Disclaimer: The views and opinions expressed by the author(s) do not represent the official position of Barbados TODAY.
by Anthony Wood
The current public discussion on Barbados’ debt and the country’s ability to service its debt through to 2029 is healthy for the citizens of Barbados.
The fact that views are contending is refreshing given that the presentation of economic and financial information to the public has been largely one-sided in recent times.
It is unfortunate that the focus has been on the IMF debt of 928 million dollars to be repaid by 2029 rather than the total external (and domestic) debt.
However, with Government’s Senior Economic Adviser, Dr. Kevin Greenidge, trying resolutely to convince Barbadians that servicing the IMF loan is no problem, the government is most likely implicitly preparing the minds of Barbadians for the administration entering a new programme with the IMF in order to access “cheap money” as Dr. Greenidge likes to say.
In relation to servicing the IMF debt, Dr. Greenidge chooses to use the very crude measure of debt service payment as a ratio of tax revenue dollar as an indicator of the country’s ability to service its external debt. This is a very simplistic and misleading measure since external debt obligations are met through internationally-traded currencies and not Barbadian dollars.
It is well known that the debt servce payment as a ratio of foreign exchange is the appropriate measure to use when assessing a…
