Both Sides of The Coin: The Story of The Central Bank of Barbados 1972-2017

Chapter 5: Some Notable Developments 229 There was also some uncertainty regarding the way the bonds would be treated in Government’s accounts. 113 There was much concern about poor expenditure control in the public service and it was even thought prudent to implement a mini- budget. This could not realistically be done before mid-September, but there was a view that expenditure cuts should be in place by August 1. Between June and September 1991, the NIR fell by about $62 million (the Bank’s foreign exchange assets were negative at end- September) and the public debate on whether or not to devalue the Barbados dollar intensified. The pro-devaluation lobby had some support among hoteliers and manufacturers who felt that devaluation would significantly stimulate export demand. In this group, too, were some public sector workers who were opposed to the public sector bearing the brunt of the adjustment. On the other hand, the trade unions were opposed to devaluation because of the expected impact on the standard of living of workers. In official circles, devaluation was never seen as an option and the general feeling was that there would have to be a major contraction in the public sector. The negotiating teams By now JEG members and the IMF team were in constant contact. In order to keep abreast of all developments, the JEG met very often, sometimes weekly, and their agenda was quite full. At any sitting they discussed issues as varied as credit to Government, debt-servicing, divestment, concessions to manufacturing, the problems at some local commercial banks and the Ways and Means limit. Governor King chaired these sessions with Dr. George Reid (the DFP) and Dr. Worrell coordinating the work on the supporting statistics. The technical team from the Bank was led by Worrell, with Muriel Saunders and Cleviston Haynes, who collated the data, as the main contacts with the Fund personnel. Marion Williams managed the foreign exchange cash flow. With respect to sectoral work, Haynes handled finance