ECONOMIST and University of the West Indies (UWI) lecturer Professor Michael Howard says Government needs to tell Barbadians the true nature of the economic recession.
He said Barbados’ economy was in serious recession but not yet in crisis.
“Leading Government ministers have been too silent in recent months in explaining to Barbadians the true nature of the economic recession.The Governor of the Central Bank of Barbados is the only top-ranking official who has explained the problem in simple terms.
“Government politicians need to explain to Barbadians why the present situation calls for a ‘watchful waiting’ strategy,” Howard told the SUNDAY SUN yesterday.
He said the poor performance of the productive sectors was not only short-term in nature but had serious structural problems.
Howard listed the difficulties as contraction in economic growth; contraction in construction output; weak demand for goods and services; decline in foreign reserves; fall in foreign investment; fall in tax revenues; uncertainty in export markets; and uncertain prospects for the recovery of tourism and construction.
“Given these problems, unemployment will remain high and the economy will continue to contract. There is also great uncertainty in predicting the behaviour of the offshore sector,” he added.
The economist also said that while the fiscal deficit should be the principal concern of policymakers, there was still opportunity for discussion on structural issues such as export promotion, privatisation, small business, productivity and the need for greater fiscal efficiency.
“Further, the reduction in arrears of VAT, land tax, NIS contributions as well as the collection of income taxes from delinquent landlords would help to improve the current deficit.
“I am not convinced that enough work is being done in the public sector to increase fiscal efficiency,” he noted.
