Has the moment of truth arrived?

Where does the Barbados economy really stand at this point in time? Are we still seeing light at the end of the funnel, as key Government officials told the country last year, or has that light now been snuffed out? Can we also still say that the economy has turned the curve, to use another official description, or has it gone into reverse?

In the almost two weeks since Central Bank Governor Dr Delisle Worrell’s latest monthly economic newsletter set off alarm bells, all sorts of questions about the state of the economy have been going through the minds of Barbadians. Citizens generally seem confused as to what is really happening and, more worryingly, whose word to believe.

Thus far, we have heard the reactions of the private sector, parliamentary Opposition, representatives of the economics profession and other commentators. Their comments generally suggest that the economy, even though it has started growing again, has reached a critical point where far-reaching decisions have to be made, especially in relation to the high level of public debt.

However, up to the time of writing, the country had not yet heard, by way of a definitive statement, either from Minister of Finance Chris Sinckler or Prime Minister Freundel Stuart, the two elected officials most responsible for the management of the economy and accountable to the populace in the traditions of democratic governance.

Dr Worrell spoke specifically of an imbalance in the balance of payments where outflows of foreign exchange to pay for imports, etc. since 2013 have outstripped inflows from exports and investments, etc. He pointed to the pressure being placed on the foreign reserves which are critical to maintaining the two to one exchange rate.

“The foundation for growth is a stable economy and in Barbados that means a balance between foreign exchange inflows and outflows,” Dr Worrell said. “We know when we have achieved that balance because in that case we do not have to dip into the Central Bank’s reserves of foreign currency to make up the difference.”

Even though the Central Bank governor assured there were adequate reserves to “meet all legitimate needs”, the comments have reignited fears about devaluation, especially in the light of the latest sovereign credit downgrade by Caribbean Information and Credit Rating Services Limited (CariCRIS), the Trinidad-based regional ratings agency.

Given the sensitivity of the issue, what is urgently required from Government to address the concerns of Barbadians, is a comprehensive report on the state of the economy from the Minister of Finance that, ideally, should be the focus of a special parliamentary debate. The statement should be designed to provide clear answers to the most common questions which Barbadians have about the economy so that they can have a better and realistic picture and, most importantly, understand what they can contribute to help improve the situation.

Last October, former Prime Minister Owen Arthur said Government’s fiscal policy was inflicting damage on the country and the time had come for tough measures to stem the decline.

“Sometimes if you refrain from doing what you must do, it inflicts more damage than doing the things that you have to do no matter how painful those things may be. That situation has been reached in Barbados,” Arthur said.

The former Prime Minister, whose views on the economy command respect, expressed particular concern about the debt situation, suggesting rescheduling should be seriously explored to give the Government some breathing space. Interestingly, Sir Frank Alleyne, former chairman of the Government’s Council of Economic Advisors, put this option on the table this weekend.

The pertinent question, though, is whether Government at this stage can pursue debt rescheduling without entering a formal programme with the International Monetary Fund (IMF) which the Stuart administration seemed determined all along to avoid. A formal IMF programme is likely to mean more austerity which naturally would increase the unpopularity of the ruling Democratic Labour Party (DLP).

With an approaching general election, such a move would be tantamount to political suicide. The administration, therefore, finds itself between a rock and a hard place where it has to make a choice between introducing unpopular measures in the national interest and being the sacrificial lamb in political terms. As the administration has always seemed reluctant to fully bite the bullet, it is debatable whether it will willingly choose to so at this time.

This dilemma effectively leaves one option which is calling an early election. Senator Maxine McClean said late last year that an early poll was highly unlikely. However, given the significant change in the political landscape where the Dems are up against the wall, an early election is increasingly becoming a possibility that should certainly not be ruled out. Time, of course, will tell.

6 Responses to Has the moment of truth arrived?

  1. Lilian Lloyd
    Lilian Lloyd January 16, 2017 at 11:09 pm

    LISTENING TO MAUREEN

    Reply
  2. Arthur Collymore
    Arthur Collymore January 16, 2017 at 11:17 pm

    Knowing Stuart the way we do, this clown will do nothing. This is no longer about the well-being of the country but about how obstinate & vindictive he can be in circumstances where he is being call upon to say or do something to address our plight. Rather than telling his leader to say or do something, that jackass George Pilgrim is attacking the opposition for calling on him to do so. Hurry & ring the election bell.

    Reply
  3. harry turnover January 17, 2017 at 10:04 am

    The more you poke at Stuart the further he will retreat.Stuart en gine come out BECAUSE he knows NOTHING about what goes on in his Ministries ..that is the reason he says nothing about everything
    Errol,Tom,Owen,David and soon to be Mia can come on air and talk about ANYTHING that goes on in ANY ministry without stuttering,blinking or swallowing….especially Tom who could tell the Ministers about things that were going on in their Ministries that they weren’t even aware of.

    Reply
  4. jus me January 17, 2017 at 12:47 pm

    So WHO are we going to elect??

    B,s??
    Ha!!

    So you figure Miss Piggy is really Wonder Woman.

    May as well stay with KERMIT.

    I,m Joking I,m joking.

    What I mean is we screwed, REALLY screwed.

    Personally my vote goes to NINJA man, he has survived it all and still stands tall and fit.

    Seriously we down the pan AND round the bend, after that we all know where we end up, and UP TO OUR NECKS!!

    B,s D,s ,like the farmer said when asked about fertiliser.

    Man ! All looks like shite to me!!!

    Reply
  5. Tom January 17, 2017 at 4:48 pm

    After eight years this weakened and distrusted administration still refuses to be more citizen focused and take the voice of the citizen into account in key decisions. Citizens are beginning to feel
    ignored,unheard, and unrepresented and have a right to seek information from the opposition and other sources. We may not at times fully understand the technical details of the remote economic theory being pursued, but we do understand the results when they impact negatively on our standard of living as they will. We need to be kept informed and not to be treated as imbeciles .The government must respond by being more, not less open,and provide real time access to government and those who govern on the issues that affect us. Regrettably, there seemed to be much misplaced competence , vision and value on offer.

    Reply
  6. Tony Webster January 17, 2017 at 6:59 pm

    Listen to C.B.C.’s “Resident Political Analyst”….taped last Friday lucnhtime, and only served up in tepid condition, last night, four days later….( most likely after heated internal debat at George Street), as to which way the wind has shifted, and cold winds are cleared alluded to, and now expected, if not exactly forecast, I doubt whether she has a clue, that she is possibly being used, and for what purpose. Look out for the book :”How to excel at syncophancy and apologistian antics,without breaking sweat”

    Buckle-up wunna three-point seat belts ,peoples: effin you thought the ride was a ruff one this last decade….well….you ain’t seen nuttin yet.

    Reply

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