Government is putting a stop to spending more than it earns as it focuses on ‘growing’ the island’s economy.
In addition, Minister in the Ministry of Finance and Investment, Marsha Caddle has disclosed that over the next four years, government will not be taking any new capital market loans.
She made these announcements at the Annual Conference of the Institute of Chartered Accountants of Barbados (ICAB) held recently at the Lloyd Erskine Sandiford Centre.
“We are ending the period in which the government spent more than it earned, the period in which the government ran deficits and consumed the entire nation’s savings that would otherwise have financed private investments. Government consumption during that period, the decade 2008 to 2018, ‘crowded out’ private investment, but no more,” she said.
Minister Caddle stated government was helping to mobilize these savings into investments with new regulatory regimes such as the new Growth and Innovation Market, Regulatory Sandbox, and proposed regimes for crowd financing and peer to peer lending.
Noting both developed and developing nations were always under construction, she stressed that as government continued to rebuild, partnerships were required, and she thanked ICAB for the role it has played in the fiscal recovery process so far.
She also praised the social partnership for its ongoing involvement, emphasizing that the island’s adjustment has been one of the most shared in the history of fiscal adjustments anywhere in the world.
“We said from the outset, that labour would not bear the brunt of the adjustment, it is an adjustment that has seen capital and other sectors also have to share the burden,” she outlined.
The Investment Minister explained government would not be entering new loan arrangements within the next four years.
“Let me specify that this relates to capital markets and not to multilateral financing, which is as far as we can try to achieve [is] mostly concessionary financing,” she said.
President of the ICAB, Lydia McCollin lauded government’s Barbados Economic Recovery and Transformation (BERT) programme, noting it was a key success factor in the government’s ability to swiftly conclude an agreement with the International Monetary Fund for the extended funding facility.
Ms. McCollin also praised government for meeting all its targets to date under the initiative. “ICAB congratulates government for all its achievements thus far but there is much work to be done,” she said.