Prime Minister Mia Mottley delivered a budget yesterday anchored to a transformation theme. The blogmaster agrees with Professor Justin Robinson’s summary of the budget with one addition. There was no serious mention of the plan to address the recapitalization of NIS.
See summary of Robinson’s budget review.
Robinson: Domestic market the target
GOVERNMENT IS SEEKING to woo the confidence of domestic investors once again, five years after the country underwent its debt restructuring exercise.
This was the takeaway of economics professor Dr Justin Robinson in his analysis of the 2023 Financial Statement And Budgetary Proposals delivered by Prime Minister Mia Amor Mottley in the House of Assembly yesterday.
Robinson, who was a panellist on the NATION’s State Of Our Nation’s post-Budget analysis, said Government’s announced $74.8 million partial repayment to 5 407 holders of Series B bonds, was in an effort to restore confidence in the domestic investment market.
During her four-hour presentation, Mottley said Series B bond holders who are on the register at March 31 will each receive $17 500 while 2 627 are being repaid in full.
Noting that the Prime Minister had not introduced new taxes to bridge the near $1 billion deficit, Robinson said it was evident that the plan is to finance the deficit through domestic investment and growth.
“Clearly the Government is deciding that it is going to go for growth and a lot of the initiatives seem focused along growth. Alongside growth, there were some measures and language that seem intended to encourage and entice domestic investors to provide the financing to close the gap.
“So there was no attempt to close the gap by new revenueraising measures or expenditure cuts. Instead, the Government has decided to financethe gap in this way by enticing the local investorsto come back because that’s where the uncertainty
in the financing is,” he said.
Robinson, the pro-vice chancellor of The University of the West Indies’ Board of Undergraduate Studies, said it is left to be seen whether the incentive will work.
“There was a whole section about reviving the domestic capital market. The repayment of the Series B bonds is one measure, and it is certainly feasible for the Government to make the payout. However, the unknown is whether that would be sufficient to induce investors to come back into the market in the quantity that they need in financing for the next financial year,” he said.
However, as it relates to Government’s growth strategy, he said it was lacking quite a bit of details.
“I was expecting some details on the reforms of the stateowned enterprises (SOEs), which was a central feature of the Barbados Economic Recovery and Transformation (BERT II) programme. In many ways those details were sadly lacking. We are not really significantly wiser about how that will play out. Additionally, because of the uncertainty with the domestic financing, I expected details on how Government was going to address this “The other issue was growth. How do we create some new growth catalyst to take the economy to a higher level? To her credit, the Prime Minister highlighted a number of possible areas that are new – stimulating a film industry, positioning Barbados as a logistics hub. The challenge I had is that they were quite short on details, they appear futuristic and we have to wait to hear the details,” he added.
Also expressing disappointment on the lack of details on the reform of the SOEs was general secretary of the National Union
of Public Workers Richard Green, who was also a panellist.
He said there was some indication that job losses were on the horizon.
“The Budget did not provide any specificities about the reform of those SOEs. Moving forward, it would be interesting from our end to see how that goes. Obviously, there is an indication in this Budget that there is high likelihood of some retrenchment in the SOEs. So there is more in this Budget that we need to see coming out within the new financial year,” Green said.
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