Use IMF model as tool in homegrown strategy
Economist, Dr Clyde Mascoll.
Economist Dr. Clyde Mascoll believes a homegrown strategy can pull the country out of its economic slump, using models used by the International Monetary Fund (IMF).
During a presentation at the University of the West Indies, Cave Hill campus on Friday on the topic Which Way Out? Homegrown or IMF Plan?, Dr. Mascoll said while he was in support of a homegrown economic strategy he would not completely discount what IMF support could do for the economy as well.
“I am suggesting that the IMF model can be used as a model to measure economic progress,” he said.
He said for too long the current administration has been focusing on the fiscal deficit and implementing policies, most times in the form of increased taxation, to address it. Further to that, Dr. Mascoll added, Government had gone “completely downhill” with fiscal management and a homegrown strategy, supported by an IMF model could see a major turnaround in the economy.
“Going forward I am hoping that we can have a homegrown economic plan that can work. You cannot have a fiscal strategy alone because there are other agents in the economy - households and businesses. Government cannot focus on itself alone.”
Dr. Mascoll said Government’s persistent focus on tackling the fiscal deficit has been counterproductive to the economy. He said, according to some economic theories, during recessionary periods governments are expected to stimulate the economy and absorb the pressure as a way to come out of the recession. But instead, the Government of Barbados has placed the pressure onto its citizens.
“The administration focused on itself. How to raise more and more taxes and the more they raised the less the economy grew. The more it raised the worse the debt got. The more it raised, the more printing of money by the Central Bank. So all of the objectives that were stated are not being realized, in spite of the damage that has been done to the households and the businesses.”
Dr. Mascoll said whichever economic solutions government chooses to enact need to be centered on foreign investment.