High fuel prices hampering country's economic growth says CBB Governor
Central Bank Governor Cleviston Haynes
The Governor of Barbados’ Central Bank says high fuel prices are impinging Barbados’ economic growth, stymieing the country’s competitiveness, and eroding its foreign reserves.
Cleviston Haynes addressing the Bank’s 2019 Biogas Conference, which focused on Bio-digestion : Benefits to Barbados, pointed out that in 2008, for example, when oil prices were hovering around US$90 per barrel, the Balance of Payments felt the impact, and, as the cost of fuel imports skyrocketed, shipping costs also rose, pushing up the price of imported goods.
“These increasing costs had an inflationary effect, while our valuable foreign exchange was used to help pay for these imports. High oil prices do have ripple effects on us. Consider the savings in foreign exchange, therefore, if we were to move to renewables, harnessing the sun, wind, water, and now biological resources and waste. These savings have the potential to facilitate projects that stimulate greater economic activity and fuel growth,” he told those attending the event which was held in the Courtney Blackman Grande Salle.
“Today, the Bank is concerned about the current global uncertainty, created in part by geopolitical tensions, surrounding the price of oil. Significant increases in the price of oil now that we are stabilising the economy represent a distinct downside risk that could offset our economic recovery efforts. Much emphasis has been placed on solar energy but bio-based renewables also represent a win-win.
“They have the potential to power the economy while minimising waste and enabling us to make the best use of our resources. They generate energy. They help us to manage our carbon footprint. They boost local agriculture production by supplying organic fertilizers. And they improve our tourism value-added because the oceans and the island is cleaner,” Haynes stated.
The governor, while commending the government for accelerating the shift to a 100 per cent renewable energy strategy, suggested the moved had the potential to create more sustainable jobs, with new opportunities for engineers, technicians, technologists, investors and entrepreneurs.
He suggested the switch will also lead to new industries and will create the potential for greater investment diversification, as investors look for “green” options for pension funds.