When Govt no longer has confidence in the Governor

Confidence is arguably the single-most factor which influences economic growth in a country. And the task of creating and maintaining an enabling environment for such growth to occur always falls to Government authorities through the choices they make in determining the kind of policy framework to be adopted.

When the level of confidence in an economy is high, robust business activity takes place and it ultimately translates into strong economic performance. Such growth occurs because the private sector enthusiastically takes on the important role of “engine of growth” which it is assigned in the free market economic model that is dominant across the world today.

When the level of confidence in an economy is high, businesses take on a higher level of risk and invest in ventures which contribute to meeting market demand for goods and services, create much-needed jobs, earn foreign exchange which goes to pay for vital imports, and generate increased tax revenues so that Government can meet its various obligations, such as debt servicing and providing social services, such as health care and education.

Where the level of confidence is low, however, economies struggle to achieve growth and, more often than not, either stagnate or go into decline. Considering the disappointing performance of the Barbados economy over the last eight years, it is fair to say that a drop in confidence has been a major contributor to the various challenges which this island has experienced.

With welcomed signs last year of a pick-up in economic growth that was forecast to continue this year, it is indeed unfortunate that turmoil has surfaced at the top level of a key institution –– namely the Central Bank –– which plays a critical role in the management of the economy. Late last week, news surfaced that certain members of the Central Bank’s Board of Directors had asked Minister of Finance and Economic Affairs Chris Sinckler to remove the Governor Dr Delisle Worrell from office.

The matter came to a head last evening when the High Court held a rare Sunday sitting to hear an urgent application from Dr Worrell for an injunction to block an attempt by Mr Sinckler to fire him. Dr Worrell was reportedly given an option to resign or be fired. The injunction was granted and it means that, at least for the next two days or until the issue is resolved, a situation will exist where, it can be argued, that the Central Bank is headed by someone who no longer enjoys the confidence of the Minister of Finance and the Government by extension.

This is obviously bad news, especially at this critical juncture for Barbados’ faltering image within the international financial community, and represents a potential setback for the economy. It is unclear whether the move to get rid of Dr Worrell is in direct response to the request from the particular members of the Central Bank’s Board, or Dr Worrell’s recent public criticism of the fact that Government was continuing to rely on the printing of money by the Central Bank to finance the huge fiscal deficit, or if it is a combination of both.

We believe the public has a right to know and a statement on the matter is required from Mr Sinckler. A question which obviously arises is whether anyone has already been identified as a replacement and, if so, who that person is. The fallout with Dr Worrell definitely comes as a shock because while the Opposition Barbados Labour Party was saying all along that it had no confidence in him, the Freundel Stuart Government was his staunchest defender.

Indeed, as a reaffirmation of the administration’s confidence, Dr Worrell’s contract was renewed for a second straight term just over two years ago. The decision generated some controversy as Dr Worrell, who is in his 70s, is well past the official retirement age. Dr Worrell was also at the forefront defending the Stuart Government’s controversial economic policies, especially during the past three years, when there was quite often deafening silence from the administration.

In public office, people come and people go because no one is indispensable. However, what matters most is the national interest. In handling this obviously delicate issue, we believe every effort should be made to ensure that the national interest is safeguarded, instead of jeopardized. The days ahead promise to be quite interesting as the island watches with bated breath to see how this latest drama will be played out. We hope for a speedy resolution in the national interest. Regaining any lost confidence, however, is not something that can be fixed overnight. Achieving such an outcome always takes some time.

6 Responses to When Govt no longer has confidence in the Governor

  1. Tony Webster February 14, 2017 at 4:40 am

    Thanks your thoughful analysis Ed. The conundrum that yet taunts me- especially in the time of instantaneous news, and lessons of life that just as fleeting…is how do we ensure that the lessons learned from such national tumults…are passed to the next generation? Or might we be overly-protective: perhaps depriving them of the enjoyment of their own decisions and devices…and “exciting times”?

    The Magna Carta never really got my pulses racing, preferring instead Enid Blyton’s adventurous, rascallious, riveting boys’ adventures. However, now that I have put away childish things…it seems that indeed…there be real monsters out there in Terra Ingognito…in dry, old, critically-important…books and brains…where precious wisdom resides, awaiting discovery, and re-discovery.

    The Human Condition. You cud write a book about it.

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  2. james boyce February 14, 2017 at 5:25 am

    Why is barbados not using the us dollar as it’s offical currency ,time is of great importance

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  3. mervin kellman February 14, 2017 at 7:06 am

    The appointment and indeed the dismissal of a Governor of the Central Bank is the people”s business , it must not be done in any furtive manner nor must it carry the mark of intimidation as appears to be the case here. Dr. Worrell’s re-appointment for a further five year term in office was swift and loudly touted whilst he chose to compromise his professional integrity to present “alternative facts” on behalf of this Government. Now that he has seemingly come to grips with reality and with his conscience. he has become a liability, an “enemy of the state”. He has been asked to jump or be pushed. His once much vaunted presence and guidance is no longer valuable since he reconnected with, reverted to and relies again upon his considerable years of training and experience as an economist and no longer sees himself as merely a creature of the Minister of Finance or a puppet of the Prime
    Minister.

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  4. Tony Webster February 14, 2017 at 2:10 pm

    @James B: don’t know to what extent your tongue is near your cheek, but the answer to that question, might be risk the farm by playing your Trump card? The Fed Reserve’s pow’ful lady chair, Janet Yellin…is ….well…even now Yellin in disagreement wid our New Boy, about THEIR economy!! I am totally unqualified to advise if adoption of the USD would solve more problems than it might create…but I would rather plump for a basket of currencies. Mind you, unless some folks sitting on high places tek finger out very soon, we might have the luxury of making such decisions “off-menu”.

    Which brings us back to confronting the true meaning of “Independence”, hearabouts, and nowabouts.

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  5. Andrew Simpson February 14, 2017 at 2:27 pm

    Regardless of our foreign exchange position, government must become more effective and efficient. We must invent ways for citizens to enjoy an acceptable standard of living without relying on the grail of economic growth, especially by way of constant borrowing. I believe that our country has the potential to produce more value than is needed through the practice of environomic policies. Transparent and accountable management of the various economic sectors can be attained without the cumber of Westminster, by applying readily available modern communications and information technology that engages all citizens on a live digital direct participatory democracy platform.

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  6. Helicopter(8P) February 14, 2017 at 2:51 pm

    You can do as Mr James Boyce utters; that is; if you want to play in the American Football League. One good measure is” Just don’t get tackled and run over! Why? Does Canada conduct it’s official business in U.S. dollars? We are an independant nation with a constitution and with whom we investiture persons to maintain and manage our financial affairs to the best of keeping. Lapsing on key factors of our economy and lackadaisical interjections to halt economic disaster are now our nation’s concern. The problem with general public is; the key two positions of performing the national duty of instructing government-spending are well salaried and compensated to do so.

    Reply

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