When all except our Government seem wrong about the economy
“Even with the downgrades, where we are down to ‘C’, Barbados still has the capacity to borrow . . .” – Parliamentary Secretary in the Ministry of Finance Senator Jeptor Ince, speaking in the Upper House this week.
It has always been said that laughter is the best medicine.
Equally, optimists, including many of us, are always eager to see the glass half full instead of half empty, especially given that research has shown that it not only makes you happier, but healthier and wealthier too.
In one such study done in the United States by psychologist Susan Segerstrom it was found that ten years after graduation, law students who were optimistic earned an average of $32,667 more than their glass-half-empty peers.
Therefore; it seems logical to conclude that if we expect good things to happen, we will take actions that produce positive results, and, conversely, if we expect bad things to come our way, it will stop us from doing the very things that might have minimized or avoided such calamity.
With that said we simply cannot afford to bury our heads in the proverbial sand, given the grim economic truth that is presently before us.
It is that our economy is operating pretty much like a run down LIAT aircraft — worryingly in the red and on course for a disastrous nosedive.
But now is definitely not the time to shoot the pilot and co-pilot, otherwise we could all end up with blood on our hands, even if they would stupidly wish to put Flight Barbados on auto-pilot and shut out any semblance of negativity even if it comes in the form of an international economic forecast that is best used to gauge the changing political and economic winds, so that all may brace for the seemingly inevitable changes.
In fact, if our foreign reserves continue to disappear at the rate they have been going, by June we could be left without any form of cover, fully exposed to the elements; which means our precious dollar, our assets and everything else we hold dear, could be gone with the wind, unless we change course now.
This is why it was so unsettling this week to hear the Parliamentary Secretary in the Ministry of Finance Senator Jeptor Ince, who should know better, suggesting that there has been no negative fallout for Barbados from the two recent Standard & Poor’s and Moody’s downgrades.
Yes, Patrick Todd has a point when he says it can’t be all doom and gloom, but for his fellow Government Senator Mr Ince to go as far as to suggest that Barbados can still borrow its way out of the current crisis when we are already up to our noses in debt, is really an affront to our system of free education and our founding father Errol Barrow’s principled position in crafting such.
For while Mr Ince may wish to convey his mastery of economics 101, the fact of the matter is that for Barbados to stay afloat, the current debt, which was estimated at 111 per cent of GDP, as at December last year, must of necessity come down.
Furthermore if our dollar is remain stable we have to bring down our equally worrying deficit.
So it matters not if the United Arab Emirates is still willing to lend us money, or the Israeli government for that matter, right now our Government must curb any such temptation, less our economy is wiped out for good like the Super Constellation Naval Airliner, Flight 441, which disappeared without a trace in the Bermuda Triangle back in October 1954.
The point is that our need for optimism needs to be balanced with urgent pragmatism.
Therefore, it is not enough for our Prime Minister or even the visiting former Central Bank governor of Ireland Patrick Honohan to tell us that devaluation is not the best way out.
With all respect to both gentlemen, we already know that, even though it was interesting to note that Minister of Finance Chris Sinckler actually entertained his position on the International Monetary Fund (IMF), given Government’s acquiescence to any such suggestion by economists here.
However, we note that during his courtesy call with Mr Sinckler this week Mr Honohan was allowed to openly share Ireland’s experiences, including going to the IMF.
According to a report issued on the meeting by the Barbados Government Information Service, the former central bank governor also stressed that any country engaging the IMF should develop its own plan to take to the institution, for which there should be national buy-in.
Sounds very familiar!
However, we wish to caution that neither that piece of commonsense advice nor Mr Sinckler’s latest assurances that foreign investors still find Barbados attractive, will arrest the current economic slide.
But what will, is some decisive economic action. Otherwise, God help us all!