It is truly astonishing just how much of a financial greenhorn the PLP’s shadow finance minister Chester Cooper truly is.
This man has more waffles than the International House of Pancakes.
From dissing the need for The Bahamas to buy hurricane insurance from the Caribbean Catastrophic Risk Insurance Facility to his latest doozy about the International Monetary Fund, Cooper needs a crash course in fiscal policy management.
He rose from novice to apprentice two months ago when he argued that the government should borrow $2 billion to address the calamity of COVID-19. That thinking was in line with leading economists.
But when the government actually put together a consortium to borrow the money, ole Chestie did another of his famous flip-flops. It smacks of desperation, said he, to borrow money from the IMF.
Despite his astonishing naivete, Cooper is not alone in his purblind thinking.
Even some mandarins in the Ministry of Finance have a deep aversion to the acronym IMF based on a profound misunderstanding of the institution we joined in August 1973. Joining the IMF is a precondition to any country joining the World Bank.
The fund and the bank are so intertwined that their annual meetings are held jointly but separately.
Cooper might know that membership in the fund has both a price and rewards.
We have paid that price (in the form of Special Drawing Rights that we bought with hard cash).
When COVID-19 first hit, Prime Minister of Barbados Mia Mottley, who doubles as both her country’s finance minister and chairman of CARICOM, was immediately on the phone to the fund.
Not everyone in our finance ministry was on board with going to the fund.
By the time we came around to borrowing from the IMF, more than 100 of the fund’s 189 members had already taken advantage of this relatively free money (interest rate of one percent).
In this region, Jamaica, the Dominican Republic, Panama and Costa Rica were among the countries accessing this rapid financing that comes with no strings attached.
What Cooper was clearly confusing was the fund’s structured financing programs where it acts as a (not the) lender of last resort and imposes odious conditions. It seldom uses all of its own money; rather, they provide cover for other institutions to lend to the country.
Jamaica recently successfully completed such an IMF program which enabled it to access the rapid financing.
Barbados is currently in an IMF managed program but was nonetheless allowed to draw on the rapid financing.
It should be noted that when Jamaica entered the IMF managed program, they borrowed $2 billion with the majority of the money coming from the IDB and the World Bank.
It would have been completely irresponsible of our government not to access this unconditional financing.
It is much cheaper than borrowing from the development finance institutions that have comparatively low interest rates or paying higher rates at commercial banks.
Someone needs to school Cooper on running an economy to prevent his humiliation in front of our creditors.
His minders could start by letting him know that we are not even close to being in penury.
Our credit rating is still respectable, although we would all like for it to improve.
We can do that by having the government tighten its belt (a card that is not in the deck at this time, thankfully), or by getting the economy revved up as soon as the pandemic allows.
It’s a question of when, not if, Cooper will flip-flop again.
PLP Leader Philip Brave Davis needs to seriously consider shuffling the few cards he has in his parliamentary deck.
Perhaps he could replace Cooper because shadowing the finance minister at this time is a job for the ace of spades, not the deuce of clubs.
— The Graduate