Minister of Finance Chris Sinckler has made a strong plea to rich countries not to abandon struggling and highly indebted Caribbean states to the “wolves” of international financial capital systems.
In an address today at the opening of the Latin American and Caribbean (LAC) Debt Group’s 11th Annual Debt Management Specialists meeting at the Hilton resort, Sinckler named the International Monetary Fund (IMF) as one of the “wolves” that impose “visionless and impractical adjustment programmes” on indebted Caribbean countries.
While Barbados has not turned to the IMF for financial assistance, the Washington-based institution has influenced the Freundel Stuart administration’s austerity programme. At the end of its 2015 Article IV visit in early May, the IMF advised Government to continue cutting its wage bill and slash spending on social programmes.
“The burden of adjustment should fall more on current spending, which expanded by about 10 percentage points of GDP since the mid 2000s. The team encourages the Government to continue lowering the overall wage bill, which is one of the highest in the region, and reform the civil service to manage this transition. Review of social spending would be important, in particular by reducing the provision of free services and goods to high-income groups,” it said in a release on May 8.
The Minister of Finance told delegates attending today’s meeting that it was not enough for the international community to speak “almost despairingly” about the negative debt matrices, “as if pouring scorn on us for daring to pursue the development of our people and societies”.
“And it is certainly not enough to keep sending missions of sterilized technocrats and even academics to study the situation, and if we are lucky, publish a book to which we get entitled to a free copy. That’s not what the Caribbean needs. What we need is for the hemispheric and global community to act in a way demonstrative of their exclaimed but unrealized desire to help the region’s countries deal with the elephant in the room,” Sinckler said.
“Don’t just throw the zoo-keeper to the wolves of international financial capital systems such as the IMF for yet another version of the visionless and impractical adjustment programmes. Rather, grant us no less a favour than that which was given to the HIPC [Highly Indebted Poor Countries] during the 1990s.”
He said the region would consider anything less as an abandonment of small and vulnerable economies by the international community.
Pointing out that the Caribbean was perhaps one of the most disaster prone regions in the world, Sinckler noted that economies were “very open” to international trade and highly vulnerable to natural disasters and economic shocks.
He stated that while each country was still crafting fiscal and monetary policies aimed at reducing the debt repayment period, this should be done with the population in mind.
“We equally have to be mindful [that] the ever present reality of the constraints of small size, extreme vulnerability and limitation of resources that confront all of our countries, almost predictably dictates that we must incur both debt and deficit spending if socio-economic transformation is to occur in our spaces,” Sinckler said
At the same time he called for national and regional solutions to tackle the Caribbean’s debt situation, adding that the Caribbean Community (CARICOM) Commission was also devising a coordinated regional approach to seeking debt relief from the domestic, regional, and international creditors.
He acknowledged that individual efforts were likely to take “way too long and cost too much by way of human and environmental dislocation”.
The CARICOM Commission had concluded that the problems the region faced with this ever present constraint to growth could not be addressed effectively unless countries approached the international community as a single unit,” he reported.