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12 difficult days of Christmas
The Barbados currency has been pegged to the United States dollar at the rate of 2:1 for the last 40 years. Barbados has managed to retain this peg through some very rough periods weathering foreign currency crises in 1991 and after September 11, 2001. The country has developed a reputation throughout the region as being one of the strongest adherents to the policy of a fixed exchange rate.
But there is a point beyond which adherence to economic policies can become irrational, even doctrinaire. Last Friday, exactly 12 days before Christmas, the Minister of Finance in Barbados, along with his Cabinet colleagues, took the decision to send home 3,000 of the country’s public- sector employees by the end of March next year.
As a result of this decision, the lives of those 3,000 workers, their immediate families and their dependents (such as their ageing parents) will never be the same, as they stare financial uncertainty and potential vagrancy in the face.
The Barbados Cabinet decided to consign at least 15,000 of their fellowmen to misery because the country has on many occasions refused to even consider the possibility of a devaluation or depreciation of its currency.
As one banker said to me on Tuesday, for a Barbadian devaluing their dollar would be like burning their flag.
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