For­mer PM re­peats call for bas­ket of cur­ren­cies

Daily Nation (Barbados) - - News -

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’.

(Pic­tures by Ri­cardo Lea­cock.)

For­mer Prime Min­is­ter Owen Arthur mak­ing a point us­ing a flip chart on Wed­nes­day night.

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