Central Bank Governor Cleviston Haynes finding his voice
The Barbados Government must continue to ensure that the economy remains stable after the reforms made in 2018, and create confidence among investors, the Central Bank said on Wednesday.
Governor Cleviston Haynes, delivering his review of the economic for 2018 and sharing his views on the long road still ahead, said the reforms related to tax policy, revenue administration, SOE reforms and business facilitation which were outlined in the Barbados Economic Recovery & Transformation programme had to be implemented on a timely manner.
This was vital in order to help the country meet the IMF’s performance targets, which Mr. Haynes said, “will be crucial in helping the economy to return to a sustainable growth path.”
It is a pleasure to observe these central bank reports sound more declarative in their pronouncements. We who endured the effrontery of a central bank which seemed for years to be avoiding the desperate economic slide downwards by using its quarterly reports to talk about well the country had done on some obscure list, or how important productivity was to economic recovery, wondered what would happen when there was a change in the captaincy.
At first, while the issues were more solidly addressed, there was a feeling that the governor was holding his tongue; now it seems he is finding his voice.
Looking back on the last decade when, said the governor, the Barbados economy shrank by an average of almost three quarters of one percent per year, it was important to note that the forecast for 2019 is for no growth.
This was the case despite the fact that tourism is expected to perform favourably due to an expected increase in airlift, he noted, and special events like the English cricket tour, along with an increase in ships docking at the port.
The governor also acknowledged that the effort under BERT to reduce government spending could continue to dampen economic activity. He said, However, this trend could be reversed through higher levels of private sector investment.
He noted that several projects in the tourism, healthcare and distribution sectors had been announced to start in 2019, and they were important if real economic activity is to grow.
But, as the government tries to achieve a primary surplus of 6% of GDP, which means spending around $200 million less during the coming fiscal year, and bringing in more revenue from taxation, the global outlook has been revised downwards by the IMF.
And on top of that, if oil prices rise much more they will affect what he termed “an otherwise benign inflation environment.”
He advised the Government to “continue to manage its expenditure to avoid any shortfalls in its targeted goals,” but noted that while Barbados had reduced its overall national debt by almost 27% due to the renegotiation of domestic debt, and while the suspension of our external debt repayments has helped to shore up reserves, “the completion of the restructuring remains important to the overall stabilisation effort.”
And if the government continues to implement its policies effectively, the multilateral agencies will be more keen to provide funding for new projects, allowing our foreign reserves to continue to grow in 2019. However, he noted, “The road ahead remains challenging.”
Mr. Haynes is the proud son of a man who transformed the food retail market in this country and paved the way for people like Neville Rowe of Julie’N fame. I use that adjective because it was clear to me, during a personal conversation I had with him recently about his life mentors and influencers, how much admiration he has for his father and how much he learned from him.
His father was the founder of the Rick’s supermarket chain and was far ahead of his contemporaries in business. Governor Haynes is learning to bat well on the wicket he has chosen for his career.