Monday 3 August, 2020

CDB tells Barbados to stay on course with home-grown fiscal programme

Dr Justin Ram, Director of Economics at the Caribbean Development Bank (CDB)

Dr Justin Ram, Director of Economics at the Caribbean Development Bank (CDB)

Barbados is being encouraged to “stay the course” by the Caribbean Development Bank (CDB), as the regional institution has predicted one per cent growth rate for 2020. 

Given that Barbados underwent a year of the Barbados Economic Recovery and Transformation (BERT) programme, Dr Justin Ram, Director of Economics at the CDB, forecast that the island’s economy was likely to see growth in 2020. 

“In Barbados, they have only just begun this Barbados Economic Recovery and Transformation programme, BERT, and we expect once those reforms begin to kick in we will see similar types of economic activity that we have seen in Grenada,” said the CDB Director of Economics. 

“When these reforms are implemented it takes time for us to see the benefits, but that does not mean we should not stay the course. So although some of our countries are still lagging, we are saying those countries need to implement reforms now to see the benefit of those reforms in the medium term."

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The region is projected to have over four per cent growth this year, due to Guyana’s strong performance in the timber and gold industries as well as oil production. 

Ram noted that Barbados can expect to see returns to its fiscal consolidation with increased investor confidence as well a private sector investment in construction projects, namely for the hotel sector, and the Mia Mottley-administration has started to addressed the island’s infrastructure deficit. 

A strengthened fiscal framework by Government has led to a primary surplus of six per cent in 2019 in comparison to 3.5 per cent GDP in 2018. 

The CDB reported that Barbados was one of the 10 borrowing member countries to record a steep decline in the debt ratio since implementing its home-grown fiscal reform programme. The other countries are Grenada, Jamaica and St Kitts and Nevis. The island’s credit rating also improved following the successful restructuring of the Government’s external commercial debt. 

The sea could be an untapped gold mine

Ram suggested there is great potential in the blue economy for the Caribbean states as the industry was responsible for seven per cent of Jamaica’s GDP in 2017.

“We need to have the right type of research and development that goes into understanding our ocean spaces because the ocean space around us can be as high as 80 per cent or 80 times the landmass around us that we have. We are not small island developing states, we are actually big ocean developing states and if we understand what is in the ocean around us, we understand the potential in there for economic activity.

“We want our countries to engage in blue economy activity that is sustainable and that we are leaving it in good shape for our future generations. It is not about going into the blue economy and utilising it as a way that will be detrimental to future generations or economic viability but ensure that we use it sustainably,” Ram emphasized. 

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