AS WE APPROACH the end of a momentous and trying year, the economy is still a front-burner issue and our country is situated at the point where the last Budget represented the important steps of a plan for the improvement of the economy in the face of the lingering international recession.
The increase in the rate of value added tax (vat) has been used as the major plank in the effort to close the deficit but that is a two-edged sword since it is intended to bring in increased revenue but it may have the unintended result of dampening activity and demand, and the anticipated revenue may not accrue.
In the meantime, of course, the VAT is a regressive tax in that it bites equally effectively on the poor and on the better off, and it is always difficult for a Minister of Finance to choose between policy alternatives when the choice, whatever it is, will cause some inconvenience and possible hardship, but when the measures may be necessary for the general improvement of the economy.
Uneasy does indeed rest the head which wears the crown.
It is this impact on the man in the street of the international recession which was recently spoken of by outgoing president of the Caribbean Development Bank, Dr Compton Bourne.
The learned economist recently remarked that while the Government had been engaged in a number of things to minimise job losses, when he “encounters people and they say things are hard . . . there is probably a lot more pain than the official statistics show”.
Significantly, he also went on to say: “I think we don’t know enough about the extent of the crisis on the man in the street in Barbados.”
More directly, but in similar vein, the general secretary of the Barbados Workers’ Union was recently vigorously arguing and pressing for the minimum wage to be increased from $200 per week to $300; and urging employers to be considerate of the position of workers and to recognise the deleterious impact on the economy when workers are laid off in these recessionary times.
These statements by two responsible leaders of the society will, we know, be taken seriously since the present Government has declared itself fully in favour of creating a society and not just building an economy.
We therefore anticipate, indeed we urge, that the safety net of social measures which will increasingly come under the scrutiny of the Ministry of Finance should receive the sympathetic eye of the minister for in many cases, the safety net is the only net available to the very vulnerable within our society.
We also urge Government to streamline its system for the payment of workers whose casual employment is often necessary, but whose remuneration from such work is often delayed on account of bureaucratic procedures.
It makes bad enough worse if timely payments cannot be made. It is like adding insult to injury at best, and more so in difficult times!
As we brace ourselves for the challenges which lie ahead, we must all pull together with the administration to improve our economy, always recognising that we are all in this together, and that the chain of our economy is as strong as its weakest link.
Happy New Year to all!
