Former Governor of the Central Bank of Barbados, Dr DeLisle Worrell, yesterday proposed his “prescription” for Barbados’ ailing economy.
His “medicine” of “two imperatives” to return the island to growth is to cut Government expenditure “sufficiently to eliminate the current account deficit, and to institute fundamental structural reform to ensure internationally competitive delivery of public services”.
Worrell was fired from his job last year, amidst concerns about the Central Bank’s repeated printing of money to shore up Government’s finances. He has since repeatedly declared his commitment to seeing the Barbados economy regain a strong footing.
He has set up a website, on which he presents a monthly newsletter often with recommendations for recovery of the economy.
He again expressed concern yesterday about the level of Government spending on current operations, noting it exceeded tax revenues by “almost 20 per cent”. The economist warned that after almost a decade of overspending, the Central Bank was in danger of running out of foreign reserves.
Worrell was part of a panel contributing to a webinar discussing economic solutions for Barbados. The other panellist was Trinidadian economist Marla Dukharan, with former Trinidad and Tobago minister of finance Winston Dookeran the moderator.
Worrell shared the main elements of a seven-point strategy to address the two “imperatives” which he saw as necessary for growth.
They included Government undertaking negotiations with international lending agencies like the International Monetary Fund to finance a five-year structural adjustment programme, with conditionalities on the “implementation of a comprehensive programme for public sector renewal”.
Worrell also proposed there be final approval and start of major works on all tourism projects that were to have started in 2017, as well as an aggressive programme of divestment of carefully selected public assets.
Part of the reform package was job cuts in the public sector of about 1 500 per year for three years.
Pressed by a member of the audience for answers about the adjustment needed to accommodate 4 500 unemployed public sector workers, Worrell said there could be resultant gains from those former workers who would have to be compensated.
“What is happening is that the Government’s inefficiency, and the additional taxation that has been imposed in the last year, are stifling that growth, so when you remove the NSRL [National Social Responsibility Levy], you immediately have an impulse of growth and foreign exchange,” he said.
He anticipated that with the right transition mechanisms, “there would be continuing spending impulses”. (GC)