How special is Barbados?
Dear BT reader, How special is Barbados?
This question is one which we must ask ourselves in,= a very serious way.
Since 2008, the present Democratic Labour Party (DLP) government has been blaming the global recession — the worst in our lifetime, spokespersons have said consistently — for the absence of growth in the economy.
Giving consideration to this argument, it dawned on me that other countries in the Caribbean somehow have been shielded from this global economic recession. Their economies are growing and, to the best of my knowledge, have not had anywhere near the number of credit rating downgrades as Barbados.
So again I ask: how special is Barbados?
On Monday last week, the Minister of Finance articulated a view that some esteemed Barbadians had come forward to serve on a revamped Council of Economic Advisers. By the Friday, however, the Prime Minister had announced that he had formed two committees — one to look at the fiscal deficit and the other at the reserves.
Now if this is the case, one must surely ask, why does the Minister of Finance Chris Sinckler still hold that portfolio? Any person with a modicum of self-respect would have surely resigned, if their boss had publicly appointed not one, but two committees comprised in part of people with no experience in either area, to advise on what should be done in the area that the minister has specific responsibility for.
Yet, the Prime Minister would say that he has full, total, absolute and complete confidence in his Minister of Finance, such that he is allowed to go to Parliament on Monday of this week and present the Estimates of Revenue and Expenditure 2017/2018 and an Appropriations Bill to authorize the Government to keep spending from April 1, 2017.
I ask again, how special is Barbados?
Of course, by now you are aware that Barbados has suffered two credit ratings downgrades in the last week. Admittedly, I cannot say that I was surprised by the conclusions of the ratings agencies but it is evidently clear that the firing of the former Governor of the Central Bank of Barbados and the related public brouhaha were perhaps the principal cause for their actions.
Nothing panics investors more than when the credibility of central banks come into question. The former Governor said the printing of money had to stop, the Minister of Finance fires him on a time delay and states that the printing of money will continue. Having appointed the Deputy Governor to act as Governor and with no clear public statement or signal from the new Governor on this matter, investors have concluded that the Central Bank will continue to print money, further damaging the Bank’s credibility.
Beyond this debacle, most of you perhaps missed the most poignant part of the Standard & Poor’s commentary on the credit downgrade, which I find most distressing. At the end of the release, they usually state how they arrived at their decision to downgrade but this time the following text was included.
The committee agreed that the “institutional and governance effectiveness” and “economic” assessments had deteriorated. All other key rating factors were unchanged.
Rating agencies usually report on economic fundamentals and whilst these may fluctuate, investors would act accordingly, taking the economic business cycle into consideration.
However, when investors are given a clear message that institutional and governance effectiveness had deteriorated, they run for the hills or as far away as they can get from what is close to an unmitigated disaster.
The Prime Minister, Minister of Finance and the rest of the Cabinet do not seem to understand the gravity of the problem confronting Barbados. The Prime Minister, it seems, continues to demonstrate total ignorance of the subject matter.
As the country’s leader, his recent utterances in relation to the downgrades place Barbadians at risk of being viewed internationally as either economically illiterate at best or, at worst, being contemptuous and arrogant.
This stance adopted by the Prime Minister and his Cabinet ignores the consequences for Barbadian companies whose ability to borrow is negatively affected, in terms of who they can borrow from and the rates of interest at which they can borrow.
This folly has led to the re-domiciling of Barbados’s oldest company to Bermuda. I ask you again, how special is Barbados that we should be afflicted with such ineffective leadership?
The economic success of any country usually requires a clearly articulated vision on the part of its leadership, but any such vision must be buttressed with a strong sense of pragmatism. When one’s focus is purely on the political and not public policy, then the respect one would usually command quickly erodes.
We all know that the leadership of this country is so far off course but it is our respect for the office that has allowed this to continue for such a long time. Barbados is a special place, but we can no longer rest on our laurels and assume it will remain so.
Hard work and dedication from our leadership would inspire the rest of the country to put in that little extra. That is the spark that is missing right now is this country. Purposeful leadership. Martin Luther King once said, “In the end, we will remember not the words of our enemies, but the silence of our friends.”
The DLP, as an institution, is not our enemy but the actions of their current leadership can be regarded as a very serious affront to the people. However, the silence of those whom we the people may consider friends, is deafening.
Barbados Labour Party leader, Mia Mottley, has said consistently that “The voices of Opposition must be louder than the voice of the official Opposition”. She believes, like me and many others, that “The power of the people is greater than the people in power”.
She has inspired me to join the ongoing struggle to make a better life for our people. I know that with her leadership, ably supported by myself and others, that Barbados will rise from the ashes like the phoenix reborn.
The Barbados Labour Party has a strong track record of delivering for the people when they need it most. I am confident that with sound economic policy management, purposeful leadership and together with you, Joan and John Public, we will regain our self-belief and self-confidence and show the world how truly special Barbados is.
(Ryan Straughn is a University of the West Indies (UWI) and Central Bank of Barbados-trained economist. He is the endorsed Barbados Labour Party candidate for Christ Church East Central. Email: firstname.lastname@example.org)