In a victory unprecedented in Barbados’ political history, the opposition Barbados Labour Party (BLP) led by Mia Mottley, took all 30 seats in the island’s General Election on 24 May.
Despite the landslide, the election was widely regarded as one of the dirtiest in Barbadian history, featuring accusations of corruption and incompetence, vote buying, and the use of social media to promote misinformation and to make personal, misogynistic and homophobic attacks on candidates and their policies.
Less than 48 hours after her election victory, Prime Minister Mottley was meeting with the Governor of the Central Bank, the Director of Finance and Economic Affairs and the Director of National Insurance, and subsequently with representatives of civil society to consider how best to respond to the dire economic situation that her government inherits.
Speaking shortly after taking office she said that as a matter of urgency she had put in place a team to obtain a clearer picture of the true state of the Government’s finances. She also noted that it was her government’s intention to not just stabilise Barbados but to transform it. She said that her government would do a disservice to the island if it did not provide opportunities for the country’s young people. Noting that the island now needed a consensus to move forward, she said she would meet with social partners on a regular basis to get “mission critical issues right”.
Mottley, the first woman to head a government in Barbados, said that she would be holding ministers to “very high standards of efficiency and productivity” and that she had structured her Cabinet in such a way as to embrace new concepts and initiatives. She also indicated that she hoped to reform the Constitution to allow the opposition Democratic Labour Party (DLP) to name two persons to the Senate.
Prime Minister Mottley has named a 26-member cabinet as the following:
- Prime Minister of Finance, Economic Affairs and Investment – Mia Mottley
- Attorney General and Minister of Legal Affairs – Dale Marshall
- Minister of Education, Technological and Vocational Training and Leader of Government Business – Santia Bradshaw
- Minister of Housing, Lands and Rural Development – George Payne
- Minister of Foreign Affairs and Foreign Trade and Leader of Government Business in the Senate – Senator Dr Jerome Walcott
- Minister of International Business and Industry – Ronald Toppin
- Minister of Environment and National Beautification – Trevor Prescod
- Minister of People Empowerment and Elder Affairs – Cynthia Forde
- Minister of Tourism and International Transport – Kerrie Symmonds
- Minister of Transport Works and Maintenance – Dr William Duguid
- Minister of Health and Wellness – Jeffrey Bostic
- Minister of Home Affairs – Edmund Hinkson
- Minister of Small Business, Entrepreneurship and Commerce – Dwight Sutherland
- Minister of Energy and Water Resources – Wilfred Abrahams
- Minister in the Ministry of Finance – Ryan Straughn
- Minister in the Ministry of Economic Affairs and Investment – Marsha Caddle
- Minister in the Ministry of Foreign Trade – Sandra Husbands
- Minister of Labour and Social Partnership Relations – Colin Jordan
- Minister in the Ministry of Housing, Lands and Rural Development – Charles Griffith
- Minister of Youth and Community Empowerment – Adrian Forde
- Minister of Maritime Affairs and the Blue Economy – Kirk Humphrey
- Minister of Agriculture and Food Security – Indar Weir
- Minister in the Ministry of Transport Works and Maintenance – Peter Phillips
- Minister of the Creative Economy, Culture and Sports – John King
- Minister of Innovation, Science and Smart Technology – Senator Kay McConney
- Minister of Information, Broadcasting and Public Affairs- Senator Lucille Moe
Justifying having such a large cabinet, Mottley said: “Given the dire state of our economy and the tremendous work that will be involved in rescuing and rebuilding this country, the salaries of a few extra ministers are insignificant, given that there will be extra savings from the containment of wastage and the curtailment of corruption in my Cabinet.”
However, the decision to have the vast majority of her parliamentary party in her cabinet was seen by some local commentators as reflecting the need for the Prime Minister to manage significant internal differences within the DLP.
IMF report reveals dire state of economy
Meanwhile it has become clear that Barbados’ economic situation is so serious that its fixed exchange rate of BD$2 to US$1 could be in jeopardy. As one of her first acts, Ms Mottley released the IMF 2017 Article IV report which the previous administration had all but suppressed. It revealed deep concerns about inappropriate fiscal policies, the poor implementation of reforms, and declining confidence contributing to the island’s large fiscal deficits, high debt, and low foreign exchange reserves.
The IMF stated that despite government actions to reduce the deficit, ‘weaker than expected revenues and budget implementation slippages suggest that the deficit is likely to remain significantly higher than planned with correspondingly large funding requirements’. It noted too that debt remained unsustainable and falling international reserves suggested new vulnerabilities.
It also advised against the Central Bank printing money to fund Government as this could erode reserves and jeopardise the country’s exchange rate peg.
Commenting on the challenge now facing the new Barbados government, noted Caribbean economist Marla Dukharan said that it will come under pressure to cut wages and salaries, as well as state subsidies to a number of entities if it is to avoid a balance of payments crisis.
“They are going to have to stop the haemorrhaging of foreign reserves because right now reserves are, in my estimation, just around US$200m, which is about five weeks of imports, and with rising oil prices and then the US$60m payment to Credit Suisse due by the end of the month, you are looking at a very close to balance of payments crisis”, she said. Dukharan added that the government must now somehow shore up reserves and stem the outflow of US dollars.
At the end of March, official figures showed that foreign reserves stood at Bd$423m, enough to cover 6.9 weeks of imports, with debt reaching 151% of GDP.
Social partners agree on need to preserve value of BD$
Aware of the political challenge the new government faces in turning the economy around, Mottley met on her first working day with members of the country’s Social Partnership, which brings together most civil society groups including the associations representing the private sector and trades unions.
In a subsequent press release, the Prime Minister said the Social Partnership was in full agreement that the value of the Barbados dollar must be protected at all cost: “I believe that we are all agreed on our efforts to stabilize the country …. What I can say clearly is that all of us are absolutely sure that we have to maintain this fixed exchange rate and the preservation of the value of the Barbados dollar”. Mottley also promised to release more details on plans for rebuilding Barbados’ economy.
Speaking after the meeting the Chairman of the Barbados Private Sector Association, Charles Herbert said: “We are very satisfied, and we are very impressed with the urgency which matters are being dealt with.”
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