Minister of Finance Chris Sinckler yesterday drew attention to Barbados’ strong foreign exchange position as the key achievement to hold the country together in the current economic downturn.
Speaking to a large audience of top private sector bosses yesterday at the Barbados Chamber of Commerce & Industry’s (BCCI) 187th annual general meeting at Hilton Barbados, Sinckler reminded them that it was Government’s insistence on protecting the island’s vital foreign reserves that had also protected their interests and prevented the economy from collapsing.
Saying Government was mindful of what happened in 1991 when there was a foreign exchange crisis, the Finance Minister said in the face of the world’s worst recession “we moved swiftly to protect our international reserves from a potentially dangerous situation”.
To the executives, Sinckler said: “That we have adequate levels of reserves despite a falloff in our international earning capacity means that we are still on the field of play and with a definite chance of winning.
“It means that Mr John Williams [head of the Barbados Private Sector Association], my very good friend, can go to his local bankers or the Central Bank and purchase foreign exchange to buy all of those wonderful imported goods he so dearly loves to sell to visitors and locals.
“It means that my very good friend Mr Andrew Bynoe – next week he is going to be able to pay for the shipment of imported whole milk or perhaps seasoned chicken wings . . . . Even you, Mr President [Lalu Vaswani], must admit that without those precious reserves to do what you want to do, business at Satjay House will come to a screeching halt. Nobody in here wants that and this Government does not want it either.”
And while Government’s policies had a negative effect on the fiscal deficit and tightened domestic demand for goods and services, Sinckler explained: “We have been able to conserve, save and otherwise successfully manage the net international reserves to the extent where we have been consistently at least six weeks above the recommended minimum international standard and that is a credit to our resolve in this regard.”
In a stark outline of the economic situation, Sinckler told the BCCI members: “If we do not anchor our general macro-economic policy around the foreign exchange function in this economy then we definitely will run out of options when those reserves are dissipated; it is then that our economy will collapse and we will become a virtual economic colony of the international financial institutions such as the International Monetary Fund.
