With T&T has over 13,000 va­can­cies in its pub­lic ser­vice, and Bar­ba­dos is let­ting go about 3,500 pub­lic sec­tor em­ploy­ees, Bar­ba­dos Fi­nance Min­is­ter Christo­pher Sinck­ler has said his gov­ern­ment is open to mu­tu­al­ly ben­e­fi­cial co­op­er­a­tion in this area.

Af­ter he ad­dressed in­vestors gath­ered at the Port-of-Spain Mar­riott for an ANSA Mer­chant Bank event Wednes­day, Sinck­ler said: "In­deed, there are a lot of very skilled peo­ple in Bar­ba­dos. Of course, we have our cam­pus of the Uni­ver­si­ty West In­dies, and we churn out so­cial sci­en­tists of all sizes and shapes."

He said: "We're en­cour­ag­ing peo­ple to look for op­por­tu­ni­ties be­yond Bar­ba­dos and there are Caribbean ter­ri­to­ries that re­quire that skilled labour. A lot of skilled labour from Bar­ba­dos come here (to T&T). They go back and forth, and we are en­cour­ag­ing them to look for those op­por­tu­ni­ties."

Ear­li­er he had told in­vestors that while the Bar­ba­dos cen­tral gov­ern­ment em­ploys about 21,000 the over­all pub­lic ser­vice is about 25,000 strong. "Our goal is to bring the over­all pub­lic ser­vice down to about 20-21,000, which is re­al­ly where it should be," he said.

Asked if the is­land na­tion plans to is­sue any more bonds to boost its re­serves and re­fi­nance some of its debt, he said: "Not at this stage, cer­tain­ly not on the wider in­ter­na­tion­al mar­ket be­cause we feel the forex sit­u­a­tion has set­tled down. The re­serves are slow­ly build­ing back and so there is not an im­me­di­ate re­quire­ment to get to the mar­ket."

He added that in June, the Bar­ba­dos gov­ern­ment will be go­ing "on a fair­ly ex­ten­sive non-deal road show to meet with in­ter­na­tion­al in­vestors in Lon­don, Boston, Chica­go, New York, and then lat­er in the year, we will be go­ing fur­ther west."He said the Bar­ba­dos gov­ern­ment will be do­ing this "so that in­vestors un­der­stand what is re­al­ly hap­pen­ing, and our ef­forts to re­turn sta­bil­i­ty to the econ­o­my, and of course, to bring eco­nom­ic growth."

Turn­ing to ANSA Mer­chant Bank Man­ag­ing Di­rec­tor Gre­go­ry Hill, he added, "Of course, the T&T mar­ket is al­ways there. There are projects that we are do­ing with ANSA and with oth­ers."Hill hailed the present as an ide­al time to in­vest in Bar­ba­dos. He said: "If you be­lieve Bar­ba­dos is a strong econ­o­my in the medi­um to long term, you would see that the glob­al mar­kets clear­ly over-re­act­ed to some of the changes in the Bar­ba­dos econ­o­my."

He said glob­al in­vestors have a unique op­por­tu­ni­ty "to buy (in­to) Bar­ba­dos now at the right price" and in­crease their re­turns on their in­vest­ment be­cause Bar­ba­dos is a long-term vi­able econ­o­my.On Bar­ba­dos' tar­get for for­eign re­serves, Sinck­ler said: "Our tar­get for 2014 is rough­ly around 16 weeks of im­port cov­er. Any­where be­tween BD$1.1 bil­lion (US$550 mil­lion) and BD$1.5 bil­lion."

When re­mind­ed this is al­ready where Bar­ba­dos re­serves are at, he said: "Sure we're al­most there. The is­sue is to just keep it there. Our out­flows (of forex) match our in­flows, so that we don't have to tap in­to the re­serves. We can do all of our trans­ac­tions, and there is no rea­son to tap in, and that's where we want to be," he said.

Hav­ing men­tioned talks with the In­ter­na­tion­al Mon­e­tary Fund (IMF) dur­ing his pre­sen­ta­tion, he an­swered the ques­tion of whether Bar­ba­dos was look­ing to im­ple­ment an IMF pro­gramme like debt-bur­dened Ja­maica: "Not a for­mal pro­gramme but we have a very good col­lab­o­ra­tive work­ing re­la­tion­ship with the fund through the Ar­ti­cle IV con­sul­ta­tion process, but al­so tech­ni­cal­ly.

"There are a num­ber of things which they are do­ing with us over the next cou­ple of years, in­clud­ing the mon­i­tor­ing of the re­forms of the state in­sti­tu­tions for greater ef­fi­cien­cy par­tic­u­lar­ly in fis­cal af­fairs."He said that from June, through a re­gion­al tech­ni­cal as­sis­tance fund, the IMF will be con­duct­ing a com­pre­hen­sive re­view of all tax­es and du­ties in Bar­ba­dos, in­clud­ing val­ue added tax and per­son­al in­come tax.

Sinck­ler said he ex­pects to have a re­port in a few months and that would de­ter­mine what changes are re­quired to make the sys­tem­more ef­fi­cient.To ar­rest de­clin­ing tax in­come, he said, "We've now moved to con­sol­i­date the tax ad­min­is­tra­tion func­tions of the four ma­jor tax in­sti­tu­tions in Bar­ba­dos, un­der a sin­gle um­brel­la, the Bar­ba­dos Rev­enue Au­thor­i­ty."

That is part of Bar­ba­dos fis­cal re­form process as well, he said, be­cause the Bar­ba­dos gov­ern­ment knows that on av­er­age be­tween 20-30 per cent of the loss of tax rev­enue comes through in­ef­fi­cient ad­min­is­tra­tion. He said: "If we can im­prove ad­min­is­tra­tion we will be able to in­crease the re­turns."

Forex crit­i­cal for is­land

In a sep­a­rate in­ter­view, Cen­tral Bank of Bar­ba­dos Gov­er­nor, Delisle Wor­rell, said that in an econ­o­my like Bar­ba­dos, the key el­e­ment is the crit­i­cal im­por­tance of for­eign ex­change."Small, open economies like ours are en­gines that run on for­eign ex­change and that's the cru­cial dif­fer­ence be­tween a small econ­o­my and a large econ­o­my like Brazil. A large econ­o­my like Brazil can grow on its own re­sources be­cause every­thing that it needs it can pro­duce do­mes­ti­cal­ly.

"If you are small, the world is ruled by economies of scale. So if you look at any small econ­o­my, even the most di­ver­si­fied one is on­ly go­ing to have five or six ac­tiv­i­ties that they are able to pro­duce at in­ter­na­tion­al­ly com­pet­i­tive prices."

The cen­tral banker said the range of con­sump­tion that a small coun­try needs to sup­port mod­ern lifestyles is vast com­pared with what the small coun­try pro­duces. So that econ­o­my al­ways has to be run through the for­eign ex­change en­gine, which is the es­sen­tial dif­fer­ence be­tween large and small coun­tries.

Asked if he would ag­gree that there are more ways in which the economies of Bar­ba­dos and T&T are sim­i­lar than there are dif­fer­ences, Wor­rell said the main dif­fer­ence is that the Bar­ba­dos is a ser­vice econ­o­my while T&T pro­duces phys­i­cal goods.

Wor­rell said: "This makes your econ­o­my eas­i­er to man­age in cer­tain re­spects. For ex­am­ple, it is eas­i­er to trace the in­flows of for­eign ex­change in the T&T econ­o­my. When Bar­ba­dos was a sug­ar econ­o­my, it was eas­i­er for us to do that as well. We ex­port­ed a cer­tain amount of sug­ar and there was a cer­tain amount of for­eign ex­change that came in."

While stat­ing that tourism is dif­fer­ence as the for­eign ex­change in­flows are more dif­fi­cult to trace, the cen­tral banker said: "Ef­fec­tive­ly the way the two economies works is ex­act­ly the same. We have more in com­mon in terms of the chal­lenges of deal­ing with an econ­o­my where you do not have the di­ver­si­fied pro­duc­tion struc­ture, which lim­its op­tions in terms of how the econ­o­my is ex­pand­ed and sta­bilised."

Wor­rell was asked this ques­tion: If there are more ways in which the economies of Bar­ba­dos and T&T are sim­i­lar, is there a les­son that Bar­ba­dos can learn from T&T with re­gard to the flota­tion of the TT dol­lar in April 1993?He said: "Not re­al­ly be­cause the gain that T&T gets from its de­val­u­a­tion is the fis­cal gain. Be­cause T&T ex­ports phys­i­cal goods–such as oil, nat­ur­al gas and petro­chem­i­cals–it knows how much for­eign ex­change it is get­ting and most of the for­eign ex­change comes to the Cen­tral Bank."

He agreed that this means that T&T gets more TT dol­lars from its ex­ports when there is a de­val­u­a­tion.Asked if the sit­u­a­tion was not the same for Bar­ba­dos, Wor­rell said: "No, no no be­cause we do not ac­tu­al­ly know or see the phys­i­cal dol­lars from tourism. They come in­to the econ­o­my but you can't say how much is due."He said that if Bar­ba­dos were to de­val­ue, it could get less Bar­ba­dos dol­lars from it be­cause the ap­pre­hen­sion about de­val­u­a­tion, even be­fore you de­val­ue, caus­es peo­ple to take de­fen­sive po­si­tions.

Wor­rell said that hap­pened last year which was one of the rea­sons the Bar­ba­dos au­thor­i­ties has been at pains to re­as­sure peo­ple that "there is no prospect of a de­val­u­a­tion in Bar­ba­dos."