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In 2022, the Central Bank of Barbados celebrated its golden anniversary and marked the occasion with a number of events. These, along with many of its regular activities, made for a busy year for the organisation.
This article is the third in a four-part series that looks back at some of the Bank’s initiatives and activities, both those related to its core objectives of maintaining Barbados’ fixed exchange rate and promoting financial stability; and to its domestic outreach, during the year. Read parts one, two, and four.
With life expectancies rising and birth rates decreasing, the sustainability of social care programmes, and in particular pensions, is a concern for policymakers across the region. In July, the Bank brought together Professor Emeritus Karl Theodore, Senior Consultant Advisor, HEU, Centre for Health Economics at the University of the West Indies, St. Augustine; Derek Osborne, Actuary and Partner at LifeWorks, Bahamas; and Diane Quarless, Director of the Economic Commission for Latin America and the Caribbean (ECLAC) Sub-regional Headquarters for the Caribbean to share their perspectives and offer solutions.
Osborne approached the issue from a numbers perspective, suggesting that a combination of higher contributions and smaller payments would be necessary, but Quarless argued that such an approach would be “politically unsafe” and thus a non-starter, and instead argued that the situation needs to be addressed in conjunction with other challenges, including youth unemployment, women’s empowerment, and non-communicable diseases (NCDs).
In September, the Government of Barbados introduced BOSS+, a new security in which Barbadians and Barbadian businesses could invest. The Bank embarked on a campaign to introduce the bonds to the public and to educate them about their benefits.
As part of the initiative, Quinn Weekes, an economist and data scientist calculated how the security stacks up against comparable instruments, revealing that the combination of its annual interest rate of 4.5 percent and exemption from withholding tax made it a superior investment.
Following a September visit to Barbados to meet with local officials, including representatives of the Bank, International Monetary Fund (IMF) team lead Bert van Selm announced that his organisation and Barbados had reached a staff-level agreement for the island to re-enter an IMF programme.
In the statement, van Selm noted that “Under the agreement, which is subject to approval by the IMF Executive Board, Barbados will get access to about US$183 million under the RST (Resilience and Sustainability Trust) and around US$110 million under a 36-month Extended Fund Facility (EFF).”
Once the new arrangement is approved, Barbados will become the first country to access the RST.
In July, the Bank hosted the 42nd Annual Review Seminar under the theme “Adapting to the New Normal: Avenues for Economic Growth and Sustainable Development in the Caribbean.” The opening day of the seminar featured a special 50th anniversary session entitled "Central Banking Issues in Small Open Economies: Crafting the Post-COVID Regeneration” that featured presentations focusing on climate risk, currency and reserve management, and the role of central bank digital currencies (CBDCs) in the evolving payments landscape.