Friday 6 December, 2019

Government receives nod of approval from IMF

The International Monetary Fund (IMF) has given Barbados a nod of approval for the implementation of its economic reform programme. 

The IMF’s Deputy Division Chief for the Caribbean, Bert van Selm, said international reserves, which reached a low of US$220 million or five to six weeks of import cover at the end of May 2018, had more than doubled since then.   

He also said the rapid completion of the domestic part of the debt restructuring had been very helpful in reducing economic uncertainty, and the new terms agreed with creditors had put debt on a clear downward trajectory. 

In addition, he noted the authorities have started the reform of SOEs by tightening reporting requirements and shedding excess staff.  

van Selm, along with Prime Minister Mia Mottley spoke at a press briefing at Government Headquarters on Friday.  

“All programme targets for end of March, under the Extended Fund Facility (EFF), have been met, some with wide margins. The programme target for Net International Reserves, for example, and the target for the Central Bank of Barbados’ Net Domestic Assets. The targets for the primary surplus, central government grants to SOEs, central government domestic arrears, and social spending were also met…. 

““The Barbadian authorities continue to make good progress in implementing structural benchmarks under the EFF, including those that contribute to an improved business climate, such as a new Planning and Development Act passed in January 2019, and a Sandbox regime to regulate fintech start-ups, set up in October 2018.  A new Public Financial Management Act passed in January 2019 introduced wide-ranging measures to strengthen fiscal transparency and accountability. 

The government has also introduced a system for monitoring SOE arrears on an ongoing basis, and has submitted a consolidated report on the performance of SOEs to parliament,” he stressed. 

Meanwhile, PM Mottley said Barbados’ economy is passing the right road signs on the journey to success and transformation.  

She told the media: “We have a few more road signs to pass, but as long as the people of Barbados stay the course, I assure you that we shall be successful in being able to overcome what really was a very turbulent and difficult legacy….” 

Mottley said she was grateful for the encouraging report, but stressed that the country had to stay the course.  

“I would be jubilant and ‘skinning cuffings’ when I see Barbados having to import labour; … when I see…the transformation of Carlisle Bay and Speightstown and Oistins.  I would be jubilant when we have created, as I will shortly announce, a new deal for public servants in housing in this country.  I would be jubilant when we restructure the unjust common entrance exam; when we finish restructuring the Queen Elizabeth Hospital, geriatric hospital and all of those other things.  In other words, I will be jubilant when Barbados has reached the first signs of transformation.” 

The Prime Minister stated that there were some other structural changes that had to be done, several of them being legislative.  

However, she noted that major layoffs were not coming, even though there would be some cleaning up in some state-owned enterprises (SOEs). 

The IMF official said that the staff-level agreement on completion of the first review under the EFF arrangement was subject to approval by the IMF Executive Board, which is expected to consider it in June.   

On completion of the review, about US$49 would be made available to Barbados, bringing the total disbursement to US$98 million. 

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