By A. T. Freeman
Recently, Kevin Greenidge, the IMF’s Barbadian born economist, who has been seconded to the Barbados government to oversee its IMF-approved structural adjustment programme, gave an interview to local media in which he attempted to spread disinformation on behalf of the IMF.
Further Government Borrowing
Speaking to a local TV station, Greenidge praised the government’s IMF-approved Barbados Economic Recovery and Transformation (BERT) structural adjustment programme. He credited it with bringing down the interest rate at which the government could borrow from over 10% to 1% and with achieving the build-up of the country’s foreign exchange reserves from $420 million in 2018 to over $2.6 billion by the end of 2020. This represents an increase in funds to cover imports from 6 weeks in 2018 to 9 months by end of 2020. However, the IMF spokesman had to admit that this increase in the foreign exchange reserves was solely the result of further government borrowing. This is rather ironic given that the main justification presented to the people of Barbados for putting the country into the hands of the IMF, with all the associated attacks on their social and economic rights, was that previous governments had borrowed excessively. In fact, according to the Central Bank’s January 2021 annual review, the country’s debt to GDP ratio had risen to 144% at the end of 2020, as compared to 120% at the end of 2019.
Addressing this scenario, in which the country is being bled dry by indebtedness and in which governments are borrowing new debt in order to repay old debt, Greenidge simply declared that, “Every developing country must borrow”. With this casual remark, Greenidge attempts to legitimise the plunder of the economies of the oppressed countries by the international financial oligarchy who enslave these countries with private debt via the so-called multilateral lending institutions. It is an unjust system in which the IMF itself plays a central role as a key enforcer. Its job is to ensure the “sustainability of the government’s debt”. In other words its mission is to make sure that the government is able to hand over its payments in a timely and reliable manner and to prioritise these payments over spending on the pressing needs of the people of the country.
Further elaborating on the IMF’s neo-liberal dogma about the economic management of a country, Greenidge declared that it is the ‘private sector’ that must lead the effort for economic growth. With regard to the role of the government and the ‘private sector’ in the economy, he declared, “Government don’t get growth, Government creates a conducive environment for the private sector to invest and the economy to grow”. In the next breath, Greenidge called for the country to diversify its economy away from its extreme dependence on tourism and, in particular, to develop the agricultural sector in order to achieve food security. T
The dysfunctional character of the Barbadian economy, which has been inherited from its historical role as a single crop sugar producer for Britain’s imperial economy, has been fully exposed by the Covid crisis. The collapse of the tourism sector has seen unemployment shoot up to around 40% and the National Insurance Scheme (NIS) has announced that it has completely depleted its unemployment fund and this will need to be recapitalised. The only option in this direction will be through further borrowing.
Agricultural Production Deserted
The current predicament of the working people in Barbados is the direct result of the ‘private sector’ being in control of the economy. It is this private sector which transitioned the country from a single crop sugar producer to a single crop tourism destination. Under the banner of turning the country into a ‘services economy’, they deserted agricultural production and turned agricultural land into golf courses and luxury villas while neglecting any effort to diversify the economy. Today the private sector and the various governments that have served them over the years have turned the economy into one based on tourism, which produces hardly anything it consumes and imports practically everything it needs. This arrangement suits the international and local private sector who own the hotels and the import companies but it doesn’t suit the people of Barbados, who can’t agree to Greenidge’s call that this needs to be the country’s future.
Finally, in his effort to prettify the IMF, Greenidge resorts to statements that are quite simply false. In the interview, he declared that, “…the IMF was not in the business of telling countries what to do but would simply put forward the available options”. In fact the opposite is the truth and the IMF is very much in the business of telling governments what to do. The very fact that Greenidge is embedded in the Barbados government as an ‘economic adviser’ from the IMF is evidence of this. Further, the IMF’s conditionalities are well known and a quick look at the agreements between the IMF and the government of Barbados will prove this beyond any question. There are various targets set out in these documents that the government of Barbados has to achieve varying from new legislation governing the ‘independence’ of the Central Bank of Barbados to the privatisation of state owned enterprises. The agreements even specify what type of information the government must report to the IMF and at what frequency.
The IMF and the government can continue the charade that the BERT is a ‘home-grown’ structural adjustment programme with IMF support but the reality tells a different story. In fact, it is the IMF which calls the shots and it is the government of Barbados which has to achieve the targets. At the heart of the BERT, just as with any IMF programme, is the aim to worsen the conditions of the working people, so that the wealth their labour creates can be diverted into the pockets of the ‘private sector’ and the moneylenders. So far, in order to meet its BERT targets the government has, among other things, sacked over 1000 public sector workers, increased the flat rate bus fare by 75% and introduced a garbage and sewage levy of around $45 per month.
Disinformation about the IMF won’t wash. The challenge facing the working people of Barbados is not just to get the IMF out of the country but more importantly to wrestle control of the economy out of the hands of the private sector and bring it into their own hands since they are the ones whose labour creates the wealth that everyone relies on.