The acquisition of a staggering US$56 million [$112 million] loan from the International Monetary Fund (IMF) risks leading Barbados into a ‘financial prison’ masquerading as a ‘five-star hotel’, warned Leader of the Opposition Ralph Thorne.
His statements followed the IMF’s announcement that Barbados had met its performance benchmarks under the Extended Fund Facility programme. While the achievement may be praised by government officials, Thorne questioned both the assessment and its alignment with the realities faced by Barbadians.
“The IMF assessment of Barbados’ position seems out of joint with the lived reality of Barbadians. The IMF statement fails to adequately address an internal dynamic in which the citizens are experiencing painful daily pressures of austerity,” he said, adding that the assessment “resonates with suspicious similarity” to the government’s Medium-Term Fiscal Framework presented in Parliament earlier this week by Minister in the Ministry of Finance Ryan Straughn.
“Both documents contain analyses that are seductively predictive and are existentially non-performative,” Thorne said, dismissing the optimism of the government’s fiscal outlook.
The opposition leader further raised alarm about the country’s increasing reliance on loans, suggesting that the latest agreement with the IMF “deepens Barbados’ perilous indebtedness based on chance assessment”.
He said: “When the IMF states that Barbados ‘met quantitative performance criteria, indicative targets and structural benchmarks,’ I remain of the view that this is macro-analysis that ignores the internal weaknesses such as high inflation, unsatisfactory levels of investment, poor sectoral diversification, excessively high energy costs, declining infrastructure, high crime, and consequential low national morale.”
He dismissed the idea that the loan signalled progress, cautioning instead that it could create lasting economic challenges: “To extend another loan is no cause for national celebration in an economy that is weak and woefully underperforming. There can be little optimism that we will be able to re-pay these loans on our present trajectory.”
He was unrelenting in his criticism of the government’s borrowing strategy, describing it as short-sighted and unsustainable.
Thorne told Barbados TODAY: “The government is walking Barbados into deep financial trouble in a self-confessed policy of borrowing as its main strategy towards economic growth. We continue to contend that the growth is inflationary and not real growth.”
He also noted the need for transparency in how loan funds are used, suggesting that the government’s failure to communicate this effectively only heightened public mistrust.
“It must also be of further discomfort to Barbadians that the government has been failing to publicly demonstrate the agreed use of the various loans,” he said.
Highlighting the dangers of extensive borrowing and his concern about the country’s economic trajectory, Thorne said, “I fear that this new loan may be Barbados’ walk into a financial prison that the government believes to be a five-star hotel. The future may yet reveal both to be very expensive accommodations morally and financially.”
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