252 responses to “Fourth Review – IMF’s Extended Arrangement under the Extended Fund Facility for Barbados”

1. 

   David

   December 20, 2020 at 7:03 am

   
   

   Cox looks at major issues in Barbados
   By Tony Best As Barbados’ major economic and social challenges and opportunities for 2020 near an end, former Governor of the Central Bank, Winston Cox, has shared his overview on some of the major issues.
   He said that as the European Union moved to review its blacklisting of Barbados as an offshore financial centre early next year, the step was welcomed but the labelling remained a bitter pill to swallow.
   Cox said the strikes by Barbadian workers were a sign of deteriorating relations between labour and management and were unjustified.
   He also addressed Barbados’ expected access to newly approved COVID-19 vaccines. The soon to be launched vaccination effort, he pointed out, wouldn’t lead to the premature end of wearing masks and following the protocols that were effective in curbing the spread of the highly contagious and deadly COVID-19 pandemic.
   Cox next looked at Government’s proposed national minimum wage plan, which he said made sense and should become a fact of life.
   He also noted that the signs of an eventual rejuvenation of the lucrative tourism industry as seen in the rising number of visitors to Barbados’ shores were what the economic doctor ordered. He, however, cautioned that it was not going to usher in a quick economic turn-around.
   In a wide-ranging conversation with the Sunday Sun recently, Cox, a former top economic advisor to successive prime ministers, said that all signs, especially from the International Monetary Fund indicated the Barbados-IMF programme was “moving along according to expectations, in the face of the COVID-19 pandemic.
   Just as important, was the word the World Bank might reopen its lending window to Barbados. It was a good move and the country’s ongoing financial relationship with the Inter-American Development Bank was good news for the Caribbean country, he said.
   A good partner
   “The IDB has been a good partner for Barbados over the years and it remains that way for the country. It is very interesting that Barbados may be in line for a loan from the World Bank because 30 years ago back in the 1990s it graduated Barbados as a borrowing member, something the Government at the time fought against,” he recalled. “I was very much involved in the effort to forestall graduation. We fought very hard against it. A return would be a very important and useful source of long-term lending for Barbados,” he said.
   As for the IMF programme, he complimented both the Fund and Barbados for keeping it at a manageable and positive pace, adding it was going “according to expectations, even in the face of the slowdown in economic activity brought on by the COVID-19 pandemic,” stated Cox. “It would be appropriate to expect some adjustments to take that into account the economic consequences of the COVID pandemic. It would be against a backdrop of increased government spending to help ease the fallout on Barbadians. I would hope that they (Government) would be very careful not to allow the debt to rise too rapidly,” he warned.
   “The debt would always be a red flag. The rate of growth in the debt would always be a red flag. That is something Barbados would have to watch very carefully. The other red flag would be the foreign exchange reserves whether they are increasing, stable or falling,” he said.
   A key factor would be the performance of the tourism industry and he expressed the hope that “there would be a visitors to Barbados and I hope they are returning now that the vaccine is being deployed in many countries. We can hope for a steady growth in visitors, which could lead to a return of good economic health without threatening the nation’s public health.”
   When it came to the EU and the OECD’s (Organisation for Economic Cooperation and Development) unwarranted blacklisting of the country as an uncooperative financial services jurisdiction, Cox, who at different times sat on the executive boards of the World Bank and the IDB, said just when he thought Barbados had put those troubles behind it, they “popped up again”.
   It was hard to see any “reasonableness” in the EU’s action, Cox said.
   No reasoned argument
   He described the EU’s labelling as more of a “power play” by the Europeans instead of being “a reasonably argued position. It was an exercise of power rather than one of reasoned argument,” he said.
   The recent indication that the EU would review its action early next year was a welcomed step that hopefully would lead to better days for Barbados, he noted.
   “It was always a power play, an uneven application of principle because there are places in Europe like Luxembourg and Ireland which quite, frankly, suggested that the principles were being applied unevenly and harshly in the case of Barbados,” he said.
   Modification
   The hard part was that ever since the issue of harmful tax competition was raised by the Europeans and the OECD, the Caribbean country had tried strenuously to cooperate with the OECD, but to no avail, he charged.
   “It seems that every step taken by Barbados would lead to some modification in the definition of what is a cooperative or non-cooperative jurisdiction,” he complained.
   In short, the EU and the OCED were constantly shifting the goalposts to suit themselves.
   Turning to the issue of the plan for a national minimum wage, Cox argued it should be expanded to cover workers other than shop assistants.
   “Quite frankly I don’t see why it should not be expanded to a much wider range of professions and employment,” said the former Central Bank Governor. “I think it is a move in the right direction by the government. I come down on the side of those who are in favour of a minimum wage.”
   Unjustified
   He also suggested that the discussion should be broader to include the idea of guaranteed minimum income which has been gaining some traction in the personal support programme that many governments have introduced to support households and individuals adversely affected by the COVID-19 pandemic.
   Focusing on frequent wildcat strikes, Cox said while legitimate strikes were a “powerful (and needed) weapon in the armory of trade unions, and I hope they would always remain, wild cat strikes were unjustified.
   I don’t think anybody can justify wildcat strikes.”
   He struck a note of caution about the return of a sound economy in the wake of the pandemic, warning it was going to be a “slow” and lengthy process, with no overnight miracles.recovery” in that sector as hinted in published reports about a “steady stream of

   Source: Nation

   Loading…
2. 

   David

   December 20, 2020 at 9:20 am

   
   

   Jamaica remains on a European Union blacklist – on which it was placed in May – of countries whose regimes against money laundering, tax evasion, and terrorist financing the EU deemed not to have been robust enough. Read more here: https://t.co/wVHnduLpsZ #GLNROped pic.twitter.com/n6j53faJzK

   — Jamaica Gleaner (@JamaicaGleaner) December 20, 2020

   https://platform.twitter.com/widgets.js

   Loading…