Worrell's 'cure-all' plan for Barbados' economic road to prosperity
Dr. Delisle Worrell (File Photo)
Implement an International Monetary Fund-backed program to fund public sector reduction by 4,500 workers.
This is the crux of the economic plan outlined by former Governor of the Central Bank of Barbados (CBB), Dr. Delisle Worrell. The economic advisor has outlined a recovery plan for the island's economy in a publication entitled 'Barbados Economy: Road to Prosperity'.
Dr. Worrell claims there are a number of "roadblocks" preventing government from emerging from its economic slump and achieving stability. One such roadblock outlined by Dr. Worrell was the consistent decline in the level of foreign reserves which he noted has been occurring from as far back as 2013. The latest report released from the CBB showed the reserves stood at a mere 8.6 weeks of imports, far below the standard 12 weeks of imports. The precarious situation of the reserves has been further exasperated by the rejection of the sale of the BNTCL to SOL by the Fair Trading Commission (FTC); a sale which was expected to bolster the reserves by $100 million US. He noted as the cost of imports continues to exceed the foreign currency inflows, the government will be kept in an unfavourable position thereby undermining investor confidence.
Dr. Worrell said government needs to reduce its expenditure to what taxes can support and allow for the removal of the National Social Responsibility Levy (NSRL) and the foreign exchange transaction fee.
What he said needed to be done was for government to seek the assistance of the IMF to develop a "separation fund" which would see the public sector cut by 1,500 public servants every year for a three year period and allow each person to take home $60,000.
"It is the public sector that our taxes cannot support and one that does not deliver administrative services efficiently.
At this late stage of the game the assistance of the IMF and other international financial institutions is essential to overseeing the implementation of reforms."
According to Dr. Worrell by reducing expenditure and improving public sector performance through reform, Gross Domestic Product (GDP) can reach three percent in five years and the level of foreign reserves will increase significantly. This plan would ultimately see the stabilization of government's fiscal position.