IMF and Barbados Reaches Staff-Level Agreement

It is done!

It is up to Barbadians to continue to demand wage hikes, wallow in consumption behaviour and engage in the petty politics of the day. It seems the pragmatic approach is to embrace the government’s mantra read many hands make light work. Mia 100 day government has made some questionable decisions – the size of Cabinet as one example, although some  understand the political motive behind the decision.

It is crunch time people.

David, blogmaster

 

IMF Reaches Staff-Level Agreement with Barbados on an Economic Program under the Extended Fund Facility

September 7, 2018

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
  • Staff envisages that the IMF’s Executive Board would consider the proposed arrangement under the EFF by early October.
  • The Barbados’s Economic Recovery and Transformation Plan aims to restore macroeconomic stability and put the economy on a path of strong, sustainable and inclusive growth, while safeguarding the resilience of the financial sector.
  • The cornerstone of the program is a strong front-loaded fiscal adjustment focused on curbing current expenditure, while maintaining space for bolstering social safety nets and infrastructure spending.

At the request of the Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm visited Bridgetown from August 30 to September 7, for discussions on possible IMF financial support for the Government of Barbados’s Economic Recovery and Transformation plan. At the end of the visit, Mr. van Selm made the following statement:

“I am pleased to announce that, in support of the Barbadian authorities’ economic reform program, the IMF team and the government of Barbados have reached staff-level agreement on a 48-months Extended Fund Facility, with access of SDR 208 million (equivalent to 220 percent of quota, or about US$290 million). If approved by the IMF Executive Board, SDR 35 million (about US$49 million) would be immediately available. Staff envisages that the IMF’s Executive Board would consider the proposed arrangement under the EFF by early October.

“In the last decade, the Barbadian economy has been caught in a cycle of low growth, widening fiscal deficits and increasing debt. International reserves have dwindled to US$240 million, well below reserve adequacy levels, while central government debt has become unsustainable.

“The new government that took office in May 2018 is rapidly developing plans to address the current vulnerabilities, in close consultation with its social partners. The Barbados’s Economic Recovery and Transformation Plan aims to restore macroeconomic stability and put the economy on a path of strong, sustainable and inclusive growth, while safeguarding the resilience of the financial sector. The authorities’ fiscal consolidation program, in conjunction with the announced debt restructuring, would place debt on a clear downward trajectory. The strategy of accelerating growth focuses on attracting new investment in areas such as renewable energy, creative and artistic industries, education and health services, agro-industries, research, the international business sector, and tourism.

“The authorities’ reform program, and the important commitment of IMF resources that it entails, is a vote of confidence in Barbados’ Economic Recovery and Transformation Plan. The cornerstone of the program is a strong front-loaded fiscal adjustment focused on curbing current expenditure, while maintaining space for bolstering social safety nets and infrastructure spending. In this context, the measures to reduce government expenditures announced in late August are a critical and important first step. These measures aim to improve the efficiency and effectiveness of public services and reduce government transfers to state-owned enterprises by reviewing user fees; exploring options for mergers; and strengthening oversight. The measures should help reach a primary surplus target of 6 percent of GDP in 2019/20.

“The fiscal adjustment will be complemented by a comprehensive debt restructuring, aimed at securing meaningful debt reduction, reducing financing needs, and restoring debt sustainability. Barbados’ central government debt will be put on a clear downward path towards a target of 60 percent of GDP by 2033, from an estimated 157 percent of GDP at present. Progress being made by the authorities in furthering good-faith discussions with domestic and external creditors is welcome. Continuing open dialogue and sharing information will remain important in concluding an orderly debt restructuring process.

“The success of Barbados’ program will require an extraordinary effort and resolve on the part of the authorities and other segments of society, as well as broad international support. While the initial implementation period will be challenging, Barbados will emerge stronger and more dynamic from the program, and it will be better poised to generate growth and job creation for the people of Barbados.

“The team would like to take this opportunity to thank Barbados’ authorities and the technical team for their openness and candid discussions.”

IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: Randa Elnagar
Phone: +1 202 623-7100Email: MEDIA@IMF.org

227 comments

  • @ Hal
    The Mighty Sparrow, many moons ago, said : “ We like it so”
    That is why we are here this morning , after 52 years of independence and three trips to the IMF, praising our being able to get a loan from those international loan sharks.
    It means that any baby born today, was given birth in the cradle of international imperialist forces and will hopefully escape at age fifteen.
    That is where we are today and lo and behold we behaving as if we just found oil.
    We like um so…………….
    On to 2033. Little David , blow on your IMF horn. Blow boy blow……..

    Like

  • sirfuzzy (i was a sheep some years ago; not a sheep anymore)

    David September 9, 2018 11:00 PM

    Comprehensive Debt Restructuring
    BBD Debt Exchange Offer INDIVIDUALS
    Government of Barbados
    7 September 2018
    

    Decipher this post whichis a c&p of a govt release.

    Like

  • Shoot Miller have yuh not notice the numerous times David has recklessly pulled the agreement button to identify me to all and sundry on BU
    Expect with so many of us he cant get it right
    Lol

    Like

  • sirfuzzy (i was a sheep some years ago; not a sheep anymore)

    (quote) It is too early to have this conversation. Political parties are in the business to win elections. They will say what they have to, to win the susceptible minds of the electorate. It is a universal position. Is is right that this happens? Of course not. You have these idiots who come on the blog with idealistic positions.

    A shortcoming of the system of governance we practice is that everyone has a vote, even the ignorant. Many have voted and will continue to vote contra to what the tenets of the democracy we practice encourage. This is the ‘gap’ that we will have to manage as long as we shall live. (quote)

    @ David,

    Then why the need for “transparency” or “integrity” legislation. Cuss we dun know we elected a bunch of liars and thieves and foxes to guard the hen house(treasury) So they steal a few chicken once in awhile but that is par for the course and that’s what liar and thieves and foxes do right?

    (Quote) Of course not. You have these idiots who come on the blog with idealistic positions. (quote) So true we got nuff nuff nuff on this blog that think just so. The sad reality is that we also appear to have 29 and 12 in the houses of parliament that are as idealistic as the bloggers on BU. WTF?

    Morale of the story “WTF” do u expected from idealistic ppl? Good governance and honest ppl? WTF do u expected from politicians? Good Governance and honest ppl? WTF do you expect from citizens? Good behaviour and honest ppl? Apparent we expect a lot when we are promised a lot from politicians(liars, thieves etc).

    Therfore, who The F…. k are we fooling when we planting yams and expect/want to reap cassava. The WE is US! You cannot lead anyone to a place you have never been. Stop calling yourself a leader and admit that we one this journey together and neither of us have a road map.

    Just my take.

    Like

  • @ sirfuzzy 11.11 am
    …thus the need for a completely new system …and approach.
    ….or the grass.

    Like

  • @sirFuzzy

    It is all Greek at this point. Will wait for additional information.

    Like

  • @sirFuzzy

    In a few words, there is a list with checkboxes to be ticked to be of good standing with the establishment.

    Like

  • The BLP should have used their last 3 years in opposition to prepare a comprehensive plan to govern,

    Let us be typical Bajans and give them more time to ?

    Like

  • Human being are both idealistic and realistic at the same time. We preach honest is the best policy, in the meantime we have the police to prosecute breaches of bad behavior and the judiciary to give everyone a fair shake at justice and prison for the convicted.

    So don’t bash the idealistic among us. Actually this democracy is a experiment in idealism.

    Like

  • @David I think you might be interested in this

    https://www.facebook.com/SupportMiaMottley/posts/1983847358349463?tn=K-R

    Like

  • The blp in opposition had no time to make plans which would have decrease the defecit
    There only interest was winning but like the dog who chased a wagon filled with food when he finally got the wagon looked and thought how do i handle all this food now
    Blp plan was made up of marches
    Rubbing shoulders all now presented to the people in a PR game plan called Watch me Now

    Like

  • @Backooful Jack 4.45pm
    They don’t have all the answers, but can you imagine the former administration even attempting to provide answers? I am still waiting on CS and RS to address Clearwater Bay and the Four Seasons boondoggle as promised.

    @ac
    I give you an “A” for consistency. Reading your spin is better than comedy hour. You find that letter yet?

    Like

  • September 14, 2018
    The nation’s two sugar production companies, the state-owned Barbados Agricultural Management Company (BAMC) and the private Barbados Sugar Industries Limited (BSIL), are to be merged in a public-private sector partnership, the Government has announced.

    https://barbadostoday.bb/2018/09/14/big-sweets/

    Like

  • People are the only true asset of a small nation.
    Therefore the populace must be Educated according to the country’s needs. This approach has worked in Singapore, Malta, Mauritius, Estonia, Bermuda et al small nations.. Bajans must be encouraged and directed into areas that will be able to find properly paid work / careers. Bim does not require 500 Socioligists, Political Scientists or Lawyers per year so we must encourage students to take Accounting / Business, Computers / IT, Trades people etc where Bim currently imports people. We must also plan for which careers we will have requirements for in the future.

    Leaders must focus on engendering a Social Partnership and Cooperation between Workers, Government and Employers. Bajans must be told that the only way out of the current Economic and Financial mess is for everyone to seriously ask themselves what President JF Kennedy said over 58 years ago,”Ask not what your country can do for you, but what you can do for your country.” Bajans should be encouraged to work hard and stop this attitude, especially in some Ministries, that “I only wukking 2 hrs / day”. That attitude must change because we have to put our collective shoulders to the grindstone.

    Bajan Leaders should be researching what is working for these successful small nations and why, how it applies to the next 25-50 years and what Bim can adapt and adopt. Here are a couple rough notes on what these other nations are conducting:

    Bermuda has an excellent reputation in Financial areas, they are currently moving into BlockChain applications for Mutual funds and many other areas. What is Bim doing? Bermuda has one natural advantage location. 2-3 hrs from NY, TO etc and 7-8 hrs from London but Bim is warmer all year. Their new PM is only 38 but has a Masters in IT and Business, he is driving Bermuda to success. We need our Bajans with IT experience internationally to help eg PLT. Bermuda plans so that the majority of Jobs go to Bermudans.

    Military / Harvard grad in NYC is taking retail young people ie barristas et al that make $20,000 / yr and within 11 months have them writing computer code and making $85k / yr. Why once we have decided what areas of IT etc we are going to pursue can we not develop crash courses to quickly educate and / or Retrain our people?

    Estonia very high tech. Why? How are they approaching?

    We can quickly learn much and implement solutions to turn Bim from the retrogression of the previous 10+++years if we are serious about transforming and making a quantum leap.

    Like

  • Thank you very much for your comment on Bermuda after James Greene told us on BU that Bermuda was in the same mess as Barbados. What fake news!

    Like

  • @Moneybrain
    A++
    That is a master plan.that Barbados can follow.
    Harnessing the future through the one resource that we have … brains.
    It is devoid of B, D, Black and white

    Like

  • Good comment by the brain.

    Like

  • Tron, what I said specifically on Bermuda is correct , I am not saying that everything in Bermuda is going well. Our leaders must see what other small countries are doing very well, understanding what they are NOT doing well could also be instructive although we should know much about that aspect in Bim.

    One thing those on BU may want to consider is to stop fighting amongst ourselves and appreciate that we can work together to resurrect Bim. The world does not really care about us, so we have to focus on future success.

    Like

  • The learning from the Jamaica austerity experience dating from the 70s is the need for stakeholders to sign from the same song sheet.

    Like

  • @MoneyBrain September 15, 2018 3:14 PM

    It’s not fair of you to compare Barbados with those other small developing states like Bermuda.

    Those other countries have a thread of discipline and law enforcement which runs right through their social fabric that can be no longer found in Bim today; although they have not spent so much of their GDP on so-called free education.

    Just look at the reckless littering of the streets and open lots and tell us if that would ever occur so consistently in a place like Singapore or Bermuda with impunity

    Maybe it’s your fault (and other ‘white’ blokes like you) for abandoning your place of birth only to make room for shit to float to the top of the leadership barrel.

    Like

  • Piece Uh De Rock Yeah Right

    @ MoneyBrain

    Sometimes when you chaps come here and start sharing out the coolaid de ole man does run far causing of de diabetes that wunna encouraging.

    Just listen to you though …”…Leaders must focus on engendering a Social Partnership and Cooperation between Workers, Government and Employers…”

    Then you continue quite sexily with “…Why once we have decided what areas of IT etc we are going to pursue can we not develop crash courses to quickly educate and / or Retrain our people?…”

    But you are not alone with these sexy statements and here is the BIDC’s wrap sheet for a crime yet to be committed, sorry their BIDC’s conference writeup reads “…Innovate Barbados is an immersive event that brings learning, creativity, inspiration, networking and fun into one singular experience.

    Currently in its third year, Innovate Barbados has become the hot spot for creative problem solving, a gateway through which innovative solutions are engineered for a smart and sustainable future, a place where business and creativity collide and ideas become solutions….”

    I just want any one of you koolaid sharing hosts to give de ole man a document which clearly outlines the IT Intellectual Protection Policy of the Government of Barbados and any one of its ministries INCLUDING THE BIDC.

    In fact since this has been a week of disclosures I would challenge anyone at BIDC to upload a signed contract from the said BIDC of an existing contract (denuded of course)

    Steupseeeeee wunna is not ready for any such partnerships and will not be ready for another 15 years.

    You sorry Barbados, do not honour Intellectual Property but unlike the Chinese who steal IP just like you guys AT LEAST THEY PRODUCE SOMETHING THAT GENERATES FOREX.

    You steal a man’s purse and produce trash (the generic you of course heheheheheheheh)

    Like

  • Miller and Piece,
    Wunna dont want me to stay in Bim or leave!!! Hold me culpable for either decision!

    Bajans have lost their discipline, that is the foundation of a multitude of our problems. True leaders would never
    have encouraged indiscipline. My friends uncle is a master mechanic for large vehicles like Buses, so he went down to Bim on holiday and having learned that TB had maintenance problems thought he would passby one morning. He found a total mess, incompetent people and processes eg he mentioned why they did not have 2-3 spare engines that could be dropped into buses easily so the bus would be back on the road quickly while the engine is being worked on—they did not know how to do that????? I would bet much $$$$ that many Depts of Govt are damaged in the same way, the old time fellas that knew their thing all retired / dead out now and those in charge dont have a clue because of poor leadership. We know this is so because of flooding, sewage, disjointed activity at Licencing dept etc etc.Sensible leaders will tell workers the truth, we have to be disciplined and competent. They would also DEVELOP the workers cababilities.

    Piece, U are a good man but the Diabetes got yuh verging on coma or wha? I dont know what the BIDC are conducting, I dont mek or drink de coolaid never trusted the contents prefer coconut water from the shell better for de back. all I know is that Bim is way behind where we should be. I am sure that there are fellas writing up nufty sweet sounding material at various Agencies / Depts BUT are they actually executing well thought out plans? Do these people have experience or just degrees without top flight experience? Talked with a Senator a few years ago and he admitted to me that they are too many fellas with MBAs that dont really know the tricks of the trade. The type of planning that is required involves Total Coordination at decent speed ie Bim has to make decisions effectively and efficiently with alacrity eg When Bermuda thought about Blockchain they had the necessary legislation ready in short order, it fit with Educational standards to employ Bermudans, it fit with upholding Bermuda as a credible financial centre etc.

    Bajans have much effort to put forth to get to where we should already be. There are many good examples of success globally all we need to do is think it through and then take unified ACTION it is much easier to turn around a small well built boat than an aircraft carrier.

    Like

  • “It’s not fair of you to compare Barbados with those other small developing states…”

    Correct. Plus, ‘small’ is relative. Singapore is considered small (population about 20 times Bdos). Estonia, Mauritius both over 1 M inhabitants.
    Estonia and Malta are part of the EU. Bermuda is a dependency of the UK, etc.
    So comparing Bdos to these countries without digging deeper into the historic and geopolitical contexts falls short.

    The question is, which countries are Barbados peer group? Independent, microstate ( < 500,000 population,say; < 500 sq. km) ex-colony, …

    Yes Barbados could learn much from a Singapore or an Estonia. But a direct apples to apples comparison would be unfair.

    Like

  • Naturally, one would take relative size into account but the principles of how to think, research, strategise and plan are critical. Sir Winston Churchill said “Plans mean nothing, but the process of proper planning means everything”. Mike Tyson said, “they come into the ring with a game plan but one good hard punch changes everything!”.

    Singapore was much less populated 40 yrs ago, they now have more than 1 million economic migrants alone. We should be researching Singapore of 40-50 years ago and then coming to today BUT taking many aspects that are significantly different into account. The critical question is exactly what did they conduct? How did they develop integrated solutions? Bim must move away from Corruption —how did Singapore et al do this? How did they enhance the Education system for all? What was the attitude encouraged by the leadership? Why did they insist on 2 yrs Military Service—hint— it was not just defence but instilling Discipline! Bim should be insisting on developing youth NOT allowing the boyz pun de block to do as they like—put them in the military but dont teach them how to shoot until they prove a change in their attitude! Educate / Train the youth for careers and productive lives appropriate to their abilities and to the Nation’s needs.

    Why attempt to reinvent the wheel???? Research, comprehend, adapt and adopt.

    Like

  • Another good comment from the brain.

    Like

  • Regarding the tie of the Bds $ to the US$ it maybe worth considering that the US$ is very high relative to the other global currencies and Gold maybe there is a benefit to changing to a basket approach, but I am not a Macro Economic professional. As an investment person I would be looking to a change in the US$, as it is too high versus many currencies and Gold, so at some p[oint in the next couple years the trade should be Sell US$ buy Gold and maybe other currencies eg Chinese Yuan. Trees still do not grow to the sky! Please note that China, Russia, India et al dont really appreciate the hegemonic nature of the US$ as reserve currency and want to diminish its relevance.

    Like

  • @ MoneyBrain September 15, 2018 3:14 PM

    I agree 100%! Bermuda and other microstates, microterritories must be examined.

    Like

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