Former PM repeats call for basket of currencies
Former Prime Minister Owen Arthur believes it is in Barbados’ best interest to stop worshipping a false god.
Making reference to the 2-1 peg to the United States (US) dollar, Arthur said that just as Barbados moved away from its peg to the British pound when it ceased working in the interest of the island, the time had come to do the same with the US peg.
According to him, Barbados has reached the stage where it can only contemplate a viable growth if it begins to address the issues in respect of the exchange.
His comments were made during an address to a packed audience at a forum on Economic Challenges In Barbados And You on Wednesday night at the University of the West Indies.
Arthur suggested following the Singapore model and have a “basket of currencies” to which the dollar is pegged.
“I have constructed a basket of currencies drawing upon the US, British pound, Euro and Canadian and we can do what Singapore did, because if we do not do that at a time when we have to increase private foreign capital and increase exports and decrease imports, our economy’s growth prospects will be left to [United States president Donald] Trump,” he said.
‘Work in progress’
Charging that the home-grown International Monetary Fund programme, which he called a “work in progress” could only “at best” stabilise the economy, the former Prime Minister said the economy was in need of a “grand design” for economic and social development to take place.
“I’m not saying that to scare you. The US dollar is getting stronger and stronger against other currencies because the British pound and the European currency are weak because of Brexit, and as the US dollar gets stronger and stronger it becomes more expensive for people to come here or to invest in Barbados . . . I want to suggest to you that the time has come that we stop worshipping the exchange rate. A country’s economic policies just can’t be to say ‘let us protect an exchange rate’.
Former Prime Minister Owen Arthur making a point using a flip chart on Wednesday night.