Skyrocketing global energy and food prices may stall Barbados’ efforts to return to economic vibrancy.
But, they can also spur a return to heightened agricultural production, enabling Barbadians to eat more of what they grow instead of importing $500 to $600 million in foodstuff every year.
Those mixed fortunes were detailed by Sir Courtney Blackman, a former Central Bank Governor, and Dr Chelston Brathwaite, a Barbadian who until recently was director-general of the Inter-American Institute for Cooperation on Agriculture.
“The current situation with escalating food and energy prices can be expected to prolong our economic difficulties and economic recovery,” said Brathwaite. “Increases in prices are not going to help at all. We have seen a decline in tourist arrivals and receipts over the last couple of months. There has been a little peak in some areas because of the North being very cold. But that is not going to be sustainable because when things warm up in the North fewer tourists will come.”
At the same time, Dr Richard Bernal, Caribbean’s executive director of the Inter-American Development Bank in Washington for Barbados, The Bahamas, Guyana, Jamaica and Trinidad and Tobago, told the Sunday Sun that the fall-out from rising prices would be felt throughout the region.
“The prospect of a surge in food and energy prices is a concern for the Caribbean, particularly since the region has become over the last few decades increasingly dependent on imported food, not only for the indigenous population but also for the vitally important tourism sector,” said Bernal, a former head of the Regional Negotiating Machinery. “A surge in food prices has many adverse implications for the region, but is also an opportunity. Adverse implications are reflected in inflation, cost of living and increased foreign exchange expenditure for food imports. The opportunities include increased domestic food production and regional production and distribution of food.”
For his part, Sir Courtney, who served as Barbados’ Ambassador in Washington in the mid-1990s, said that the escalation in prices would definitely have a negative impact but Bajans weren’t powerless to reduce the fall-out.
“The rising prices are beyond the control of Barbados, so we can’t do anything about them,” he said. “What we can do something about is we can take measures to reduce the consumption of oil and imported food. The Government can make it more expensive to use oil and therefore reduce its consumption while at the same time reducing our use of foreign exchange reserves.
“People can drive less. Instead of buying a big gas guzzler you buy a smaller, more efficient vehicle. When it comes to food we should be emphasizing the consumption of locally grown food, rather than relying so heavily on imported food. We consume about $600 million in food and that’s a very high bill. We should be looking at how we can reduce our food import bill.”
Brathwaite couldn’t agree more.
“Tourism, in the case of Barbados, drives the economy and if it is in trouble many of the economic linkages backward and forward that are related to tourism would suffer,” he insisted. “That would mean increasing levels of unemployment and increasing difficulty of the Government servicing its financial obligations and responsibilities.
“We have had a very serious Budget presented by the Government which represents in my view an attempt to maintain employment, but at the same time increased taxation has occurred with the VAT (Value Added tax) moving from 15 per cent to 17.5 per cent,” he added. “With increasing cost of energy now, the cost of gasoline is going to increase and once transportation costs increase, everything goes up.”
Like Sir Courtney, Brathwaite thinks Barbados and its neighbours missed a golden opportunity three years ago after food prices “escalated to very high levels”, when they didn’t implement a comprehensive plan with the assistance of IICA and other international organizations.
“Despite the significant amount of work by the international bodies which voiced concern and the need for a new approach to agriculture and food production, very little has really happened,” he complained. “I think that was a warning. Now we have the storm coming and having not heeded the warning, I think we face a real challenge.”
But it wasn’t too late to act.
“The prescription is to take some of the land that we have producing sugar cane and take some of the money we are using to subsidize sugar and invest it in food production,” recommended Brathwaite.
“We should take some of our key farmers, give them the incentive, technology and finance to do what has to be done. We should select a number of key commodities vital to our food security and concentrate on those.”
Blackman said a plan designed to boost agriculture was in Barbados’ best interest.
“We didn’t move fast enough in agriculture when the global crisis struck in 2008 but we can still act now,” he argued.