Creating a more efficient public sector
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in early December. This has helped to rebuild confidence in the country’s macroeconomic framework,” the mission leader said.
“The domestic debt exchange operation was finalised on November 19. The rapid completion of the domestic part of the debt restructuring has been very helpful in reducing economic uncertainty, and the terms agreed with creditors will help put public debt on a clear downward trajectory.”
Van Selm added: “A much-reduced Government interest bill will help create much-needed fiscal space for increased social spending and investment in infrastructure.”
The IMF official also noted that Government launched a programme to improve efficiency and reduce the public wage bill by laying off and retraining workers in the central government and public entities.
He said this “should help create a leaner, more efficient public sector, geared towards facilitating private sector-led growth. It should also help reduce central Government transfers to state-owned enterprises, from a level that had become unsustainably high”.
“In November, the authorities announced plans to modify the corporate income tax framework, seeking to unify rates that apply to the international business sector and local enterprises. There are some risks to this reform, including making corporate income tax revenues more dependent on maintaining international competitiveness,” van Selm added.
Commenting on the structural benchmarks Barbados is to meet by the end of this month, he said: “In October, a regulatory sandbox for fintech start-ups was created to allow them to try out new technologies in a well defined and controlled space. Legislation to facilitate a more efficient process for providing construction permits is under way, as is legislation to support a more efficient budget process, and stronger oversight of SOES.” ( SC)