Pursuing Resilience in the Shadow of COVID

It is with distinct pleasure that I welcome you to the Central Bank of Barbados’ 41st Annual Review Seminar.

Last year marked our first virtual undertaking of the seminar, demonstrating the Bank’s commitment to promoting and disseminating timely economic research.

This unwavering commitment has been supported by leading institutions, such as the University of the West Indies and the Caribbean Development Bank, and by experienced and emerging regional economists.

As we promote economic resilience and advocate for inclusive and sustainable growth, we believe that this commitment is all the more relevant as we continue to grapple with the pandemic and the protracted recovery.

This Annual Review Seminar is an integral part of the legacy of the late Sir Courtney Blackman, the iconic first Governor of the Bank. Through his encouragement, this seminar flourished in the early days of the Bank, which came to be recognised as one of the region’s leading research institutions.

Sir Courtney himself gives us some insight into how highly he valued research and personal development in his reflections in The Practice of Central Banking. He states:

“The Bank is an information system in which information from several sources were processed by the technical, professional and management skills of the staff into outputs of monetary policies and decisions…Outputs depended on the Bank’s research and analytical capabilities, which in turn required continuous staff training and development. I stressed that the central bank was foremost an intellectual institution.”

This fundamental belief has been at the core of the Bank’s development over the years, acting as an anchor for its commitment to research, the development of policy, and the education of the general public. As we reflect on his legacy, I am delighted that we are able to honour his contribution through a short video presentation this morning.

As I speak, uncertainty continues to cloud the outlook for many of our economies. The COVID-19 pandemic has bought into sharp focus many of the vulnerabilities and inequities that have for too long been characteristic of the challenges faced by our economies.

Here at home, the lesson has been harsh. After the initial progress achieved in restoring macroeconomic stability through the reforms initiated under the Barbados Economic and Recovery Transformation (BERT) programme, the pandemic has stymied the recovery, with an unprecedented contraction of the modern Barbados economy.

It is generally accepted, that recovery from the social and economic disruptions caused by the COVID-19 pandemic requires concerted policy action. Over the past 15 months, the Barbados government, supported by lending from the multilateral lending institutions, has with its limited fiscal space implemented counter-cyclical social spending to help mitigate the impact of the pandemic.

The recovery will not happen overnight. Tomorrow, I will have more to say on where we are on the road to recovery, some of the ongoing challenges we face, and the imperatives for sustainable growth.

COVID-19 and recent climatic events have underscored the need for us to build resilience to reduce vulnerability. Building resilience for the nation is just as important as building it for us as individuals. We all know the importance of saving for a rainy day and as COVID demonstrated: having a safety net such as the NIS unemployment scheme can help us better cope with shocks such as a temporary loss of employment income. Property insurance helps us to mitigate damage to physical assets, but improved building codes are equally important so that our buildings can withstand the stresses of climatic events.

But resilience comes with an upfront cost, and at the national level it is made all the more challenging against a backdrop of uncertain fiscal and debt dynamics. It is with this in mind that this seminar under the theme, “Pursuing Resilience in the Shadow of COVID: Overcoming the Pandemic’s Economic Fallout”, seeks to explore these issues.

As we seek to rebuild our economies, we need to place emphasis on enhancing our resilience against future shocks by taking advantage of opportunities to prioritise the environment, encouraging innovation, and building buffers. Our research needs to cover these critical issues.

The sessions lead with the exploration of economic growth and human development, recognising that investments in our human capital and infrastructure serve as cornerstones to transformative and inclusive growth. Increasingly active hurricane seasons have also become reliable reminders of our vulnerabilities to natural disasters, making policy research centred on global warming and investment facilitation of sustainable growth paths all the more significant.

Financial innovation, as the pandemic has demonstrated, is also central to more resilient economies, providing important opportunities for development. This point was underscored by Dr. Patrick Njoroge, Governor of the Central Bank of Kenya, at the Institute of Chartered Accountants of Barbados’ annual conference last year, when he stated that “we must put people at the centre of the global financial system” and “most important is empowering and protecting our citizens in the digital realm”. Our regulatory response to the drive for innovation must, therefore, be focused and supportive, positioning us to effectively capitalise on the benefits of this burgeoning digital era.  

These are but a few of the areas that our discussions over the next four days will cover, thanks to the contributions of our panellists, authors, and you, our participants.

This morning’s session will be led by our specially invited guests Mr. Ian Durant, Director of the Economics Department of the Caribbean Development Bank; Mr. Gervase Warner, President & Group CEO of Massy Holdings Ltd; and our very own Ms. Michelle Doyle, Advisor to the Governor.

I hope that the seminar will serve as a forum for discussion, proliferating ideas and relationships that will continue to build on the strong foundations that have been laid over the course of the Bank’s history.

On behalf of the Central Bank of Barbados, welcome once again and I wish you a stimulating and enjoyable seminar.

Thank you.