Central Bank of Barbados governor Dr Delisle Worrell is being accused of talking out of both sides of his mouth when it comes to what’s best for Barbados’ economy.
Barbados Labour Party (BLP) leader Owen Arthur said yesterday that while Worrell had told the International Monetary Fund’s (IMF) managing director Christine Lagarde that the agency’s model was wrong, he supported it here in Barbados in the form of Government’s Medium-Term Fiscal Policy.
“The IMF model which Dr Worrell told the IMF is wrong, but which he has been telling the Barbados public is right, is one that seeks to cure economic problems by reducing spending through means that take money out of the people’s pockets through increased taxes, fees and wage freezes and the like,” Arthur said during his address at the BLP’s 74th annual conference yesterday.
“We are constantly being assured by the Central Bank that these policies were working. Indeed, the Governor even recently assured the public that there was no alternative to the policies that the Government was pursuing.”
It was at an October 14, 2012 breakfast meeting, during the recent IMF/World Bank Annual Meetings in Japan, that Worrell told Lagarde the IMF persistently and consistently gave bad advice on policy options because its model was wrong and needed to be changed.
“For the Governor of the Central Bank to give the IMF lectures on how wrong their policies have been in Barbados when he has been so enthusiastic a supporter of them in public in Barbados is to rub salt in the wound,” Arthur said, insisting that an IMF-type model did not have what it took to get the economy back on track.
Arthur gave the Government a failing grade for its management of the economy, pointing to a six per cent decline in the economy since 2007, the last year the BLP held office; poverty rising to 19.7 per cent in 2010; the price of fuel and electricity climbing by 62 per cent while food prices went 35 per cent higher; and unemployment rising to 12.5 per cent up to June 2012 – up from 6.7 per cent in December 2007.
He said the concept of junk applied not only to the downgrade which Standard & Poor’s gave to Barbados’ credit rating earlier this year, but to every aspect of Government’s policies and the economic performance.
“The bite has largely been felt in the pocketbooks of Barbadians of every class. Prices have risen by over 30 per cent since 2007 when incomes of Barbadians, especially in the public sector, have been largely frozen,” he said.
Tourism, Barbados’ largest foreign exchange earning sector, has also been affected, Arthur said, with arrivals in August declining by 13.6 per cent, a 6.4 per cent drop in September, and an 11.1 per cent decrease for the first 19 days of October – all of which could contribute to arrivals falling by nine per cent for all of 2012.
“Over the past four years, the industry has lost some 30 hotels, apartments and guest houses, amounting to the loss of 1 300 rooms. While all of this has been happening, the Barbados Tourism Authority has been starved of funds,” Arthur charged.
“Indeed, at this moment of crisis the BTA finds itself unable to pay its creditors or to mount new programmes to bring our industry back from the brink while the Government pumps thousands of dollars into a political football tournament,” he added, referring to the $600 000 spent on the David Thompson Memorial Football Classic.
Arthur said a BLP government would address another Democratic Labour Party failing – losing out on 2 700 jobs and US$1 billion in new income and investment in the international business sector because of slow response to applications and failure to pass new legislation or amendments to meet the needs of the market.
The former Prime Minister proposed a re-engineering of Government operations on an e-government platform to flatten Government’s hierarchical structure and allow for simultaneous processing by different departments and speed up decision making; and an ongoing review of commercial law and regulations by a public/private sector Commercial Law Commission. (DP)
