More economic questions than answers
The dramatic events of the past fortnight that culminated with the firing of Central Bank Governor
Dr DeLisle Worrell last Friday, would have served as a temporary distraction from what undoubtedly is the most critical issue facing Barbados at this time.
We refer to the urgent need for an intensified effort to contain Government spending and to bring down a still unmanageable fiscal deficit so as to eliminate the need for Central Bank financing – a.k.a. the printing of money – to cover basic expenses, such as public sector salaries that ordinarily should be met by revenue.
It was reassuring to hear today from Minister of Finance and Economic Affairs Chris Sinckler that these issues are indeed receiving serious attention and that progress is being made, though not as fast as Government would like.
He also gave assurances that the foreign reserves, though at a lower than usual level, will soon be boosted through expected hard currency inflows. It was disappointing, however, that Mr Sinckler declined to shed any light on the reason for the dismissal of Dr Worrell, a matter of great public interest.
Mr Sinckler’s assurances, however, are unlikely to fully satisfy the concerns of some Barbadians since he did not present any new clear-cut strategy to achieve the above-mentioned fiscal objectives. Many remain of the view that the Freundel Stuart administration is running out of options and tougher decisions have to be made.
Taking the bull by the horns, however, carries the strong likelihood of the ruling Democratic Labour Party (DLP) paying a dear political price. It is debatable, therefore, in the current build-up to a general election, whether the DLP would be prepared to willingly offer itself up as a sacrificial lamb as its stated political objective is to win a third term.
Country should always come before party but it so happens sometimes that doing what is expedient instead of doing what is right is what occurs in politics. In the DLP’s case, the ruling party has lost considerable credibility because of its economic management over the past four years in particular. After leading the country to believe ahead of the 2013 general election that the economic situation was not as dire as critics were saying, Barbadians found out, a few short months afterwards, that the country was indeed in the grip of a serious crisis.
A 19-month stabilization programme was introduced and the population was asked to bear some sacrifices in the form of higher taxation. The 19 months have long gone but instead of seeing an all-round improvement, the problem appears to have worsened in some respects with Barbadians feeling as if their sacrifices were in vain.
It seems, based on public reaction following the dismissal of Dr Worrell, that while Barbadians are generally happy to see him go, that they equally blame
Mr Sinckler for the island’s current predicament. Indeed, there were many calls for Mr Sinckler to go as well, reflecting the fact that confidence in his ability to achieve a turnaround has plummeted.
At his news conference this afternoon, Mr Sinckler acknowledged that even though he has readily shared information with the public on the economy, doubts remain and he was at a loss as to what else he could say. Whether he was conscious of it or not, this statement powerfully spoke to the underlying lack of confidence in his ability to deliver and by extension the Government’s.
It would be interesting to hear the reaction of Minister of Agriculture Dr David Estwick to Mr Sinckler’s statement. Is he confident now that Barbados is on the right track or is he still firmly of the view which he expressed last week that the sick economy is receiving the wrong medicine? As the Johnny Nash song said, there are more questions than answers. And the best person to provide the answers is Prime Minister Freundel Stuart as head of Government, on whose behalf Mr Sinckler is acting.