The raging Covid 19 pandemic continues to test human and financial resources of all countries especially Small Island Developing States (SIDs). Many have forgotten that before the pandemic the sorry state of the local economy. Despite the nod from IMF Van Selm (Mr. BERT) that “in this very challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program, while expanding critical investments in social protection.” A simple-minded blogmaster must ask Prime Minister Mottley what is the mid/long term plan to sustain the economic and social well being of the country? The blogmaster acknowledges this is a difficult time.
David, blogmaster
The International Monetary Fund (IMF) has concluded its February virtual visit to Barbados. The IMF team, which held meetings with local officials from February 2 to 5, was led by Bert van Selm.
At the end of the visit, van Selm issued a statement in which he acknowledged the economic impact of the COVID pandemic on Barbados’ economy:
“The prolonged COVID-19 pandemic continues to have a major impact on Barbados. The economy is estimated to have contracted by about 18 percent in 2020, with a gradual recovery projected to start in 2021. Tourism arrivals remain at a fraction of normal levels, and recent increases in COVID-19 cases in key source markets, including the US and the UK, will likely delay the recovery. In addition, a recent outbreak of COVID-19 in Barbados led to an ongoing lockdown that will reduce economic activity in the first quarter of this year.”
The statement noted that “in this very challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program, while expanding critical investments in social protection.”
Van Selm confirmed that the island had met its December targets under the Enhanced Fund Facility (EFF) programme.
The statement also highlights several of the structural changes that are ongoing or have been completed:
“A new central bank law, aimed at strengthening the autonomy of the bank while limiting the provision of credit to the government, was adopted by parliament in December 2020. An actuarial review of the civil service pension system was completed in November 2020, providing the basis for upcoming public pension reform. A new procurement law to strengthen the fairness, integrity and transparency of the procurement process is expected to be submitted to parliament in February.”
Source: Central Bank of Barbados
Read the full text of the IMF report:-
February 5, 2021
- The global coronavirus pandemic is causing a deep recession in Barbados.
- Implementation of the Barbados Economic Recovery and Transformation (BERT) program remains strong, despite the COVID-19 shock.
- Program targets under the Fund-supported program for end-December 2020 were met, and international reserves reached more than US$1.3 billion at the end of December.
Washington, DC – February 5, 2021: At the request of the Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm conducted a staff visit via videoconferencing between February 2-5, 2021 to discuss the implementation of Barbados’ Economic Recovery and Transformation (BERT) plan, supported by the IMF under the Extended Fund Facility (EFF). To summarize the mission’s findings, Mr. van Selm made the following statement:
“The prolonged COVID-19 pandemic continues to have a major impact on Barbados. The economy is estimated to have contracted by about 18 percent in 2020, with a gradual recovery projected to start in 2021. Tourism arrivals remain at a fraction of normal levels, and recent increases in COVID-19 cases in key source markets, including the US and the UK, will likely delay the recovery. In addition, a recent outbreak of COVID-19 in Barbados led to an ongoing lockdown that will reduce economic activity in the first quarter of this year.
“In this very challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program, while expanding critical investments in social protection. Key indicative targets for end-December under the EFF were met. International reserves, which reached a low of US$220 million (5-6 weeks of import coverage) at end-May 2018, increased to more than US$1.3 billion at the end of 2020.
“Strong steps have been made in implementing structural reforms. A new central bank law, aimed at strengthening the autonomy of the bank while limiting the provision of credit to the government, was adopted by parliament in December 2020. An actuarial review of the civil service pension system was completed in November 2020, providing the basis for upcoming public pension reform. A new procurement law to strengthen the fairness, integrity and transparency of the procurement process is expected to be submitted to parliament in February.
“The team is looking forward to conducting discussions for the fifth review under the EFF in May and would like to thank the 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
The blogmaster invites you to join and add value to the discussion.