The sheer nature of the Financial Statement and Budgetary Proposals presented annually by the Honourable Minister of Finance is such that the proper context within which the policies, programmes and plans of the Government for the upcoming financial year are outlined must be adequately explained to the general public to provide a basis for intelligent discussion of the contents of the Budget.
Failure to adhere to this rudimentary principle could only lead to confusion on the part of all those with a keen interest in the policy debates and who genuinely desire to contribute meaningfully to national dialogue on the current and future state of affairs of the local economy.
But setting the proper context for the Budget is apparently even as critical from the perspective of those actually making the presentations. And the basis for that inference is supported in many instances by recent budget presentations in several Caribbean countries, Barbados being no exception.
For example, in last week’s presentation of the 2011 Budget, the Honourable Minister of Finance said this: “Barbados has its challenges but we are no worse off than any other country, and better off than most in the wake of the worst global economic and financial downturn in recent memory.”
Unless the Minister of Finance has a somewhat vastly different framework that he uses to undertake comparative economic analysis, I cannot see how that particular characterisation of the current state of the Barbadian economy relative to other countries can stand the test of time.
In fact, even if I am prepared to give the Minister of Finance the benefit of the doubt today, I certainly have little choice but to disagree strongly with him when we take into account the medium and long term.
Why have I adopted that stance?
In my humble opinion, an adequate response to the 2011 Budgetary Proposals cannot be forthcoming without a proper contextual basis.
This position logically begs the question: what is the proper context within which the 2011-2012 Budgetary Proposals can and should be evaluated?
To adequately address this critical question, one must make a comparison between the economic circumstances facing Barbados today and that which existed in the early 1990s when the country was forced to adopt a structural adjustment programme that subsequently stabilized the local economy and put it back on a growth and development path.
Without delving too deep into prevailing economic conditions then and now, it is safe to observe that in the early 1990s, Barbados faced a severe economic crisis, but does not at the moment.
In the current environment, the country faces a major fiscal predicament which, if not resolved, will eventually lead to an economic catastrophe.
And that distinction between the economic climate in the 1990s and today provides the proper context for measures that should have been announced in last week’s Budget by the Minister of Finance.
Specifically, the proposals should have contained bold but creative measures to reduce current expenditure more so than anything else.
No amount of revenue-raising policies will resolve the problems the country faces on the expenditure side. That simple conclusion is the plain truth.
