Two pluses favour economic turnaround
The strength of Barbados’ core tourism markets and a 50 per cent drop in oil prices has “added some wind to our sails”, says economist Professor Avinash Persaud.
However, the non-resident senior fellow of the Peterson Institute for International Economics in Washington thinks the island’s “overflowing bank deposits” need to be put to work to help pull Barbados out of recession and prevent “a false dawn”.
“It should be no surprise that the same four years of economic recovery that delivered a re-election of Prime Minister David Cameron in the UK has helped to pull Barbados into positive territory. The UK represents almost 40 per cent of our long-haul tourists, so I can understand that some question why it has taken so long and ask whether this is a false dawn,” he told BARBADOS BUSINESS AUTHORITY.
“In addition to the strength in our core tourism markets, the 50 per cent drop in oil prices has added some wind to our sails. Moreover, no economy slides forever. After seven years of negative to zero growth, I think local businesses are growing in confidence that they have reached the rocky bottom of sales and demand from which they can build something on.”
Persaud, who is chairman of Intelligence Capital Limited in London, also believed local businesses may now be “cautiously turning from squirrelling away from investment at home”.
“Overflowing bank deposits tell us that there is enough cash in Barbados to finance growth if only those who have it have the confidence to put it to work here. The apparent success of Sandals will help to reduce caution further,” he said.
“Getting a cyclical economy a few years after everybody else is better than not, but a sign that we still have much to do to move Barbados to a position where it is not bringing up the rear, but once more leading from the front.”
This, he said, required “some radical thoughts about our education, telecommunications and regulatory environment”.
“They have stood us quite well in the past but are no longer fit for a modern, fast growing economy,” Persaud asserted.