I would like to applaud Sir David Seale for the effort he recently made to venture into the public domain and to put forward some ideas for rescuing our currently declining Barbados economy.
But even while I congratulate Sir David, I need to remind the Barbadian people that well over four years ago — in January 2009 — I wrote to the leaders of all the Government and Opposition political parties in the Caribbean Community and warned them that we were in the beginning phase of a prolonged international economic recession, and that they needed to come together to jointly implement a collective “stimulus package” of measures for the Caribbean region.
My exact words of warning to them were as follows:
“It is already bad now, and it is going to get worse, much worse! Indeed, if we do not respond pro-actively and appropriately, we can confidently expect years of mass unemployment throughout the Caribbean, collapsing social infrastructure and programmes, a high incidence of mortgage foreclosures, massive balance of payments crises, spiraling crime rates, and general social disintegration.”
I also proposed that they come together in a Pan-Caribbean bi-partisan convocation of government and opposition leaders to consider “a stimulus package based on the collective investment in new industries and structures of production; a new thrust in import substitution; a Caribbean food and housing programme based on the use of indigenous resources; new collective initiatives in research, development and marketing; a new effort at political integration and union; and the crafting of new relations with other regions of the world”.
Tragically, only two of the political party leaders even acknowledged receipt of the letter — Arnhim Eustace of the NDP of St. Vincent and the late David Thompson of the DLP of Barbados — and the initiative was still-born.
But now, some four years later, these same political leaders are running around the Caribbean like headless chickens, clueless as to how to respond to the crisis that has engulfed them all!
And so, the fundamental solution to the economic crisis is really a collective, Pan-Caribbean one! However, since this does not seem to be on the cards, we have to turn our attention to solutions at the individual country level.
In the case of Barbados, my political party, the Peoples Empowerment Party, has tried, time and time again, to suggest to the current DLP Administration that any national plan to take Barbados out of recession must begin with measures to “re-establish the soundness of the finances and credit of the Barbados Government” and measures to “restore the purchasing power of the masses of Barbadian people”.
Re-establishment of the soundness of the finances and credit of our Government is critical, because Government has to take the lead in tackling the recession and bringing the nation out of the economic doldrums, but will not be able to provide such leadership if its own finances are in disarray!
Thus, the Barbados Government must take measures to bring its annual regular or recurrent expenditures more in line with its annual revenue or income. We simply cannot afford to have a situation in which Government is consistently borrowing money on a monthly basis to pay the salaries of civil servants!
This state of affairs has persisted for far too long and needs to be remedied by Government engaging in some creative thinking and taking measures to rationalize its operations. (And such rationalisation need not include privatisation!)
But, let me hasten to add that this admonition to straighten out Government’s annual budget does not mean that our Government should be precluded from borrowing and spending or from loaning out money, for the purpose of energising economic activity and development: nor that Government should be precluded from implementing measures to enhance the purchasing power of the Barbadian people!
There is, for example, nothing wrong with Government incurring debt for the purpose of making credit available to deserving Barbadian hoteliers, farmers, manufacturers, and sundry entrepreneurs provided that the loans extended are sound loans which will be repaid to the Treasury over a period of years.
Indeed, for some time now we have been urging the Barbados Government to sign up to the Petro Caribe Energy Agreement; to use that agreement to free up a good $200 million in annual petroleum payments; and to use that money to extend credit to sound and deserving Barbadian business-people at a nominal one percent interest rate! This will help to spur production in the domestic economy and to earn valuable foreign exchange.
There is also nothing wrong in Government incurring debt for the purpose of constructing such capital assets as a new cruise pier at the Bridgetown port or a new cargo shed at the Grantley Adams International Airport, provided that these new structures will enhance production and productivity, and pay for themselves over the years.
Finally, there is a need to restore the purchasing power of the masses of Barbadian people! The Barbados Labour Party has expressed this concept with the phrase “putting money in the people’s pockets”. There is nothing wrong with this idea. It is one of the traditional methods used for getting an economy out of recession. And it goes without saying that in an open economy like Barbados it has to be implemented with an eye to our stock of foreign exchange!
During the last General Election the BLP put forward a $90 million package of tax reductions and incentives that was designed to “put money in the people’s pockets”, and to give a boost to socially and economically productive spending in the domestic economy. We encourage the Government to take these proposals on board.
Indeed, all of the ideas outlined above should be embraced as components of a multi-pronged economic strategy! But will they be? Our Government has not given us much cause for optimism so far. It seems to be a regime that sees little, hears little and does little!
* David Comissiong is president of the Peoples Empowerment Party.