iQ: In retrospect, do you think that the economic policies
adopted over the past few years were optimal in the context of
the global economic conditions?
Minister Sinckler: In 2010, the Government of Barbados
crafted a Medium Term Fiscal Strategy that was designed
to transition Barbados’ current fiscal position to one that
is sustainable and provides a framework for targeted
policy interventions and strategies over a rolling five year
planning horizon. The strategic goals of the MTFS were also
aligned with the Government’s Medium Term Economic
Strategy. Together these two planning documents provide
an overarching policy framework for sustainable economic
growth through encouraging strong foreign exchange
earnings, increased productivity and competitiveness, the
creation of private sector jobs and greater social advancement.
The broad strategies include: Expenditure, Revenue and Debt
Management; Public-Private Sector Partnerships; Divestment
Policy; Public Enterprise Reform; Incomes and Prices Policy
and Financing and Management PSIPs.
iQ: In your view, what is the way forward for the Barbados
economy?
Minister Sinckler: The swift and urgent implementation of
the goals, objectives and strategies outlined in the Mediumterm Growth and Development Strategy 2013-2020 is vital
to the realization of positive growth levels. The envisaged
positive growth levels for Barbados hinges however on
the return to favorable growth within the global economy,
particularly the USA and Euro-zone area to which Barbados
economy is in- extrinsically linked.
In 2011, some progress was realised: real GDP grew by close
to 1%, tax revenues improved by nearly 10.0% and the deficit,
relative to GDP, was almost cut in half.
Unfortunately, the modest improvements that was realised
in 2010 and 2011 didn’t produce the momentum necessary to
propel the economy as recovery in the US was sluggish and
new fiscal crises emerged across the Euro-zone economies.
As a result, by 2012/13 fiscal year, Barbados’s GDP growth had
stalled. The targets under the MTFS, which had been crafted
two years earlier against much more optimistic international
forecasts, were now unmanageable given the prevailing
economic conditions and, despite continued efforts, the fiscal
deficit widened beyond expected targets.
In retrospect, the Medium Term Development Strategy
and Medium Term Fiscal Strategy was not only a proactive
stance taken by the Barbados government to navigate this
economy out of the global crisis, with particular emphasis
given to recovery and adjustment, but more importantly,
the MTFS met it targets up to 2011/2012 fiscal year. The
slower than anticipated growth in Barbados’s major trading
partners, USA and Euro zone led to some weakening in
certain macroeconomic indicators during 2012/13. However,
in an effort to stem any further economic declines whilst
facilitating growth and development, a new Medium Term
Growth and Development Strategy is currently being
implemented with haste.
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