so seriously that that report, unlike other similar reports through the years, made specific reference to the bank.
He said the IMF is saying that the Central Bank’s printing of money for Government spending is putting pressure on the reserves and the bank’s ability to defend the currency.
And the Central Bank has admitted this.
?Then last week, current BES president Jeremy Stephen warned that if Government does not stop its heavy reliance on short-term debt it would be forced to seek “budgetary support” from the IMF or go the privatisation route “before this fiscal year is up”.
Stephen said there were clear signs that Government’s finances were in a poor state, largely due to heavy reliance on expensive short-term financing.
Addressing an Association of Chartered Certified Accountants voluntary members network at the Barbados Hilton, Stephen said it appeared the Central Bank was now the only major financial institution willing to feed the Government’s big appetite for short-term funding by buying Treasury bills.
In most countries when leading economists express such strong concerns and the policies being pursued, most governments would respond publicly.
But not here.
Here, the thinking seems to be that if one ignores what someone says, the issue would disappear. Or, by ignoring the statements it would suggest what is being said can be dismissed as it’s not even worth commenting on.
We disagree.
These two damning analyses, made with supporting facts and figures, demands an official response.
