HE WHO LAUGHS LAST laughs best, it’s said. But sometimes situations are so tragic that though one has been shown to be right, there is no joy or anything worth celebrating.
This is certainly the case with those who warned the Government about its high fiscal deficit and the danger it was placing the economy, and the future of all Barbadians, in.
Initially, most of these commentators were portrayed as either Opposition operatives or prophets of doom and gloom, but when it became clear they were right, the official word was that Government recognized the situation and was working on it.
It all came to a head, though, last October when our usually quiet private sector spoke out, essentially saying that the economy was critically ill and in need of intensive care treatment.
That statement from the Barbados Private Sector Association (BPSA) was as direct as it was profound. It distinctly articulated the fears of the people who, through their investments and employment, keep this economy ticking over.
They sensed real danger and, in the interest of self-preservation, spoke out.
When has anyone ever heard the private sector in Barbados tell Government in such an emphatic manner to “swiftly” cut spending and take decisive action to deal with fiscal problems before an external agency has to step in and dictate to this country what must be done?
And who can recall business people here matter-of-factly scolding the Government on its unsustainable practice of borrowing to pay its bills?
The fact is the private sector realized that if nothing was said to alert the population to Government’s actions, then everyone in this country stood to lose the social welfare privileges that most of us take for granted.
“We do not believe that widespread layoffs, whether in the public or private sector, is the answer, but the Government of Barbados cannot get away from immediately taking serious and likely unpopular decisions on reforming those ineffective and wasteful areas of public spending that plague us,” the BPSA statement said.
The BPSA’s statement came mere days before an International Monetary Fund report that painted an unflattering picture of the economy and, essentially, advised Government to effectively deal with its excessive spending as its pussyfooting could eventually lead to foreign exchange rationing or, worse, devaluation.
These memories came flooding back on Monday when I saw the DAILY NATION’s Front Page headline Red Zone – Barbados Must Trim Deficit Or Face Another Downgrade. The article outlined the views of Harold Codrington, Central Bank of Barbados Deputy Governor who said the island must keep trimming its fiscal deficit if it was to avoid a lowering of its currency rating status.
“Right now we are on the edge of another downgrade,” Codrington said last Sunday as he addressed the mid-term meeting of the Barbados Workers’ Union at its Solidarity House headquarters.
“We don’t want that, so it is crucial that we keep containing the deficit so that we will move the Government finances out of a danger area.
“It is also the best way to avoid using up the foreign reserves, which, of course, will put the value of the dollar in jeopardy. And here also, again, we don’t want to go there,” he added.
Last June the international credit rating agency Moody’s Investors Service lowered the country’s domestic currency rating to just above junk status, citing concerns about the fiscal deficit.
And in November another rating agency, Standard & Poor’s, lowered its outlook from stable to negative, saying the change reflected the rising risk of a downgrade should a combination of “lacklustre growth and insufficient fiscal adjustment” continue.
When these factors are taken together, it is clear that there is a need for a national dialogue on the way forward for this country, involving the leadership of the private and public sectors and the unions, as businessman Andrew Bynoe has suggested. Like him, I too believe this move may prove to be most effective in tackling the high cost of living.
But this alone would not get things going. There has to be the political will to implement any suggestions. This requires greater dialogue between the political directorate. Here Mia Mottley’s suggestion of a parliamentary select committee made up of MPs from both parties, as well as independents, has much merit.
She first floated this idea last October and it is more relevant now. Such a grouping would be able to identify the areas on which all parties agree, and through consensus see how they can deal with the other challenges affecting Barbados so the best way forward can be found for the benefit of all.
This is not a dream, but a hope. There just needs to be the political will to make it happen.
• Sanka Price is the WEEKEND NATION and SATURDAY SUN editor. Email sankaprice@nationnews.com
