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

238 sale of Heywoods, the Arawak Cement Company and the BNOC, indirect tax reform, trade reform and an official incomes policy, which was said to be particularly crucial to the maintenance of the fixed exchange rate. Time and again during JEG meetings calls were also made to push on with the reforms to the BNB, the sugar industry, the Board of Tourism, the trade regime and indirect taxation. At the JEG meeting of December 21, a synopsis of a document on structural adjustment was tabled. Some progress in reforming the sugar industry came late in the year when the Cabinet agreed to establish the Agricultural Credit Trust (to hold the non-performing assets of Barbados Sugar Industry Limited) and the Agricultural Marketing Company (to manage field and factory operations). Between January and June 1993, there were the first signs that the crisis was easing. The tourism sector picked up and real GDP did not decline during the period for the first time since end-1989. The NIR grew by nearly $93 million and the targets for end-March and end-June were achieved. Higher-than-expected Bank profits in 1992 boosted Government revenues and the 1992/93 fiscal outcome was much better than programmed. The Bank continued to help create an environment for economic growth. In May, it removed the ceilings on all credit extended by commercial banks and non-bank financial institutions and reduced the cash reserve requirement for commercial banks by two percentage points and the discount rate from 12 per cent to eight per cent. However, the major disappointment was the failure to energise the structural reform process. For example, little was achieved in respect of divestment. By end-March no suitable offer had been received for Heywoods while those received for BNOC and the National Petroleum Company were being evaluated. During March, too, proposals were being discussed in respect of a social contract to address international competitiveness by containing increases in wages and prices. By the following month the VAT Implementation Unit was in place and it had been agreed to merge the Agricultural Marketing Corporation with the Agricultural Development Corporation. But by then, too much slippage had occurred in the original schedule of structural reform for it to be