Sunday, June 22, 2014 | 10:09 AM
BRIDGETOWN, Barbados (CMC) — There is no immediate danger of the currency being pushed below its present value although other economic indicators are sliding, says Clyde Mascoll, the opposition Barbados Labour Party’s (BLP) spokesman on finance.
“In spite of the fact that we were having a fiscal crisis problem, and we continue to have one; in spite of the fact that our economy has not been growing for the last six years; in spite of the fact unemployment has been rising, the one economic indicator in Barbados that was positive for the last six years was the adequacy of the foreign reserves at the Central Bank,” Mascoll said recently.
He added: “If we can get the fundamentals right and do other things and get the policy prescription right, then we should not even be using the word [devaluation] in Barbados”.
These comments from Mascoll, came at the same day other economic pundits were pointing to increased difficulty in obtaining foreign exchange from the Central Bank and a continued slide of the economy behind those of the CARICOM region.
Disputing a government minister’s claim that there is no problem for individuals and companies obtaining money for overseas transactions, immediate past president of the Institute of Chartered Accountants of Barbados, David Simpson, claimed that a squeeze on foreign currency access is on.
“I’ve heard some denial from one Cabinet minister this week, but I have experienced it, and one or two of my clients have as well,” Simpson said.
While speculating that the current difficulty in obtaining foreign exchange might be a case of the Central Bank strictly applying an old Barbados policy on release of such funds, Simpson insisted that the restrictions are now in place regardless of the reason.
“I can tell you it is the case, which suggests there is still some concern in terms of the foreign exchange reserves,” he added.
With no conventional natural resources in significant quantity, Barbados depends on earnings gained through licensing offshore companies, tourism, and a small manufacturing export industry for its foreign currency.
The Central Bank reported that as of March, 2014, the island’s foreign reserves stood at BDS$1.1 billion (Bds $1.00 = US$0.50) that covers 16 weeks of imports.
Also on that day, leading investment banker, Jason Julien, spoke of a need to ring ‘alarm bells’ if there was not economic improvement.
He spoke of the island’s weak economic growth, high debt levels, weak foreign exchange earnings, and its susceptibility to external shocks.
“When we look at the Barbados economy compared to the rest of the region as a whole, the reality is we are lagging behind at this point…The average growth rate expected for Barbados is 0.6 per cent, and when you look at the Caribbean as a whole, it exceeds that,” said Julien.
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No devaluation threat to the dollar, says Barbados opposition Finance Spokesman
