An international economist is suggesting devaluation of the Barbados dollar as a viable option to hoist the island from the “fiscal cliff” on which it now stands.
Economist and former minister of finance in Greece, Yanis Varoufakis, said yesterday that based on his information about Barbados’ position, “there is no doubt that there is a need for fiscal and structural adjustment”.
His recommendation was to “reduce the size of public sector employment, but combine this with debt restructuring and a sensible, mild but significant devaluation which is accompanied by maybe some type of inflation targeting”.
He cautioned Barbados not to make the mistake of Greece, and countries such as Argentina and Mexico, by “trying to preserve the peg while using austerity effectively in order to take the full blast of the adjustment”.
Varoufakis’ suggestions were given in his contribution to a webinar discussing economic solutions for Barbados. Panellists were Trinidad and Tobago economist Marla Dukharan, and former governor of the Central Bank of Barbados, Dr DeLisle Worrell. The moderator was Trinidadian economist and former minister of finance Winston Dookeran. (GC)
Please read the full story in today’s Midweek Nation, or in the eNATION edition.