BEHIND THE HEADLINES: A region looks on with interest
Barbados’ economic plight is worrying many of its Caribbean neighbours. That indication came from Grenada’s Prime Minister, Dr Keith Mitchell.
“The situation there is one that concerns all Barbadians and certainly the region,” Mitchell told BARBADOS BUSINESS AUTHORITY in New York.
“You know Barbados has historically one of the most thriving economies in the region and it was helpful when it often sent the right message about the Caribbean economies and where we are heading as far as the quality of life. Therefore, anything that happens to Barbados must concern every single Caribbean country.”
Mitchell, whose wife is a Barbadian whom he met while he was a student at the University of the West Indies’ Cave Hill campus, was careful not to comment on the Freundel Stuart administration’s economic policy, and he sidestepped making any direct comment on the current hot-button debate about Barbados possibly turning to the International Monetary Fund for help.
However, he suggested that the experiences of Barbados’ neighbours had shown that turning to an IMF programme wasn’t the end of the world.
“As you know, St. Kitts-Nevis went through a programme,” he pointed out. “Jamaica is now in a programme and I expect other countries are also going to look seriously at alternatives there. Trinidad and Tobago may not look at it but almost every other country will be looking at some form of structural adjustment programme within the next few years. That is something that concerns almost every single Caribbean country and we are generally working together on this.”
And that’s when Mitchell, hinting at his wife’s interest in Barbados’ economic fortunes, expressed his concern about Barbados’ economic performance.
Turning to Grenada’s economic troubles, the Prime Minister explained it was already working with the IMF to restructure its massive debt.
“Grenada is involved in a structural adjustment program with the IMF and we have been working with our debt bond holders for debt relief,” he explained. “We will continue to highlight that major issue because it is so important for dealing with economic growth if we are to be able to invest in the human factor. We must have the room, our own space to do so and the debt as it stands now makes it virtually impossible.”
Mitchell is hoping for a debt relief agreement of about 50 per cent which would allow the debt-to-GDP ratio to fall to “less than 100 per cent. That’s what we are shooting for.”
Grenada’s debt amounted to about $1.6 billion, said the Prime Minister. Any reduction would be spread over a 10-year period, Mitchell pointed out. “If that (reduction) happens it could easily be about 50-60 per cent which, of course is not bad.”
Indeed, it would be downright “reasonable,” he argued. His assessment of the way forward for the Caribbean and the IMF’s role in helping countries escape from under their mountain of debt came at a time of a rising calls in Barbados for a change in its economic strategy, including going to the Fund for assistance.
For instance, Tracey Shuffler, President of the Barbados Chamber of Commerce and Industry, was sceptical that the Stuart Administration’s strategy would bring positive results. So far, the 19-month adjustment programme hadn’t achieved its targets of boosting revenue and reducing expenditure, she said.
She expressed the business community’s disappointment that a year after the private sector had proposed opening talks with the Fund, the recommendation “so far has been roundly rejected”.
Shuffler wasn’t alone. Ryan Straughn, a former president of the Barbados Economic Society, sees the need for “urgent” action “in order to build some credibility and help to restore some confidence in the economy”.
Dr Clyde Mascoll, a former Cabinet minister who once led the Democratic Labour Party when it was in the Opposition at the turn of the 21st century, couldn’t agree more.
As he saw it, Barbados was in a state of “malaise” and “contraction” and he called on its government to “change direction because of in its current course, nothing is getting better”.
That’s a far cry from the situation in Grenada. Mitchell said that after years of economic stagnation the country had managed to put its economy on to a growth path.
“We have one of the highest growth rates in years. It’s over three per cent,” said the Prime Minister. “It means we are going forward. This year we are seeing signs of growth in the economy, growth in the construction sector, agriculture, fisheries and tourism.”
For its part, Barbados is forecasting economic stagnation.