Barbados PM says spending cuts coming
Prime Minister David Thompson says cuts in government spending are just around the corner.
Thompson said Sunday that he had already advised his Cabinet Ministers that they will be required to find ways to reduce expenditure in their various ministries.
“I believe that at some point shortly we would be approving that adjustment of expenditure,” said Thompson, who is also Finance Minister.
But he said that there are certain “critical policies that you have to continue to pursue because they enhance empowerment, which is an important contributor to economic activity or they may be socially necessary”.
The Prime Minister’s disclosure comes against the backdrop of a recent International Monetary Fund (IMF) assessment of the local economy in which it recommended a number of measures that the Thompson administration could implement to ride out the economic downturn.
Among those recommendations is to continue to moderate wages to lower the public sector wage bill, sell government assets, broaden the tax base and raise existing taxes.
Opposition Leader Mia Mottley said she was concerned about the state of the economy under Thompson’s management.
“Enough is enough. I don’t think the issues were handled appropriately. It is clear the Barbados economy is on a knife’s edge. If we slip, we will slide,” she told a press conference on Saturday.
“The precarious nature of where we stand today must be a concern to all Barbadians.”
But Minister of State in the Finance Ministry Darcy Boyce said on a local radio programme Sunday that the decline in the Barbados economy is not out of line with what has been happening in other parts of the world.
“This is not a case that things are being run in a way that is totally out of control. We have to make a choice – in this situation do you contract the economy so much by holding your fiscal deficit down….and call it a retrenchment economy or do you…keep people going,” he said.
In the meantime, Thompson said he remains hopeful of an economic turnaround late next year, while at the same time he acknowledging that may not happen fully before 2011.
“We would expect that towards the latter part of 2010 we will see some improvement for Barbados. One has to make the distinction between the improvement in the United States economy, the European economy and then what happens to Barbados because there will be a lag for as many as two quarters for Barbados,” he said, adding that government was “planning for the worst but hoping for the best”.