A big mistake
The St. Peter MP also said the Freundel Stuart Administration was misguided if it thought diversifying the economy into a focus on renewable energy and the cultural industries would reap immediate success.
“A judicious blend of policies in respect of domestic stimulation is necessary and we will support it… To believe that capital projects that are not shovel ready can give you an immediate stimulus is a mistake,” the former Minister of Finance said this afternoon as the Estimates Debate continued in the House of Assembly.
As for the measures Minister of Finance Chris Sinckler identified as restructuring the economy and earning the country more foreign exchange, Arthur said “they are worth working on but do not believe that you can get substantial growth from these things immediately”.
“The Government can get us out of this situation by making the necessary [changes] … in the sectors where the immediate potential is greatest, tourism and international business,” he stated.
“We should not leave these debates until we are sure, even though … the worst case is before us, that we have provided these sectors with the resources to get the job done. I am not satisfied the provision for tourism will get the job done. The tourism sector needs $150 million because we know that it is not paying its bills.
“The Government in our view is placing unrealistic confidence in sectors which it believes will generate growth in the short term and not doing what is necessary to support those sectors, which can pull Barbados out of this abyss.”
The former Opposition Leader said the fiscal situation confronting Barbados was due to a lack of fiscal prudence, and that this was reflected in the 2013-2014 Estimates of Revenue and Expenditure.
Arthur said he was also concerned that based on the budget laid and debated, the state of the public finances were worse than expected and predicted.
“The country was to ensure attainment of strong growth after the recession and in accordance with that strategy and the succeeding revised strategy Barbados should be growing now at about three per cent per year. The country was also to reduce the fiscal deficit and the measures have been put in place to try to reduce the fiscal deficit … and to provide a stable framework for the achievement of the national goals,” he noted.
“Significantly, Mr. Speaker, the Medium Term Fiscal Strategy of the Government and the revised fiscal strategy were intended to reduce the level of debt and to improve the country’s credit rating … and a whole other set of things.”
“The … Government has committed itself to a Medium Term Fiscal Strategy, it has had to revise that Medium Term Fiscal Strategy in the light of changing circumstances. To what extent has the targets in that Medium Term Fiscal Strategy been achieved.?
“We now find ourselves in a situation that the Government’s financial situation and the growth of the economy are now worse … than the worst case scenario spelt out in the Government’s own financial strategy,” he said. (SC)