Published On: Tue, Dec 18th, 2012

Barbados economy must be restructured, says minister

BRIDGETOWN, Barbados – As a result of the expected prolongation of global recessionary conditions, Barbados must continue to work to keep its economy stable and the restructuring process must start now, said Minister of Finance and Economic Affairs, Chris Sinckler, on Friday.

Sinckler pointed out that Barbados was not "an enclave untouched by the reality of the vicissitudes and vagaries of the global market place," and was highly dependent on "an ever more sophisticated and demanding global market".

Therefore, he said, "the country needed to earn foreign exchange in order to generate the type of balance and sustainable economic growth" that was desirable.

"There are no second chances, we have to do it right the first time," he stressed.

Outlining a formula for economic recovery, the finance minister added that Barbados should try to maintain a fixed exchange rate regime and ensure that there were adequate levels of foreign reserves to meet annual needs, as well as raise the quality of service and facilitation to their highest levels.

He added: "...Barbados cannot generate and sustain an economy and society on the basis only of the spending of Barbadian dollars among ourselves. Getting haircuts, hairdos, or even manicures, though good and desirable, can't pay the bills, service the debt, provide extensive social services such as education, health care, public transport and the like."

He continued: "We must reduce and eliminate our over-dependence on foreign oil not by granting subsidies for gas and diesel which is almost akin to telling an alcoholic he has to drink alcohol, but by forging ahead in the most aggressive manner with our alternative energy programme.

"We must proceed post-haste with our reform programme for government both in central administration and in the para-statal entities to ensure the elimination of wastage, and duplication while creating greater efficiencies and guaranteeing value for money.

"We must build a truly inclusive economy where investors, owners, managers, and workers are included in the process of building our economy and feeling a sense of ownership of the process."

The finance minister stressed that it could not be "business as usual" for the country, since the formulas that worked five or even 10 years ago would not necessarily work today, since the world had changed.

Turning attention to the effects on the automotive sector in Barbados, Sinckler observed that some businesses had experienced a 40 per cent fall off in annual sales and gave the assurance that government would continue to work with the key players in the industry to ensure that "this very critical part of our economy continues to be a viable and attractive business".

Pointing to the concessions that were granted to certain categories of electric vehicles as well as solar powered vehicles by government, the finance minister disclosed that there were plans on the horizon to have more electric vehicles available to consumers.

He also said that some "structure and order" would be brought to the current situation that existed with regards to the importation of "knock-down vehicles for re-assembly in Barbados".

By Cathy Lashley

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