The independent body monitoring the progress of Government’s International Monetary Fund-backed economic recovery programme wants a full reopening of the economy.
The Barbados Economic Recovery and Transformation Plan Monitoring Committee (BERT MC) says it’s crucial to getting the country back on a path of growth amid the COVID-19 pandemic.
Delivering the BERT MC’s 12th public report on Monday morning, co-chair Trisha Tannis said that although Government had met all its targets under the programme up to September 30, 2021, it would be challenged to continue doing so if the fallout associated with the COVID-19 pandemic was not addressed. She said the Committee was particularly concerned the fiscal targets could be missed because of the sluggishness of the economy – with growth projections falling from 7 per cent early in 2021 to now 1-2 per cent.
“It’s essential that the full reopening of the economy takes place and that we really get to a position in our management of the crisis that we’re back to some degree of normalcy without restrictions but still being able to manage the crisis responsibly,” Tannis said, adding that measures to effectively manage the situation must be implemented to ensure the healthcare system does not become overwhelmed and that businesses can continue to operate safely and provide jobs.
“We need to avoid anything that looks like a full lockdown of the economy as much as we can. We do know if that’s anywhere in our near- to medium-term future that that will essentially set us back again.”
Despite the impact of the pandemic, combined with the ashfall from the erupting La Soufrière in neighbouring St Vincent and Hurricane Elsa that affected the country earlier this year, Government met all its marks under BERT, including net international reserves to levels well above target and limits on debt and expenditure.
However, Tannis warned that the continued severity of the impact of COVID-19, the increasing challenges with supply chain logistics globally, and continually rising oil prices coupled with limited GDP growth opportunities were risks to the programme.
She said the BERT MC was concerned that even with the lowered fiscal surplus target, it will continue to be a significant challenge to meet the established targets. As a result, Tannis said, “close monitoring and continuing collaboration and negotiation with the IMF must continue as the economic uncertainty remains at elevated levels”.
“There’s still a lot of economic uncertainty and we do really need for the COVID-19 pandemic to be continued to be managed effectively,” she said.
“Concerning, obviously, is the lack of productivity occasioned by frequent mini-lockdowns across the private sector. That is something that we need to bring under control and we need to look at how we support the private sector and the economy on a whole from these types of mini shocks that are happening below the surface…..
“It’s very difficult to get back on a firm growth trajectory with that type of profile occurring in the private sector and in the economy at large, so management of the crisis is still very much a number one priority for the committee,” she added.
Tannis also pointed out that debt had risen to close to 150 per cent of GDP, while GDP remained stagnant, resulting in the debt-to-GDP ratio rising “a bit more swiftly”.
“We can actually temper that a bit with a bit more growth that will come, hopefully, as we look into a very buoyant winter season for 2022, to kickstart the economy on sound footing for 2022 – of course assuming we don’t have any further disruption as occasioned by Omicron or any other additional variants that would force us to be a lot less competitive with our hospitality offering than we are anticipating at the moment,” she said.
On Sunday, Barbados Hotel and Tourism Association (BHTA) chief executive officer Rudy Grant said the winter season promises to be a great one, with some hotels already reporting full bookings.
“It’s really critical that we get our tourism sector back on track, get back to close to full occupancy,” Tannis said. “Right now the projections are, I think, 80 per cent at highest, which is still good compared to where we were last year.”
The BERT MC co-chair added: “Being perceived as a safe jurisdiction in the eyes of our major tourism partners and ensuring that steps are taken to facilitate the efficient and effective conduct of business are critical factors to the recovery of the economy and the reengagement of many laid-off employees.”
President of the Congress of Trade Unions and Staff Associations of Barbados Edwin O’Neal, who is also on the seven-member BERT MC, said the impact of the sluggish growth on the workforce was a concern for labour representatives, although it was understood in the current circumstances.
Tannis noted that the unemployment rate stood at around 17 per cent.
“The stagnation or near stagnation of the economy or any aspect of the economy that retards…the expected and desired bump in employment figures is a worry and of concern,” O’Neal told the virtual press conference at which the BERT MC’s latest report was released.
The trade union leader added that while it had been expected the private sector would have picked up the slack when Government workers lost their jobs at the outset of BERT in 2018, several projects that would have provided opportunities for the displaced workers have not got off the ground.
“In 2018, nobody foresaw COVID, nobody foresaw the explosion of the volcano, nobody foresaw the extent of the hurricane,” O’Neal said. “So when all of these factors are taken into consideration, the drag on the economy is understood, but it does not make for comfortable or easy living, because at the end of the day there is still too significant a number of [people] not fully involved in the economic activity of the nation state.” (DB)
Read our ePaper. Fast. Factual. Free.
Sign up and stay up to date with Barbados’ FREE latest news.
Source link
