BRIDGETOWN-Managing director of the International Monetary Fund (IMF) Christine Lagarde has suggested to Barbadian authorities that a devaluation of the Barbados dollar would make the country's tourism more competitive and help its economy to grow.
According to a recent press statement issued by the Central Bank of Barbados (CBB), this suggestion was made to the bank's governor Dr DeLisle Worrell as he attended a recent breakfast meeting with the fund and the president of the World Bank.
However, the island's chief economist shot down the IMF head's suggestion, pointing out in the statement: "To most of us in the Caribbean, it does not seem rational to impoverish yourself to grow your economy. To us, it is obvious that is what devaluation implies."
Governor Worrell acknowledged this point was not so obvious to Americans and Europeans. He pointed out that in a recent publication that was distributed during the IMF annual meetings in Tokyo he explained why things appear so differently from the point of view of small open economies.
In light of recent Barbados media reports that portrayed the exchange between Worrell and Lagarde as a contentions exchange, the CBB head took pains to disabuse the public of that notion in the statement.
"The breakfast meeting of the managing director of the International Monetary Fund and the president of the World Bank is a private meeting with ministers of finance and governors of central banks of the Caribbean, at which no press are present and no record is taken for public circulation.
It is unhelpful if such private exchanges, offered in the search for better understanding among the parties, are made public, creating an impression of conflict where none exists," said Worrell in the statement.
"The Caribbean values very highly the opportunity that the International Monetary Fund and World Bank provide us, to air our concerns in frank and open discussion.
In correspondence after the breakfast meeting, I reassured Madame Lagarde that, like my colleagues in the region, I am highly appreciative of the initiatives that the International Monetary Fund and the World Bank have undertaken to focus on the concerns of the Caribbean and other small nations. Madame Lagarde sent a gracious response confirming her commitment to the ongoing relationship," stated the CBB governor.
Caribbean360