President of the Barbados Economic Society (BES) Jeremy Stephen says he welcomes news from Minister of Finance Chris Sinckler in his ministerial statement earlier this week that the economy should see growth next year.
However, Stephen said the BES would have liked more details on the Government’s Fiscal Consolidation Programme.
He said the society was particularly “interested” in the announcement that a number of projects were scheduled to start next year, economic growth to be led by a recovery in tourism, as well as news that a licence has been officially issued for the exploration of oil offshore.
Stephen said once the announced projects were “properly implemented and the capital and necessary concessions were provided” he believed there would be “some” economic recovery, since there would be job creation and the island’s tourism product would also become more competitive.
Jeremy Stephen
“So all in all the society thinks this was a rather interesting Christmas gift with lots to be considered and we do await much more details,” said Stephen.
“The society does not believe, however, that a return to growth would ensue unless the necessary capital investments, not promises, but the actual investments are done.
“But once the oil exploration process, and the natural gas process are successful those would be the immediate drivers of growth along with the hopeful recovery of tourism,” he said, adding that BEC members were waiting to see how the price of oil could really change the outlook going forward.
Stephen said the society categorically agreed with the Government’s position regarding the International Monetary Fund’s tax study as well as news that the Municipal Solid Waste Tax would be reviewed.
He has also welcomed the announcement of a fiscal responsibility framework, saying it should improve the island’s transparency and accountability “and we hope it allows for further buy-in from the private sector”.
“We, however, would wish that when the minister does return to this issue later on in the fiscal year or at the beginning of the next fiscal year, the details he wishes to present to the public would pay more mind to the actions for recourse if this framework is in some way undermined or by any ministry or statutory corporation or if any institution in the Government underperforms.”
While he was heartened to hear that the economy would return to growth next year, led by a recovery in the tourism industry, the economist said he would like to see those increases across the industry reflected in the spend.
“With the increase in tourist arrivals we still remain very cautious on the expectations of some great recovery in the industry itself particularly as many establishments still face considerable amounts of arrears and reduced work force.
“With respect to the fiscal adjustment programme, having 14 weeks of import cover is very good enough to have ended the year,” he said.
Stephen said the BES was also “very interested in the calls for partial privatization of certain statutory corporations, including the Caves of Barbados, and we would very well like to see how the roll out occurs.
“We do expect further retrenchment. But given that there will be a wholesale consultation with the Social Partnership we expect that hopefully there would not be much of a issue or any illegalities that would occur as a result of this attrition process going forward,” added Stephen.