Nation e-Edition

IMF clash

Governor of Barbados’ Central Bank Dr DeLisle Worrell (left) and IMF managing director Christine Lagarde were in a heated exchange at a meeting in Japan. (FP)

By Dawne Parris | Sun, October 28, 2012 - 12:10 AM

CENTRAL BANK GOVERNOR Dr DeLisle Worrell has gone head-to-head with the International Monetary Fund (IMF) boss, telling her that her agency has been giving “bad advice” to countries like Barbados and, like it or lump it, devaluation is not an option for this country.

A tough-talking Worrell gave IMF managing director Christine Lagarde a blunt assessment of the IMF approach to Barbados and other small economies, saying that its model was simply wrong, at a breakfast meeting with Caribbean delegates attending the recent IMF/World Bank Annual Meetings in Japan.

A transcript of the meeting, which the SUNDAY SUN accessed, showed a vigorous debate between Worrell and Lagarde, a former French minister of finance, over the merits of devaluation, and how economic growth could be achieved.

Barbados’ currency has been pegged to the United States dollar at two to one since 1973.

Please read the full story in today’s SUNDAY SUN, or in the eNATION edition.

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Posted by Mark Walkes 1 year, 12 months ago
Too right. Devaluation should not be on the table as an option. Devalutaion does nothing in the medium to long term to the economy, and further more how man IMF driven currency devaluations have recovered?

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Posted by Tony Webster 1 year, 12 months ago
Hmmm...curiouser and curiouser... while some folks of the left hand are over-and-away, soothing the rating agencies, and (as I recall, also some arm of the IMF) and rather stridently proffering that our currency peg is "safe"…the right hand is playing hard-ball in Japan, with the Top Lady herself. We cannot of course overlook our PM's recent and highly significant "courtesy call" on Miss LaGarde herself, so one must assume that we have exhausted our stock of calming and soothing words and entreaties, and that there is nothing now to be lost or gained by calling Lagarde out-of-order, publicly! I wonder, just who holds the high cards? Why, with all such milk and honey pablum about, am I nervous? Looka, ring de bell please. Dis gine pas' joke now. RING DE BELL.

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Posted by Harold Harris 1 year, 12 months ago
Thanks, Dr. Worrell, I think it's time that Barbados speak out and let the IMF, whose leaders act as though they are/were despots, know that we do not have or had flibbertigibbets--but responsible, intellectual and adept persons in charge of our government. Just because Barbados is a small nation does not mean that we must take everything the IMF or any international financial establishment or government throws at us. The managing director of the IMF should perhaps see if she can get France, who without a doubt is in denial of the problems facing it, to put into effect some sensible policies to strengthen that country's economy. Come on Barbados' politicians, let's put aside our party-politics and rancor, and focus more on ameliorating our country's economy and moreover its international standings!

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Posted by young dennis 1 year, 12 months ago
TELL MADAME LAGRADE WE ENT DEGRADING ..WE EN TEKING HER LONG TAWK...WE ARE NO MODERN DAY SLAVES..SO GIVE JAMAICA UH CHANCE TO UPRIGHT ITSELF..WE COLLECTIVE ISLANDS, YOU SEE , USED SEMI-COLONS IN WRITING..BUT ARE NO LONGER SEMI-COLONIES IN YOUR SPEECH.

UPLIFT YOURSELF CARIBBEAN PEOPLE..

Guv Worrel lead us.

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Posted by Brerlou King 7 months, 2 weeks ago
OFF THE TOP
We have enough real life cases to prove or disprove the debate over devaluation. My personal view is it is tantamount to the economic rape, or exploitation, of a people who, ofttimes through no fault of their own, or their leaders, find themselves unable to meet their balance of payments obligations.

The evidence lies in the reality that right now the USA, and most other large economies themselves have to borrow money to pay their international debts, yet there is no call for them to devalue. We know that Spain, Greece, Iceland, N.Ireland (?), Japan, all totter on the brink of default, yet how many of them have devalued their currencies to date, may I ask?
There is, however, another alternative to devaluation by fiat, (that is changing the declared exchange rate.) A government can introduce (fiscal and monetary) measures aimed at increasing the internal inflation rate (local prices.) This would have the effect of reducing the demand for foreign goods, as well and discretionary spending. This is a two-edged sword however, as it reduces the demand from local producers as well, so it should be used as a scalpel and not as a blunt instrument.
(This is an un-researched (off the top) opinion by a BSc (Econ and Business Hons graduate.)

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