A complete overhaul of the country’s public services remains the key to sustainable future growth.
So says former Central Bank Governor Dr. Delisle Worrell in his July Economic Review where he gave suggestions on how the country could see some improvements in the economy going forward.
He said the need for public services that are led by “executives of proven ability and manned by highly skilled staff” has been highlighted by the Covid crisis.
“A change of the scope and magnitude required is beyond the capacity of our Government and the agencies providing finance and advice to the Government. The skills of a world-leading firm of management consultants is required.”
Dr. Worrell reiterated that in order to reverse the decline in Barbados’ competitiveness, a 21st century public sector is needed.
“The things that have attracted investment to Barbados in the past are the good quality of roads and infrastructure, efficient up-to-date public utilities, good health and educational facilities, a highly skilled and trainable labour force, and macroeconomic stability. The country’s performance in every one of those areas has been compromised because of the continuing decline in public sector performance, over decades.”
He also pointed out that there is a chronic shortage of finance for multi-million dollar public works programmes which are urgently needed in the country. It was posited that a resurgence in private foreign investment, crucial to the economy for the foreign exchange it brings, can be confidently expected when financial markets fully regain confidence in Government’s economic policies.
“There will then be no shortage of foreign investor interest in well thought out projects that offer competitive returns on investment. ”
“However, there is a shortfall in finance for public investment, in sewerage, water supply, sanitation, public transport, the QEH, roads and other infrastructure and equipment.”
He opined that Government’s declaration of a debt moratorium in June 2018 was a severe blow to the confidence of foreign investors, and the heavy restructuring losses suffered by banks, insurance companies, credit unions, companies and individual bondholders have evaporated the appetite for Government debt.
“Government is therefore entirely dependent on the IDB, the CDB and friendly foreign government agencies to fund its capital works and purchases of capital goods.”
It is in these circumstances, Dr. Worrell states, the sensible alternative for upgrading the port and the airport is to secure long-term lease agreements with carefully-selected major global players, who might have an interest in developing the capacity of the port and airport to a high international standard as part of their global network. Such companies would bring their own sources of funding, as well as a large increase in through traffic.
The former Central Bank governor also made a call for Government to create a tangible document with a practical strategy, action plan, deadlines, monitoring and reporting, for replacing fossil fuels with renewables.
“Barbados is squandering an opportunity to gain energy independence by its failure to devise and put in place an actionable 15-year strategy for renewable energy. To ensure its success, the renewables strategy should be actively co-ordinated by a high-level committee led by the Prime Minister. Such a strategy would set clear objectives for the proportion of electric generation by wind, solar, waste-to-energy and bio-fuels by 2035, and for the proportion of vehicles, machinery and other fuel uses to be converted to renewable sources. The strategy would have five three-year benchmark progress evaluations, involving all stakeholders, to make course corrections when and where necessary, to ensure the 15-year goal is achieved.
“Renewables are the energy of the future; the use of renewables saves us considerable foreign currency, making it the equivalent of a second export sector of considerable weight. Equally important, it frees the country of the uncertainty and instability due to oil price fluctuations.”
“However, a 100 per cent renewables target is out of reach for the foreseeable future, because BL&P has been obliged to install a new 33MW plant that runs on fossil fuel, in order to stabilise the grid. That plant probably has a 30-year life span. Moreover, only a tiny fraction of vehicles imported in recent years is fully electric, and most of the petrol and diesel engines imported will still be in use in 2035 and beyond,” he said.