But stressing that raising funds alone would not correct the island’s economic challenges over the long-term, President of the Barbados Economic Society (BES) Jeremy Stephen also insisted that even as the island attracted offers to help raise needed financing, one of the biggest problems facing the Government was structural inefficiencies.
His comments came on the heels of a recent offer by British billionaire Andrew Stewart and his business partner Stuart Fordham to help the Government raise the money through floating bonds on the international capital market.
“There is a member of the Society that made this argument, and I agree with it – if a major part of the $2 billion was targeted towards, let’s say, recapitalizing the NIS as opposed to just going into recurring expenditure like the paying of wages and to pay statutory corporations and other transfers and subsidies,” Stephen said in an interview with Barbados TODAY.
“If it is not going towards the NIS then it is a wasteful exercise. It, however, would not be wasteful if we put it in investment-driven vehicles such as the NIS,” he added, agreeing that there would also need to be some structural changes within the NIS, including greater transparency.
Stephen said he believed as the economy continued to struggle there would be more offers coming to the fore.
However, he stressed, while there needed to be some “valuable investments” into projects that could provide some “meaningful return” for the country, there also needed to be structural improvements across Government.
“It comes down to inefficiencies in Government; it comes down to decision-making; it comes down to how we make policies. Those things can only be fixed if we have the right policymakers that can see past five years,” he said.
“So no amount of [money] can come in and change that overnight. It starts with people at the top willing to make the right structural decisions and make the right long-term decisions. The right short-term decisions could seemingly be fixed [with] $2 billion, but we could end back into another problem two years from now if we don’t fix what got us here in the first place, which is structural inefficiencies.”
Stephen also warned that it was “more than likely” that the country’s debt rating would further deteriorate if the Government was not able to manage its debt.
“No matter what the Government says in terms of our economy turning over, our debt rating is heavily predicated not only on our economic performance but on how well the Government is managing its finances,” he added.
The economist also suggested that the Government continue to make investments in areas such as the renewable energy industry that could help cut costs in the long-term.
And he added that while many would consider tourism and international business to be “low-hanging fruits”, in terms of investments over the short-term, he said the next best areas to examine were construction and infrastructural projects.