This year, 2021, was sent to remind us that if we want to preserve Barbadian pride and Barbadian independence, if we are to roll with every punch thrown at us, respond to every challenge, sir, we must continuously sow, nourish and expand our resilience, including fiscal resilience. We must plant and we must build, for the Bible teaches us in Ecclesiastes, that there is a time and season for everything.
[00:22:27]The truth and fact is, Mr. Speaker, we were lucky. COVID, Soufriere and Elsa, the freak storm did not strike us at the end of that lost decade of 2008 to 2018. Could you only imagine if we had to face all three of them before having the opportunity to save the Barbados dollar? Could you imagine? What would have been the fate of this nation and the people of this nation if we had to confront these challenges, Mr. Speaker, before we had the opportunity to restructure our debt, to deal with the arrears and the payables and to save the value of the Barbados dollar.
[00:23:13]Mr. Speaker, Barbados was being strangled then by high and costly debt, failing infrastructure that I don’t need to spend time reminding you of this evening. And a flight of capital. Servicing the debt alone, paying interest and paying back due debts took up 68 cents in the dollar. I well remember the speech by the then Prime Minister, the Right Excellent Owen Seymour Arthur, as he spoke at the end of this front bench, reminding us that this country could not carry that level of debt service and that we needed to action, to take action urgently because what was left was 32 cents, Mr. Speaker, to run our schools and our clinics, to defend this nation through our borders and within the borders through police, to deal with our hospitals, to fix roads, to deal with drainage, to buy buses, to stop the sewage, to buy garbage trucks, to pay wages and to pay pensions. And many, many more things. Thirty-two cents in the dollar was all that was left and hence the determination of this government that its first responsibility was to work with the social partnership and the people of this nation to save the value of the Barbados dollar and to restructure our debt.
[00:24:37]Mr. Speaker, there was no room to breathe and invest in the future, far less to respond to any new challenges. Creditors saw the writing on the wall and the unscrupulous circled and demanded a high premium; 11% interest rate to lend Barbados money in 2017 because of what was then a high risk status. And on top of that, we had what has now come to be called adversarial financing. In other words, not paying your debts. Adversarial financing; that saw a significant build up of arrears from nothing in 2008 – no arears is in 2008 – to almost $2 billion by the time we took over the government in 2018.
[00:25:25]2021 taught us, Mr. Speaker, that we must always have gas in the tank – reserves and a plan. Our Girl Guides and Boy Scouts know that, and it is time that we know it as a country and as a government – always be prepared.
[00:25:52]Mr. Speaker, that three weeks of import cover could have carried us nowhere. Today after the worst of COVID, the worst of Soufriere, the worst of Hurricane Elsa and the freak storm, the governor of the Central Bank has advised me this morning that Barbados’ reserves stand at three billion and $58 million on the 11th of March of this year. That is the equivalent, Mr Speaker, I’m told, of 40 weeks of import cover from the dread three weeks that this government inherited. That we have achieved this in spite of all of the challenges to which I have referred, is a signal attribute to be enjoyed not by the Government of Barbados, but by the people and nation of Barbados.
[00:26:48]Mr. Speaker, we built that war chest at a good pace, yes, through some long-term, low interest official borrowing. But the difference was was that nobody was lending to the last government and there is not a single country in the world today that has gotten through the pandemic without borrowing, not one single country.
[00:27:10]What is the difference, sir? That our interest rates at which we borrow today to get us through this period, in the last four years, just shy of four years, have been at 1%, 2% and 4%, not the 11%, 12% and 14% of the last government. We have not borrowed at interest rates that would kill the children of this nation. [25.8s]
[00:27:38]I understand, sir, that when you step back from the brink, talking of building defenses is not exciting to some people. But in this new world, in this era in which we live, this is how a responsible government shields people from whatever the future may bring.