Worrell not budging
FORMER GOVERNOR of the Central Bank, Dr DeLisle Worrell, is sticking to his guns that Government should send home 1 500 workers if it wants to fix the country’s economic problems.
He also suggested that Prime Minister Mia Mottley was badly advised in her decision to suspend payments on debts owed to external commercial creditors.
However, Minister in the Ministry of Economic Affairs, Marsha Caddle, and regional economist, Trinidadian Marla Dukharan, are not seeing it his way.
Worrell commented, via a recorded message yesterday, on the Government’s announcement of debt restructuring during Sunday Brasstacks on Starcom Network.
“The most precious asset the Government of Barbados possesses in facing the current foreign exchange crisis are its long-term exchange rate peg and its unblemished record of servicing its debt in full and on time,” he said on the radio call-in programme.
“Government must preserve these assets at all costs. The key to doing so, as I have publicly advocated, is to cut the public service by approximately 1 500 jobs and to reduce subsidies to Government-owned entities to ten per cent in the first instance,” he added.
Worrell said if this was done, Government would be able to meet all its debt obligations, relieve pressure on the foreign exchange market and balance its fiscal current account.
He said it was on that basis the country should approach the International Monetary Fund (IMF).
However, Caddle, an economist, downplayed Worrell’s claims, arguing workers could no longer be at the forefront of economic reforms.
“I think we have to start getting creative with this economy and determine that we can no longer have labour and workers being at the frontline of an adjustment,” Caddle said.
“It is always easy to make that determination that you must send home a certain number of workers, but I think that we have seen there are other avenues and that we do have to get creative,” she added.
Meanwhile, Dukharan, who was also on Brasstacks, said the former Governor’s assessment was somewhat off the mark.
“He touched on reducing Government expenditure on wages, salaries and subsidies,” she said. “But to be fair, as the Prime Minister has outlined, the amount of money paid in debt servicing was even higher than wages and salaries and also subsidies.
“So I can’t see how you can fix your fiscal deficit, which Governor Worrell has said is a priority, and not adjust the debt servicing cost.”
In an address following last Friday’s Social Partnership meeting, Mottley announced Government would be suspending payment on debts owed to external commercial creditors, and also ask domestic creditors to roll
over principal maturities until Government reached a restructuring agreement.
She also said the IMF would be visiting the island tomorrow for discussions. (AD)