Noted university Professor of Economics and Finance Justin Robinson is pleading with multilateral organisations to do more to help Barbados and other struggling tourism-dependent economies in the Caribbean as they continue to battle the impact of COVID-19.
At the same time, he said he fully supported any borrowing by the Government at this time to put measures in place to help the country and its residents cope with the pandemic.
“I fully support what he Barbados Government is doing in seeking to engage in borrowing in various creative forms to have a robust counter-cyclical response, but the simple reality is that as small island developing states – tourism-dependent and vulnerable – the fiscal responses and monetary policy responses we can mount are simply inadequate,” said Robinson.
He was delivering remarks during the 50th anniversary celebration of the Barbados Public Workers’ Co-operative Credit Union Ltd (BPWCCUL) at the Hilton Resort last Friday night.
The University of the West Indies (UWI), Cave Hill Campus professor argued that the region was unable to find financial resources to implement adequate fiscal measures “of the scale that is required to protect productive capacity, to protect life and limb and maintain social order and integrity”.
He said while the multilateral institutions were engaging some countries in massive monetary and fiscal stimuli to help them mitigate the economic fallout associated with the COVID-19 pandemic, this did not include Barbados and most other Caribbean states because of how they were classified.
“In many cases, Caribbean countries, based on per capita income, don’t fit into the low-income brackets where they are offering debt relief and many of these low cost financing options. I am of the view that this is a crisis we did not create but we have a part in it. The multilateral institutions have an obligation to act more boldly to assist our economies at this time,” said Robinson.
Insisting that travel and remittance dependent economies in the region needed some temporary access to concessionary financing and debt restructuring options from the multilateral institutions, Robinson said this was especially critical if they were to continue to fund health care responses and ensure adequate social protection.
The researcher suggested that multilateral institutions could, in conjunction with countries, come up with “some sort of vulnerability index that acts alongside their traditional per capita income, in terms of defining the countries that can benefit from this type of assistance”.
The Mia Mottley administration was forced to negotiate some of the benchmarks of its IMF-funded Barbados Economic Recovery and Transformation (BERT) programme, invest heavily in the health care system and provide assistance to various social services and sectors to help them get through the pandemic.
Robinson said with the possibility of another lockdown, there was no way Barbados was in a position to continue funding an appropriate fiscal response to deal with that.
“The multilateral system would have failed Barbados and the Caribbean who have been loyal members of that system, if they did not find the creativity, the ingenuity and flexibility to provide major concessionary finance and support windows as we face this once in a 100-year crisis that Caribbean countries did not create
“Caribbean countries have [been] deemed among the more disciplined aspects of the global community; hence, we have escaped, to date, the worst aspects of the health crisis, but given our travel and remittance dependence economies, we are at the epicentre of the economic crisis. We cannot get through it on our own intact, and we need that support from the multilateral system,” he said.