BPSA: Need for more foreign exchange
Until Barbados’ traded sectors – led by tourism and international business – start to earn more foreign exchange, the private sector’s ability to recover will be challenged.
This was one of the points raised last week as the Barbados Private Sector Association (BPSA) reacted to the Central Bank’s latest economic review.
BPSA chairman Alex McDonald said while Central Bank Governor Dr DeLisle Worrell was speaking about the possibility of economic growth from next year, Government’s “deliberate strategy” to suppress demand would challenge this.
“You cannot be doing two things – growing and suppressing demand. You either do one or the other. . . in an economy where demand is being choked off through taxation and fiscal measures,” he said.
BPSA independent director Anthony King said Government’s approach was “a pragmatic reality” and that if demand involved the use of foreign exchange there would be efforts to suppress the use of foreign exchange until this key category of earnings improved.
“There has got to be changes that will cause the foreign exchange earnings to go up.
The real fuel for us in the foreign exchange is tourism earnings. . .But those things have got to come through and marketing of the island has got to get back to a semblance of where it use to be. We have not been marketing the island as much as before,” he added.
“I think it is important to realise that we can exchange money among ourselves but we need this foreign exchange to come in. Government, they have to have further austerity if indeed they are trying to more and more make ends meet and what that means is that while that is necessary. . . it does in fact decrease demand locally because then. . .the capacity to spend locally has gone down.
“So businesses are likely to sell less, but I think it’s a necessary step in Government addressing its fiscal problems.” (SC)