December 16, 2019
- The completion of the review enables an immediate disbursement equivalent to SDR 35 million (about US$48 million). A four-year extended arrangement under the EFF was approved on October 1, 2018.
- Program implementation is strong. All program targets for end-June and end-September 2019 have been met.
- Since May 2018, international reserves have increased from a low of US$220 million to more than US$600 million at end-October 2019.
On December 16, 2019, the Executive Board of the International Monetary Fund (IMF) completed the second review of Barbados’ economic reform program supported by an arrangement under the Extended Fund Facility (EFF). The completion of the review allows the authorities to draw the equivalent of SDR 35 million (about US$48 million), bringing total disbursements to the equivalent of SDR 105 million (about US$145 million).
The four-year extended arrangement under the EFF, for an amount equivalent to SDR 208 million (about US$288 million, or 220 percent of Barbados’s quota in the IMF), was approved by the Executive Board on October 1, 2018 (see Press Release No. 18/370 ).
The Executive Board today also concluded the 2019 Article IV consultation with Barbados. The associated press release will be issued separately.
Following the Board discussion of the review, Mr. Tao Zhang, Deputy Managing Director, and Acting Chair made the following statement:
“Barbados continues to make good progress in implementing its comprehensive homegrown economic reform program. All quantitative performance criteria, indicative targets, and all structural benchmarks for end-September 2019 were met.
“The fiscal adjustment continues as programmed with the primary surplus targeted at 6 percent of GDP for FY2019/20 and subsequent years. This target for end-September 2019 was met by a significant margin, and the FY2019/20 budget provides a solid basis for reaching the target for the next fiscal year. Tax policy reforms aim to enhance revenue, while improvements in tax and customs administration are essential to support medium-term revenue. The planned adoption of a fiscal rule in 2020 will help sustain the adjustment effort over the medium and long term.
“State-Owned Enterprise (SOE) reforms are essential for achieving the primary surplus target and maintaining it over the medium term. To secure fiscal space for investment in physical and human capital, transfers to SOEs are envisaged to significantly decline by a combination of stronger oversight of SOEs, cost reduction, revenue enhancement, and mergers and divestment.
“Adequate social spending and an improved safety net to protect the most vulnerable members of society are key priorities of the program. Social spending is being protected, preserving Barbados’ strong social safety net and limiting the impact of the stabilization program on low-income households.
“A comprehensive public debt restructuring complements the fiscal consolidation. The recent agreement reached with commercial external creditors will help reduce uncertainty and improve prospects for investment. Under the program’s macroeconomic framework, the restructuring agreement will facilitate reaching the 80 percent of GDP medium-term debt target in FY2027/28, and the 60 percent of GDP long-term anchor in FY2033/34.
“An improved governance framework of the Central Bank of Barbados would facilitate limiting monetary financing to the government, and strengthening the central bank’s mandate, autonomy, and decision-making structure. Measures to strengthen the AML/CFT regime would also be helpful.
“Strengthening disaster resilience is key to boosting medium-term economic prospects. Climate change is likely to increase Barbados’ vulnerability to weather-related events that could have a major impact on its economy. With the inclusion of natural disaster clauses into new domestic and external bonds, Barbados effectively used the debt restructuring to strengthen its protection against natural disasters.
“Structural reforms are needed to unlock Barbados’ growth potential. While the process for providing construction permits has been streamlined, much room for improvement in the business climate remains. Deeper regional integration would also help increase Barbados’ growth prospects.”
Full IMF Report – Article IV Consultation and Second Review
Article IV Consultation and Second Review Under the IMF’s Extended Fund Facility for Barbados – “Program Implementation is Strong”
55 responses to “Article IV Consultation and Second Review Under the IMF’s Extended Fund Facility for Barbados – “Program Implementation is Strong””
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Barbados has passed its latest International Monetary Fund (IMF) test with flying colours, in the process impressing the directors of the fund, and opening up for itself access to almost $100 million from the Washington-based institution.
https://www.nationnews.com/nationnews/news/243152/barbados-passes-imf-test-access-funds
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Reads like a report out of a mafia handbook
All is well as long as the money is paid
More smoke and mirrors
Nothing here to applaud cause the reality on the ground says different
Dont see how long these long handshakes and pat on the back gonna last without growth -
@John A
You would have taken note of the following extractwd from the Article IV report.
State-Owned Enterprise (SOE) reforms are essential for achieving the primary surplus target and maintaining it over the medium term. To secure fiscal space for investment in physical and human capital, transfers to SOEs are envisaged to significantly decline by a combination of stronger oversight of SOEs, cost reduction, revenue enhancement, and mergers and divestment.
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If Barbados is able to generate the economic activity to compare this initiative will be worth the hype. As a bajantothebone just saying.
Year of Return generates $1.9 billion
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@ David December 17, 2019 6:33 AM
“State-Owned Enterprise (SOE) reforms are essential for achieving the primary surplus target and maintaining it over the medium term. To secure fiscal space for investment in physical and human capital, transfers to SOEs are envisaged to significantly decline by a combination of stronger oversight of SOEs, cost reduction, revenue enhancement, and mergers and divestment.”
While the SOE long-promised restructuring grass is failing to shoot up roots the fiscal horse to fix the broken-down infrastructure of the country is bleeding to death.
Doesn’t that pipedream sounds ‘totally similar’ to a ministerial statement published in December 2013?
Just another serving of cold soup from 2013 warmed up to feed as bullshit of promises to the 2019 fools with rather short memories:
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++“Additionally Mr. Speaker, earlier this year, the Ministry of Finance formally requested technical assistance from the IMF’s Fiscal Affairs Department in two critical areas of government’s operations: Tax administration, and fiscal/operational reform in the key statutory entities which rely on central government for large transfers for their operations.
For some time now most internal and external examiners have expressed deep concerns about both of these areas as key examples of parts of government’s operations which exhibit unacceptable levels of inefficiency and dis-functionality resulting increasing financial burdens to the state. I am happy to announce that the Fund has accepted the requests and starting next month, the first team will begin its examination of the fiscal and operational challenges of some of our key statutory entities.
In anticipation of that and in an effort to advance and concretize this work, the Ministry of Finance will assemble a high level task force of senior finance, business and accounting experts to work along with the Fund’s team to finalize a reform agenda for the selected entities to be presented to the Minister before mid-year.
also anticipate that very shortly the Fund will identify a team of experts to conduct the long overdue comprehensive assessment of the direct and indirect tax systems in Barbados with a view to advising government on major reforms necessary in both tax policy and administration.”
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@Miller
This is the part of the restructuring that concerns some of us. This is where a lot of the pork is located and what feeds the culture in the land we need to get rid of. We need to see some movement. Bear in mind this is a pervasive thing to be found across the region. If we want to be the small model island we once were we must move the needle on these issues.
Did you listen to the PM talking about enforcing fines if people do not clean vacant lots? We need to see this expanded to littering. The blogmaster knows you will agree.
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@ David.
Yes I can see the IMF will want to encourage divestment. Our record of managing SOEs is pitiful and they know this so getting rid of them will be their approach, which as you know I more than support.
The way out for us as I see it is twofold. While we try to increase economic activity we must at the same time shed the money pits.
If we can think of a USD saved as being a USD earned, then we need to put some money into making us more self sufficient in food supply. This will also cut the demand for FX more. As I said for us to succeed it can not be driven by a single economic engine anymore.
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@John A
The IMF have managed enough of these programs to know most countries are too indiscipline in this area. This is how politicians and the parties pad their popularity. If we the people cannot help ourselves through the people we elect then the IMF will do the job for us, after all, this is the reason we signed up for membership in the seventies.
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All well and easy for IMF to expect govt to put measures in place which will affect people household
Sad that govt cant find a homegrown program working alongside private enterprise to help carry the overload of govt workers
However all knows how such policy have gone
Private entities agreeing until time comes along with expecting govt to hand over more of the treasury in order for them to fully get on board
As for the IMF they could not care less about the realities
I heard Seaga saying that when the IMF worked out a plan for Jamaica
When he saw the harshness of the austerity measures his response to the IMf was to ask
“What about the people” the answer given by the IMF it was not there problem
The long and short always start with what is best for the IMF
Reason why govt should proceed with caution before accepting mechanical applause and token words of goodwill and money -
@ David BU
Where did you get that version of the IMF remit from? You need to reread. The IMF is into short term financing with conditionalities. Most of these do not coalesce with the economic and financial realities. That is the main reason they prefer the programmes to be home grown. They know less than the local technocrats. The performance tests are about meeting agreed targets whether they are efficacious or not.
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@Vincent
You read what Dr. Kevin Grenidged has to say?
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David I am happy to see we are meeting our restructuring targets. What concerns me though is we are pinning all of our hopes on Tourism.
I would love to see UWI or someone to do a study of our import bill and come up with a list and value for what we can grow locally. Once this is done I would like to see a program put in place to ensure it happens.
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@ David Bu.at 10 :49.AM
No I did not. What did he say? I did read that the IMF official said BERT was home grown. And from hands on experience I know that they are. IMF provides technical assistance on request. They do not impose recovery programmes. They advise at the most. The responsibility remains that of the GoB.
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@Vincent
All reasonable people understand the purpose of entering an IMF program. It happens when those elected to manage mismanage. One would think there is a vested interest in the IMF executive supportive of growth efforts? Sure it is not adversarial or rigid as it was in the 70s.
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I would love to see UWI or someone to do a study of our import bill and come up with a list and value for what we can grow locally. Once this is done I would like to see a program put in place to ensure it happens.
I believe processed food makes up a large portion of our import bill (Beverages, dairy products, meat). Goddard’s (Farmers choice, HIPAC) and Banks Holdings simply cannot meet the demand.
What we need to encourage is the production of high quality premium products that can be exported (Clifton Meats for example).
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@Redguard
What we also need is to investigate FX leakage. It makes no sense to put a country through this austerity program for it to come to nought.
– first in the tourism sector where money is paid for services offshore
– second but not last is the practice for many years of leading importers in Barbados setting up companies offshore and forwarding and billing items to themselves in Barbados. #invoicing
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@Redguard
Agree with you there but I believe we can start with the vegetable market and bottled water one at least.
Ideally it would be good for government to use some of their land for a green house project with say 4 size of greenhouses for rent to private growers. So we could have say 3000 st ft , 10000 sq ft and 30000 sq ft units erected on state land for a monthly rental.
I mean right now all we growing on it is weeds anyhow. This is the kind of thinking I would like to see from our leaders. After all a USD saved is one earned.
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@John A
How is the land lease program working out?
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No need to investigate, you have already identified some of the causes, the real root cause though is poor regulation and lack of enforcement.
Regulations should be written in such a way that to be in breach of them requires a conspiracy or willful negligence. Leakages implies incomplete coverage by regulations or something overlooked. These so called leakages are not that, they are the result of conspiracies. -
@ David.
The land lease can work but the problem is when we get heavy rain many of the vegetable crops are lost as happened recently. What we need to do is take the land lease idea and build on it to include greenhouse rentals as part of the offering. That way every time it rains we wouldn’t have to turn to imported lettuce and tomAtoes at ridiculous prices just to mention 2 items.
Now let me make it clear I DON’T want government to get into agriculture, just make the facilities available In various sizes for those that wish to.
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A sober analysis of the credit rating public discussion by Krystal Howell.
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The question should be one of how long can Barbados sustain its targets
How long can govt be asking the people to pull the wagon
From my vantage point what i observe is a new formula for trickle down economics managed by the IMF
Hoping that with a roll of the dice all sixes will emerged -
@ John A
What about the Clico?
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@Hal
Not sure where that is now but they have some of the beat agricultural land on the island sitting idle. Perfect place to try out a greenhouse project.
Of course we know there isn’t as much pomp in a project like that when compared to the infamous hotel corridor. Having said that we can eat food but not concrete.
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@John A
There is something about slavery in our historical memory. Bajans do not like agriculture, it reminds them too much of slavery. They want to indulge in high finance, punch above their weight. I call it the Bajan Condition.
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The problem here- we have discussed to death- the inputs make wide agriculture agriculture production in Barbados an expensive venture, coupled with unbridled praedial larceny – Labour, Water etc. to make this happen we need a plan to circumvent these challenges. To add agricultural projects are not viewed favourably as bankable. Has nothing to do with Bajan condition. It is an issue plaguing countries that have geared to be service economies.
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In this modern era of technology even argiculture has gone high tech
The days of olefashioned farm work is long gone
Barbados has been out maneuvered by a global world who has advance in both speed and production of products
Now it is left up to our technocrats to rolled out formulas that are technological geared to their educational systems -
There is something about slavery in our historical memory. Bajans do not like agriculture, it reminds them too much of slavery. They want to indulge in high finance, punch above their weight. I call it the Bajan Condition
@Hal
Obviously you have no way to produce evidence to support this ridiculous claim, this seems more like personal bias. Let me offer an analysis from a business perspective.Agriculture is a business. Either you grow or you increase profits or a combination of the two. To grow you need land and capital, how many bajans have access to both, not many. Increasing profits is best achieved from owning the downstream manufacturing and processing (Re: Cow Williams was a dairy farmer and also a shareholder in PHD).
What Bajans need to do is form a co-op, pool land and capital and invest in processing and manufacturing. In other words own more of the supply chain.
My favourite new company Clifton Meats is an example. I assume they are descendants of the owners of Clifton Hall plantation so they already had access to land. They probably started out as raising cows, pigs etc and being a supplier. Through investment they now process their own meat into a premium products.
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Any diversified economy should have an Agricultural sector. It does not have to be dominated by a sugar industry. Considerations of food security highly recommend other food crops.
I think we have in the recent past managed a high level of competence in hydroponics. -
@ Redguard
How can I produce evidence to substantiate my hypothesis? And how can it be a personal bias? I did not realise agriculture was an empirical exercise. I thought it was a sport.
My suggestion is that the reason why so many young black people do not want to work on plantations, and this is not only Barbados, is because of historical memory. They themselves may not be able to articulate the reason why they prefer to be lawyers than planters, but lodged in our cultural memory may be a resistance to the working on the land. My suggestions is it is because of recent historical memory. Agriculture has become part of our cultural DNA.
I will make one observation. Indian indentured servants were brought to the Caribbean at the end of slavery because the slaves left the plantations in droves at the end of the apprenticeship precisely for this reason. In Barbados they headed for town and what we now know as the slums.
The Garrison became a hive of prostitution in the mid 19th century as many of the people (males and females) preferred prostitution to working on the plantations. Funny how history repeats itself. Those people who moved to ‘town’ became disparaging of the ‘country bumpkins’.
As to food security, that much is obvious, but most food going in to the 21st century will be factory made or from super farms; already from the moment a baby is born it is fed on factory produced food.
In my time, we were fed as babies on mashed pumpkin, pap, and potatoes, now young babies eat mainly food produced by the big Swiss, US and wider European companies ie Cow & Gate, Nestles, Heinz, Actamil, Farley’s, Plum Baby, Milupa, etc.
We also grew our own animals, chickens and turkeys, now many consumers are prepared to buy these products from supermarkets, ignoring the sources. and fowls. Which government used planning laws to remove domestic animals from private homes?
All you have said about food security is right, what is wrong is believing that Barbados (166 sq miles) can feed Barbados. I suggest we look out to our CARICOM brothers. Guyana can feed more than the entire Caribbean. Dominica can more than feed the whole of Barbados.
Let us think of comparative economic advantage: we may import food from neighbouring islands, and export our goods and services to them. Strategically, this is the future, not the obsessive nonsense about foreign earnings. -
Good news, garbage trucks are coming!
Another ten garbage trucks are expected to arrive in Barbados before the end of this week, Prime Minister Mia Mottley has announced.
And by early 2020, there should be another ten on island, to help the Sanitation Service Authority (SSA) overcome the significant challenges it faces in collecting garbage in some parts of the island.
“I think [we] have ten trucks coming in another day or two, and another two, I suspect, by the end of the year and then another eight in the early part of the new year,” Prime Minister Mottley told reporters today after a tour of Pot House, St John, where she also expressed concern that garbage continues to block drains across the island, and urged Barbadians to stop littering.
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Slavery finished since 1838. It is a cop-out to blame our indolence on a system that no longer exists. It is time to shoulder our responsibilities and play, to the best of our abilities, the hand fate dealt us.
I am sick and tired of this Pity Party Syndrome. -
I contend that before sugar became a bad word in many housholds
Barbados should have been upfront and centre digging their heals and looking for a stronghold in the organic market
There is no country (today) that invest in agriculture that isnt using their soil to bear plenty fruit in the organic market
All the long talk about agricukture must be triggered by a global mindset which is focus on what the consumer wants and not what used to be
Unfortunately smalll islands govts does not possess a powerful thought process called vision
Most only knows how to react to circumstances mind u with crticism and the proverbial blame gamr after the horse has bolted -
@ Vincent.
Let me tell you why I feel strongly a well planned green house project is the way to go.
Firstly the market is already there and does not have to be created. If for argument sake we have a $400 million dollar food import bill and $150 million can be grown locally, that is an immediate market there for the project to target.
Secondly if we plan to build more hotels to attract more tourist that too is a guaranteed market there for future growth.
Thirdly I know the chef at a fancy west coast restaurant that hunts high and low for local tomatoes regardless of the price. He will tell you while the imported pretty red tomaToes may look good, they have no flavour and he refuses to use them in his dishes. The same applies for our local lettuce.
So you have a preferred product quality wise, a guaranteed market as a percentage of our food import bill and guaranteed growth rate, as a result of the planned increase in hotel stock.
Add to this acres of idle land in the best agricultural areas in the island are already owned by the state and Clico policyholders, hence lies readily available for the project.
Lord what more wunna could ask for to implement the green house project? We ain t talking about being out there in the hot Sun forking from sun up to sun down like 1940. We talking about using green house technology to increase annual yield in a controlled greenhouse environment, where production will be focused on identified items that feature high on our food Import bill.
After all a USD saved is a USD earned.
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@Redguard
“I assume they are descendants of the owners of Clifton Hall plantation so they already had access to land.”
Clifton in St.Thomas and Clifton Hall in St.John are two different properties. I “think” the latter is owned these days by an Italian. The former is associated with the location of the meats. You better watch out, the owner is one of @WARU’s favourite targets. -
Good news, garbage trucks are coming!
Excellent news. Minor challenge is this is essentially what Minister Prescod said nearly a year ago.
https://www.facebook.com/watch/?v=1031437507057386
the best news announcement ever!! I think in Barbados they refer to it as “pretty as shiite”
I know nobody can produce better theater, when the trucks finally arrive. -
@NO
Fluff, the government has no money and was constrained by BERT.
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Two trucks better than none
Now lets see how much tons of garbage they can hold -
” Government embarks on a national $2 million clean-up drive.”
$2 million clean-up drive.
https://www.nationnews.com/nationnews/news/243158/pm-fine-warning
“We Gatherin” starts January 1st 2020. 15 days to clean up.
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@Hants
Another good news story.
#wegatherin
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No matter how many trucks barbados cannot win the war on garbage
Pretty soon all will hear how much is the price to collect the garbage
Btw its is three days and counting and Abrahams promised that within days people would hear of the new agreement between govt and Innotech -
POOR MARI
Cant tek the good new
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John A
Agree with you on the green houses/ clico land etc. was thinking about it a few days ago but on a personal scale not a national one like you.
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Another local business gone.
Home / Local News / ANSA takes over Trident
ANSA takes over TridentDecember 16, 2019
After months of negotiations, ANSA McAL (Barbados Limited) has purchased the shares of Trident Insurance Company Limited.
https://barbadostoday.bb/wp-content/uploads/2019/12/Ansa-Mcal-Trident-Insurance-acquistion-copy-730×456.jpgChairman of ANSA McAL Andrew N. Sagba made the announcement in a statement issued today, saying the Trinidad and Tobago conglomerate was delighted to welcome Trident Insurance into the wider ANSA McAL family which comprises 73 companies in more than eight countries.
It is not clear whether the sale of Trident Insurance will affect the staff complement there. Sabga only offered assurances to policyholders in the statement, saying “Trident insurance would continue to conduct business as usual”.
Back in June, David Alleyne, General Manager of Brydens Insurance, which is a branch of the ANSA McAL-owned Tatil Insurance Company in Trinidad and Tobago, told Barbados TODAY, that the companies had come to an agreement to join forces to create a stronger, focused entity.
At today’s signing, President and CEO of Trident Insurance Algernon Algie Leacock said the resources of the ANSA McAL conglomerate would enable Trident Insurance “to better support the evolving needs of our policyholders, and to remain a strong player in this fast-paced and aggressive financial environment”.
“We are therefore extremely pleased to accept this offer,” he added.
Leacock also revealed that the deal paves the way for the Leacock family and Group to pursue “other business opportunities which are a better strategic fit to their existing businesses and future expansion plans”.
The over 39-year-old Trident Insurance Company offers a range of products including property, motor, travel, liability and marine insurance. It is in the top ten of insurers in Barbados, based on gross written premiums. (SD/PR)
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David Bu at 4:28 AM
Another financialisation of a local asset. Do you recall who have and are setting the example? One should not plant potato slips and expect reap yams. Is this part of the Economic Transformation process?
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@Vincent
If Bush Tea came out of retirement he would suggest that the surrender of local businesses is an indictment on how we have educated our people. Is it fair to label our people as highly educated if we cannot protect homegrown enterprise?
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@ David Bu
There is obviously a contradiction between education and domestic ownership of the means of production.
Do not blame the Education System. It is fulfilling its mandate to teach us how to think critically. Business decision making and self interests constitute a completely different ball game. -
@Vincent
For some including the blogmaster the two are not exclusive.
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Isnt the Education system a major tool in helping to build an economy
E.g China
A country that competes admirably and strongly in a global atmosphere first by prioritising the importance of having a education system
The blogmaster invites you to join the discussion.