Proposals for a fourth version of the Barbados Economic Recovery and Transformation (BERT) austerity programme are set to go before ministers, Barbados TODAY can reveal, with Governor of the Central Bank of Barbados Dr Kevin Greenidge expressing confidence that bold investment can drive growth well beyond recent projections.
On Wednesday, during a news conference to review the country’s economic performance for the third quarter of this year, Dr Greenidge disclosed that the bank’s economic team had discussed a draft of the BERT 2025 programme with the Social Partnership.
But in an update to Barbados TODAY on the development, well-placed sources who spoke on condition of anonymity said on Friday, “(The economic team) have presented a draft of BERT 2025 to the Social Partnership and received feedback. This economic team is currently incorporating those comments, and the next stage is for it to go to Cabinet.”
After stabilising the economy and the government’s fiscal position, the new BERT will focus on transforming the economy, said the governor: “That now is about transformation… moving beyond where we are. That, as with BERT 2022, targets a five per cent rate [of growth]. That five per cent is predicated on investment. A few things go into growth. It is not complicated. We keep it simple. Labour and capital; and you can divide labour into the number of bodies and the efficiency of that, which equals productivity.”
BERT, the International Monetary Fund-backed homegrown strategy for economic stability, growth, and resilience, began in 2018 with Dr Greenidge then as an IMF advisor embedded in the government. Initially launched to address a debt crisis through fiscal consolidation and debt restructuring, it has since evolved into BERT 2022 and BERT 3.0.
The third version, with Dr Greenidge helming the Central Bank since March 2023, focused on transformation through economic diversification, digital innovation, and climate resilience.
The idea of BERT 2025 arose while Dr Greenidge was defending the bank’s medium-term projected growth rate of three per cent, in light of scepticism expressed by some rating agencies regarding its practicality.
He said: “You have to work on skills training, you have to invest in more people, and you have to work on matching skills and improving the quality. And investment — the amount of funds and money that you do invest in, and the quality of it — we are talking about using technology better, enhancing efficiency, digitisation of the economy, transferring renewable energy; those are what matter for growth.
“The capital expenditure is at least three or four times larger than it was last year. The target under BERT 2022 was, from government, five per cent of GDP. From the private sector, it was $2 billion by end-2026… and doubling in both cases. We will get growth of five per cent, if we invest. It is as simple as that.”
Dr Greenidge argued that while people are accustomed to hearing growth rates of two per cent and two-and-a-half per cent, a look at the bigger picture would show much higher growth rate forecasts, such as ten per cent for the Philippines and five to six per cent for some others.
“We have to get beyond this idea that two is a barrier. It is not a barrier. Two is only a barrier if we do not invest, if we do not take a chance on ourselves and if we do not create an environment where other persons want to invest… then two becomes our reality. But we can do five. I am confident of that.”
emmanueljoseph@barbadostoday.bb
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