iQ: Will the Government consider the privatization of
certain state services in an effort to reduce the government’s
recurrent expenditure bill? If yes, what are some of the
sectors which the government may consider? Alternatively,
is the government considering increasing its presence in any
particular sectors of the economy where private sector interest
may be lacking?
Minister Sinckler: Note that the Government of Barbados
is currently undertaking an exercise which focuses on the
rationalization of the state services.
iQ: The country’s foreign exchange reserves have fallen
sharply in the recent months. Are there any plans to stem
the decline in reserves, particularly in the context of the fixed
exchange rate regime?
Minister Sinckler: The Government of Barbados (GOB) is
seeking to conclude negotiations with the IDB for a Fiscal
Policy Base Loan of USD50 million and the third Energy PBL
of USD25 million before the end of 2013. In addition, it is
iQ: How can the country encourage foreign currency inflows
back into the Barbados economy to buoy the level of foreign
exchange reserves?
Minister Sinckler: Given the current financial climate which
the world faces, the difficulty in attracting foreign investments
is being experienced across the globe, particularly for the
Caribbean region. However, during our thrust to transition
the Barbados economic landscape, to compete effectively
and encourage greater foreign inflows into the economy,
Barbados has to maintain and promote its resilient financial
platform backed by a strong social partnership system along
with the country’s well laid plans for development. These
were outlined in the Barbados Growth and Development
Strategy 2013-2020. Additional, some insight can be shifted
to investors originating out of non-traditional corners of the
globe (i.e Saudi Arabia, Dubai, the Middle East, etc.)
iQ: Barbados has long maintained its currency peg against
the US dollar. What are some of the conditions that must
exist for the exchange rate regime to be modified?
Minister Sinckler: Modification of the exchange rate is not an option for
Barbados.
the GOB intention to go to the international capital market,
conditions permitting, to facilitate a bond issue for further
balance of payments support and to support the overall
growth initiatives.
Over the short term, the GOB is also seeking to push smart
marketing and planning strategies to facilitate stronger
tourism demand and international business and financial
services. Greater effort will be made at finding new
tourism markets and special activities in agriculture and
manufacturing, while also pushing renewable energy to
help in the achievement of the targeted growth projections.
Construction will also be a main driver being sponsored by an
accelerated public and private sector investment program.
Minister Sinckler: Modification of the exchange rate is not an
option for Barbados.
iQ: Has the new interest rate mechanism met your
expectation or is it too soon to tell?
Minister Sinckler: Given that this policy was made effective
on 18 April, 2013 an in-depth analysis cannot be provided
at the time. However, from preliminary investigation the
interest rates on Treasury bills have seen some marginal
declines which are aligned with expectations.
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