A $400 million fiscal adjustment programme is needed if this country is to stave off economic doom.
This was disclosed by Prime Minister Freundel Stuart, as he gave the closing address at yesterday’s one-day National Private/Public Sector Consultation on the Economy at the Hilton Barbados.
He told those gathered that this country was?? facing “serious problems of debt and deficit” and stressed that if the present challenges were to be overcome, then the cooperation of all Barbadians, in what he termed “this mighty effort”, would be required.
“The Governor of the Central Bank was very clear that we have to make a very serious adjustment if we are to eschew the prospect of economic damage being done to Barbados. He contends that we need to do about a 4.4 [per cent] adjustment and that 4.4 adjustment translates into about $400 million in the short-term. Now short and sharp interventions can lead to short and sharp responses and that is a fact which we must bear in mind. I think, therefore, that we have to continue the dialogue.
“But the reality is that we have problems. These problems are not problems of a nature, quality and kind that we can claim to be new. We’ve had these problems before, what we’re dealing with here is the gravity of the problem. And, as I said this morning, the extent to which the problems have been able to sustain themselves over as long a period as they have,” he said.
Mr. Stuart pointed out that yesterday’s meeting was part of an important consultative process so that decisions could be made to save the economy.
“We have heard interventions that have left me in no doubt that people understand where we are and that we’re going to have to take some strong corrective actions, bearing in mind always that there are vulnerable elements in the society whose protection depends on us as well,” he noted.
The Prime Minister called for creativity, perspective, and innovation rather than imitation, declaring that Government had to make decisions while the going was “good”.
“The worst thing you can do is waste a recession. The truth is that it is even more criminal to waste a period of economic buoyancy and that’s the point that I made this morning – that real beneficial fiscal consolidation in economies like ours should best be undertaken during periods of economic buoyancy. But once things are going well?? we forget all of the structural challenges and we have a good time, and as soon as difficulties surface, we press the panic button,” he observed.
Expressing confidence that the country would surmount the present difficulties, the Prime Minister, however, warned that once buoyancy returned to the economy, “some serious structural changes” had to take place in Barbados.
Mr. Stuart promised that Government would continue its consultative programme,?? as broadly and as widely as possible “while there was time to do so, and while circumstances allowed”, so that a national consensus on the way forward could be crystallised and?? the necessary buy-in garnered for the sacrifices that would have to be made in the foreseeable future.