COLUMN – Confidence surely is key
A country’s success in terms of achieving sustainable economic growth depends not only on effectively harnessing the four basic factors of production –– land, labour, capital and entrepreneurship –– but also on achieving and maintaining a high level of confidence among investors, producers, consumers and the population at large.
Confidence is a feel-good emotional state where people believe they have good reason to be upbeat about a country’s prospects. This frame of mind causes them to exhibit certain behaviours that drive demand for goods and services, the production of which constitutes the source of economic growth. Confidence tells people they can comfortably plan for the future because whatever dreams they have are very likely to come true.
Generating and sustaining confidence at a national level is the responsibility of government or, to be more specific, the political leadership of government. A key role of leadership, in this regard, is the articulation of a compelling vision of future which attracts widespread buy-in because it is not only realistic but also highly attainable. The narrative of leadership is therefore key.
Even though there are welcome signs that growth is returning to the Barbados economy after seven years of decline and stagnation, the biggest obstacle in the way of full recovery relates to confidence. Because of the uninspiring way it has managed the country and the many broken promises on its performance card, the Freundel Stuart Government faces a major crisis of confidence. The latest CADRES poll published last Sunday provided strong confirmation.
Indeed, there are many Barbadians across the social spectrum who believe the administration does not know what it is doing because of its failure to communicate effectively and its clumsy handling of some key issues, such as the credit rating downgrades. Because there are doubts that Stuart’s Democratic Labour Party (DLP) has the answers
to the country’s problems, Barbadians are naturally worried about the future.
Confidence is the key ingredient in any successful economic management formula. During his generally successful tenure as Prime Minister and Minister of Finance, Owen Arthur repeatedly emphasized its importance. Confidence gives citizens the assurance that there is no need for worry because their destiny is in safe, capable hands and that, regardless of the challenges the country occasionally may face, things will generally work out fine.
Reporting that Barbados’ “economic fortunes are finally beginning to change for the positive” as he led off debate on the 2015 Estimates Of Revenue And Expenditure in the House of Assembly on Monday, Minister of Finance and Economic Affairs Chris Sinckler spoke of “confidence in our abilities” to “rebuild, restructure and reposition Barbados”. The pertinent question really is who is demonstrating this “confidence” which Sinckler mentioned? At least, if no one else, the Government has to.
Ironically, the day before, the CADRES poll showed public confidence in both Sinckler and Stuart had plummeted dramatically since the 2013 general election. Sinckler’s approval rating fell from 11 to six per cent while Stuart’s plunged from 39 to 13 per cent. As expected, the Government dismissed the findings but, whether we like polls or not, they always provide a fairly accurate reflection of the mood on the ground.
What is clear, based on an interpretation of the poll, is that Barbados is simultaneously facing both an economic and a political crisis.
Winning the confidence of the business community is particularly crucial to boosting the prospects of recovery. Economic growth this year is projected at 1.5 per cent, the highest forecast in seven years. In our free market economic model, the private sector is the engine of growth. While Government sets policy and is responsible for creating the “enabling environment” for growth to occur, it is business which makes it happen.
Business takes investment risks to pursue opportunities, produce goods and services, create jobs, generate tax revenue for the Government, and earn foreign exchange. These activities contribute to expansion of the gross domestic product (GDP), which measures growth.
Reading between the lines when business leaders make pronouncements, it is clear that while they are hoping for the best, they are understandably guarded in their optimism that a major turnaround will occur under this Government. In fact, it appears that if most Barbadians have their way, they would prefer for both the political and economic crises to be settled through an early general election which most likely will result in a change of Government.
Confidence is highly fragile. It often takes considerable time and effort to win a person’s confidence, but it can be shattered in a fleeting moment by behaviour that causes a dramatic change of attitude towards the person or organization. When this occurs, rebuilding confidence is never easy. People’s emotions are involved and, as the saying goes, once bitten, twice shy. Even in cases where confidence is restored, often it never returns to the level that
The DLP suffered a significant loss of confidence over its handling of the economic crisis of the early 1990s. After it was voted out in the 1994 general election, it took another 14 years before the people of Barbados felt sufficiently comfortable again to entrust their destiny to the DLP under the leadership of the late David Thompson in the 2008 general election.
Under Stuart who succeeded Thompson on his death in October, 2010, the relationship again is seriously fractured. The economy may achieve some growth between now and the next general election, but regaining the confidence of Barbadians will not be easy for the DLP. The experience of the past few years has simply reinforced a widely held perception that the DLP is weak when it comes to managing the economy.
In the meantime, many Barbadians seem eager to demonstrate their lack of confidence in the Stuart Government by letting their feet do the talking. Young people in particular are increasingly saying Barbados has nothing
to offer them and seem ready to leave for greener pastures, even as illegal immigrants, once the opportunity comes along. Previously unimaginable, recent news that 7,000 Barbadians are living illegally in Trinidad and Tobago underscores the hopelessness out there.
Barbados is the homeland we love. As a patriotic people, despite our political and other differences, we all want the very best for Barbados so that it can continue to shine as a beacon of success. The dilemma facing the DLP, halfway into its second term, is how to shine when confidence in its leadership and ability to deliver is sharply heading downwards instead of upwards.
(Reudon Eversley is a political strategist, strategic communication specialist and journalist.