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Wrong way

Privatization should remain on the table –– Abed

Don’t rule out privatization!

This was the stern advice issued Wednesday by this country’s Chamber of Commerce and Industry (BCCI), as it reacted to the latest Central Bank report.

President Eddie Abed said the report was further evidence that Government’s economic policies were clearly not working, while suggesting that expenditure cuts were the only way to reverse the current fiscal slide.

“We have been extremely forceful that Government must close the deficit by cutting their spending. There is no other way to do it. They must cut their spending and there are several options available currently. However, in the future there may not be any [options],” the businessman warned.

He suggested that Government should embark on more public/private partnerships as a precursor to full privatization of any of its assets.

“The private sector brings a certain amount of maturity and discipline in fiscal measures and perhaps that management aspect of it might be needed,” said Abed, who also recommended the introduction of user fees for public services as a means of increasing state revenues.

His comments came against the backdrop of robust debate in recent weeks about privatization of the state-run Sanitation Service Authority (SSA). However, Minister of the Environment Dr Denis Lowe Tuesday night put paid to any such discussion when he told Parliament that divestment of the SSA was currently not on the cards.

Nonetheless, Abed dared to raise the dreaded ‘p’ word again Wednesday as he responded to some of the more grim aspects of Central Bank Governor Dr DeLisle Worrell’s third quarter economic report.

For one, the businessman took issue with the fact that Worrell has had to further reduce his near two per cent growth projection for 2016, pointing out that the Chamber had earlier voiced concern that it was “inordinately high”.

“And if you start with the wrong premise, you are going to end with the wrong result,” the BCCI president warned, adding that “our expectation all along was that the growth was never going to be [in the region of] two per cent. It was probably more around 1.5 per cent, in line with what the Central Bank is [now] saying.”

Abed also warned that Government’s ability to cover its expenditure through taxation was diminishing.

“With that comes the understanding that if the economy is not growing as quickly as anticipated, you are going to end up with a situation where the tax dollars you intend to recoup are never going to come to a realization. So here we have a situation where we can only expect another deficit this year,” he said.

He also pointed out that while “the quantum of deficit as a percentage in GDP may be less than last year, there is still a hole in the [Government’s] bucket . . . and the way that we have been making up the shortage is by printing dollars.

“This is just not sustainable. This is driving us closer to the point of no recovery,” he added.

Between April and September of this year, $114 million was printed by the Central Bank in support of domestic financing.

The private sector boss also suggested that Government should draw on the skill sets of knowledgeable persons in both the public and private sectors, to chart the best course forward. He also strongly criticized Government’s tax strategy.

“You can’t put more weight on a galloping horse and expect the horse to run the race. Private sector is what grows the economy,” Abed said.

“We have said all along that we want Government to facilitate to create environment through which companies can grow and by extension raise their revenues, raise the taxable dollars, employ more people, give opportunity to school leavers and generally move this country in the right direction. You can’t continue to tax our way out of this problem, you must cut the country’s spending,” he added.

colvillemounsey@barbadostoday.bb

10 Responses to Wrong way

  1. Phil October 27, 2016 at 1:53 am

    Many people see private companies as a stubborn mule to be flogged. Many see it as a fat cow to be milked. very are those that see it as a strong ox pulling the burdensome wright of the country.

    Reply
  2. Hal Austin October 27, 2016 at 2:55 am

    Apart from the transfer of wealth from taxpayers, what special skills will privatisation bring?

    Reply
    • Phil October 27, 2016 at 3:19 am

      Reading radiates light Hal, READ. I never said everything should be privatized. Privatization is a vital gear wheel in every successful country except dictatorship and commonest countries. It brings in lots of money through Jobs, Taxes, educational, health, and every single economical strength. All I am saying is instead of condemning it, accept and work with it.

      Reply
  3. Tony Webster October 27, 2016 at 4:53 am

    Bosom bared…I confess huge enjoyment to reading the regular commenters on national issues…divergent philosophical and political leanings included. Keep up the good work please guys!!

    BTW, @ my good friend Hal…whose pithy comment above I know not is offered chongue-in-teek, or “straight”!! If private wealth is out of fashion, what next to secure our children’s future, relevance, or survival? Putin’s brand of democracy? I think Phil ( I suspect which Phil this is too!!) provides your answer. Thanks be to God , I did not have you lot to debate against at grammar school in Grenada: Bernard Coard was tough enough, and I eschew any more big-brains tussles…preferring to invest my energies in favour of admiration for a sweet lady at BayView…who remains just beyond reach, but not “Beyond imagination”…aspiration…and many, many prayers.

    As our private and public sectors are inextricable inter-twined, it’s high time that this be embraced by every breathing Bajan: methinks that our national motto is due for a li’l polish-up (if not for the Big 50th Bashment, then for the Republican thing on the horizon)…to say something like; “All Together Now…Forward for our Children’s sake”. (hmmm… Coard yet lingers..I nearly said “Forward ever , backward never”)
    Q.E.D.

    Reply
    • Phil October 27, 2016 at 10:09 am

      This is the same Phil. We bumped into each other in Dubai in June this year. Somehow I forgot your first name. I’m still working on that Offshore project. Will be making a presentation in Taiwan in February 2017.

      Reply
  4. Hal Austin October 27, 2016 at 6:13 am

    Phil,

    What special skills will privatisation bring?

    Reply
  5. Phil October 27, 2016 at 7:48 am

    Management, Productivity, Hal this skills specialty is too enormous to deem privatization unacceptable. In Barbados, public sector jobs are obtained through political favours. and because of this security, employees become complacent and in many cases unproductive. The top managers become untouchable and let me add unreliable. unpunctuality and unaccountability becomes the norm as is evidenced in this Barbadian government.

    Reply
  6. Donild Trimp October 27, 2016 at 11:04 am

    Seventy five per cent of Public Sector workers in Barbados obtain wages by fraud.

    They are inefficient and unproductive in all areas. There is an entitlement mentality in all areas of the public Sector of Barbados.

    It is time to start privatizing in Barbados. Get rid of all the dead wood starting from the top.

    Barbados cannot continue to exist in its current state of decay.

    Reply
  7. seagul October 27, 2016 at 11:11 am

    What special skills…….just like the Swiss-Italian watch called sector, jobs will always be bought.

    Reply
  8. jrsmith October 27, 2016 at 1:42 pm

    Privatization would not be favorable to bajans , although we are suffering economically and 100s millions of our taxpayers dollars cannot be accounted for, further more to this no one in government or the opposition seems to be willing to answer to the bajan people as to why politicians is avoiding the question of the (AUDIT GENERAL’S) report ….
    @, Donild ,T, hail ,hail, good shot on the button, must further add you would still have to work out how many jobs is given to party faithfuls whether they can read or not………………………….

    Privatization of many of the government services in Barbados , would work so much in our bajan people favour..
    We can ask questions ,,,,,,,,
    We will have some answers because some transparency will be there.
    The company / companies wouldn’t have to directly deal with individual politicians when it comes to financing….
    bajans would have to work for they supper , no skiving off , no sitting on the phones chatting to friends ,no getting to work hours late , no 2 hour lunches no lying about they health and the biggest one they would be sacked……….
    No biscuit , rum and corned beef protection, this give bajans a real sense of responsibility…..

    Reply

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