Barbados Government Preparing For Rainy Day
October 9, 2009 Leave a comment
The Barbados Government is taking a number of steps, including negotiating multiple loans, to cushion the effect on the island’s critical sectors if the global recession deepens.
In light of the uncertain economic outlook, Minister of Economic Affairs and Empowerment, Innovation, Trade, Industry and Commerce Dr David Estwick says government has initiated ‘A Short and Medium Term Action Plan ‘formulated by a Special Working Group on the Economy, to outline a “road map for the development and implementation of several policy initiatives to stabilise the economy”.
Among the proposals to be undertaken by government are measures to improve the level of competitiveness and to maximise the opportunities which may emerge from the crisis; the provision of resources to assist the productive sectors in riding out the current period; and the allocation of a fiscal stimulus to sustain economic activity and safeguard jobs.
Dr Estwick added that government had negotiated a number of loans, including a BDS$300 million (US$150 million) advance from Trinidad and Tobago, in the event of a deeper economic crisis.
He revealed that government had also secured a US$120 million loan from Scotia Bank and Trust, and has the option of obtaining another US$150 million from the World Bank, if necessary.
In addition, the minister said, Government could also draw down from the Inter-American Development Bank’s sustainable liquidity programme.
Noting that Barbados had not escaped the vagaries of the worldwide economic meltdown, Dr Estwick said the Central Bank of Barbados’ recent review of the economy had predicted that domestic economic activity would continue to decline for the rest of the year and into 2010.
He said this was evidenced by job losses; declines in potential investments; closure of businesses; increasing costs of business transactions; and downturns in the island’s tourism sector.
Given this situation, he described the financial outlook as fickle.
“As a result of these developments, the economic outlook for Barbados remains very volatile. There is the expectation that activity in our major industries, particularly tourism, will further decline, thus negatively impacting overall employment, and even eroding some of the welfare gains made over the past two decades,” Minister Estwick said.