‘Slow and steady wins’
Barbadians just need to batten down and rely on the country’s slow but steady economic activity until the international financial storm comes to an end.
That was the message from Central Bank of Barbados Governor Dr DeLisle Worrell as he fielded questions from the media last week following the release of his assessment of the economy over the last year.
“We can expect to resume steady growth when the international economic circumstances permit but for the time being, because we start from a position where we are already at a very high quality of life, we can afford to wait,” he insisted.
Conceding that some other regional economies had recorded better economic growth numbers than Barbados’ 0.1 per cent, such as Guyana, Worrell said that was not the complete picture.
“Guyana is growing faster but would you prefer to be in Guyana [rather] than Barbados? Everybody else in the Caribbean is starting below Barbados and they have to catch us up,” he told the media at his tenth-floor conference room in the Tom Adams Financial Centre.
Insisting that such low growth rates were “not the new normal”, the economist said: “The international climate of uncertainty – we don’t know how long it will last. It is not going to last forever, so the normal will resume when international circumstances permit.
“That normal for us is about two to three per cent GDP [growth] and that is perfectly satisfactory.”
According to the Central Bank Governor, “We have never been a high-growth economy, but slow and steady wins this race.”
Regarding Government’s 2010 Budgetary Measures and their impact on the rate of growth, the Governor stressed that it was the global economic difficulties that had constricted the local economy.
“The main factor behind the slow growth is the international economy. We are a foreign exchange-driven economy and therefore, the pace at which the economy can expand has to depend on the foreign exchange sectors.
“That is the reason for the slowdown in growth. The countries from which we derive our foreign exchange have themselves not recovered in the way in which it was anticipated,” he reported.
Asked what the bank’s fallback position was if recessionary conditions continued for a much longer period, Worrell said: “We have to ensure that we still keep the economy stable as long as the international uncertainty persists in the international economy. That is the primary consideration.
“If you are out to sea fishing and a sudden storm arises, you have to stop fishing, batten down the hatch and ride out the storm.”