At the very core of the plan to save our country from recession must be a strategy to reenergise production in Barbados’ agriculture, construction, manufacturing, tourism and international business sectors.
We have to start with the enterprises that exist in these crucial sectors of our economy, and bring to bear state-sponsored initiatives that will lift them to higher levels of performance and cause them to multiply.
Firstly, there must be efforts by the governmental administration to establish a close and intimate “partnership” between Government and these sectors – a partnership in planning; a partnership designed to literally invent comparative advantage for enterprises in these sectors by extending to them a wide range of incentives, privileges, assistance and institutional support; and a partnership in ensuring that the jointly constructed plans are carried out and actualised.
Secondly, there must be a governmental programme to make long-term credit available at extremely low interest rates for productive investment in these sectors. Essentially, farmers, hoteliers and manufacturers must be able to secure loans for productive investment in their enterprises at nominal interest rates of one or two per cent per annum!
And when we speak about a partnership, we are contemplating a relationship that is much more profound than the Social Partnership or than the manufacturers’ association meeting with the Minister of Finance and presenting him with a wish list two or three weeks before the annual Budget presentation.
Rather, we are talking about a process of intimate and institutionalised planning, in which the two parties routinely sit down together and work out in detail an expansionary and developmental strategy for each sector, undergirded by the deliberate and conscious use of the formidable power of the state.
In manufacturing, for example, we visualise a range of enhanced possibilities for Barbadian manufacturers in such fields as garments, furniture, metal fabrication, food and beverages, office equipment, scientific and medical instruments, solar technology, pharmaceuticals and plastic goods, provided the state plays a leading role in encouraging, directing and supporting the relevant initiatives.
Outlines of the prospects in agriculture, tourism and construction may be found in the PEP’s 2008 election manifesto.
We now turn our attention to a possible source of financial resources to be used by the Government in providing long-term credit at nominal interest rates.
The most obvious source is Venezuela’s Petro Caribe Energy Cooperation Agreement. If Barbados was to participate in and to purchase its petroleum supplies under this arrangement, we could convert almost one-half of our annual petroleum expenditures into a 25-year loan at a nominal interest rate of one per cent per annum. Our Government would therefore be in a position to utilise this deferred expenditure by using the freed-up funds to make sound, long-term loans to local farmers, manufacturers and hoteliers at a similarly low interest rate.
Once the loans made by Government are sound loans which will be repaid to the Treasury over a period of years, there will be no danger of a national accumulation of debt.
• The PEP column represents the views of the People’s Empowerment Party. Email [email protected]
