CARIBBEAN neighbour Barbados going to the International Monetary Fund (IMF) can have consequences for TT and local businesses, says Prime Minister Dr Keith Rowley.
He was speaking on Thursday at a People’s National Movement public meeting at the Barataria Community Centre as part of the campaign for the July 6 by-election for Barataria and Belmont East.
“Barbados announce that they in deep trouble. Barbados on the way to the IMF. And for those of you who don’t understand – Barbados is not alone in that matter. We are there with them. Barbados’ success is our success and Barbados’ pain is our pain.”
He said in the first week of the new Barbados government, Prime Minister Mia Mottley announced the country was going to the IMF and would restructure the economy.
“We have to wait now and see what are the conditionalities of that restructuring. But the government has already announced a default. They can’t pay their debt in handling their commercial arrangements in Barbados.”
He said Government will have to tell citizens about the exposure of TT’s businesses to the conditions that will apply in Barbados.
“And it will have serious consequences for us depending on how serious it is over there.”
Rowley said TT was receiving more taxes from the non-oil sector, but some of these non-oil businesses may be exposed in Barbados in some way and may not be in a position to improve their productivity moving forward.
“Some of them might in fact see some significant retraction.
“So just as we thinking we are getting the benefit of increase from non-oil taxes it might very well be that we have exposure there.”
He said he did not want to talk much about the situation as it had to be examined to determine what the exposure was “because our economies are in fact intertwined.”
Rowley said Government had been criticised for focusing too heavily on the energy sector but if the problems in the sector had not been fixed, the country would have had little chance of avoiding the IMF and be on a path of prosperity in the medium term.
He said increased revenues did not mean the country was going to splurge.
“It was good news to hear the numbers are better and we are going in the right direction.
But that is not a licence to let loose the ‘gimme gimme gang.’ And I want this and I want that and I want more of this and I want more of that. What we are doing is closing the gap between our revenue and our expenditure.”
He said there were those who encouraged Government to devalue the dollar.
“Who tell you it would have been better? What I guarantee you is it would have been far worse. The cost of everything would have gone up.”
He said a devaluation would have especially affected those at lower income levels.