“This is not the first occasion on which we’ve had to traverse this treacherous terrain. Between 1973 and 1975 on the occasion of the first oil crisis, Errol Barrow was Prime Minister and we faced one of these same economic downturns – unemployment in Barbados was 22.5 per cent in 1975 and inflation was running at 40 per cent,” Stuart said at the St. Luke Anglican Church where members and supporters of the ruling Democratic Labour Party (DLP) gathered for the Errol Barrow Memorial Church Service.
He told the congregants that while the country was facing some challenging times, “as Christians it is important that we rely not only on our work, but our faith”.
The government has already indicated that it would retrench as many as 3,000 public servants as it seeks to reverse the ailing economy and Prime Minister Stuart recalled that in the 1980s the International Monetary Fund (IMF) had to be called in with the country facing a fiscal deficit of nine per cent of the gross domestic product (GDP) and a five-fold increase in the current account.
“Thousands of people had to be laid off, but Barbadians got out of that. If we got out of that, we are going to get out of this,” he said.
He said the IMF also had to lend support to Barbados in the early 1990s when the island had to deal with the global recession, recalling that the country held only two weeks of foreign reserves cover.
He told the congregation that the standard for countries like Barbados is 12 weeks, and that at present the country has approximately 15 to 16 weeks of foreign reserve coverage.
“The difference between those three recessions and this one is that whereas each of those recessions lasted for about two years almost, this one is five years and counting.
“The wealthiest countries in the world are having the same difficulties that Barbados is having,” he said, adding “there are challenges related to growth in the United States, United Kingdom, France, Italy and all over the place”.