The Central Bank’s first quarter report indicates that the economy is showing signs of slow recovery and small growth of just about one per cent is expected for this year. The international economy is still challenging!
This is not particularly good news for businesspeople and ordinary Barbadians who are hoping for some amelioration of the economic landscape after the past several years in which the cold winds of recession have dampened many of the aspirations of those of us who had plans to get on in the extraordinary circumstances of our lives.
Some of our larger and more established entrepreneurs have also not been able to move forward with their planned investments, especially within the tourism sector and indeed the flagship project of the Four Seasons has had more than its fair share of the fallout from the direct impact of the recession.
The Central Bank also reports a reduction in the nominal percentage of the deficit relative to gross domestic product, but the news that our foreign reserves grew by only some $3.8 million is a daunting statistic, when we reflect that the first quarter ended on April 15, which is the date traditionally signalling that to all intents and purposes we have completed the winter season.
One would normally expect a much bigger boost to the foreign reserves at this time since there is a traditional fall during the third quarter, even though the Crop Over Festival has been revived and developed to help deal with this problem.
It is very clear therefore that this is not time to “spread joy”; a steady hand on the tiller is still required to carry the ship of state through the prevailing economic waters.
This does not mean that specific local measures should not be considered, and implemented wherever possible, to provide some insulation against the harshest impact of difficulties in our trading partners from whom we draw people and companies for our tourism and financial services sectors.
Yet the very recent news is not so good. The British are now said to be experiencing double dip recession and Spain has been downgraded while the United States economy is not recovering as quickly as one would like, given its spin-off impact on our country.
Each economy is unique, but we note that while President Barack Obama bit the bullet and provided a stimulus to the American economy by lending to the banks and to the automobile industry, the British coalition has been seeking to prune expenditure and increase revenue. Mr Obama’s policies appear to have worked to an extent that the banks have survived and the automobile industry is once again making profits.
The bottom line, of course, is the attempt everywhere to ensure that jobs remain available, or at any rate are not lost, and this approach holds good in Britain and in the United States and is the stated policy of the DLP administration.
In all of this and particularly in small, open and dependent economies like ours is, the policy choices are limited and very careful and skilful decision making has to be the order of the day if steadier and more pronounced economic growth is to be achieved.
“Uneasy lies the head that wears the crown” is an ancient political truth, but a degree of thinking outside the box must nowadays accompany the observance of received economic doctrine, if confidence is to return to the metropolitan markets and to our domestic environment.
The latest signal from Government that it will look at the REDjet and Almond Beach issues is therefore good news. Whatever comes eventually of these talks, the symbiotic relationship that must exist between Government and the corporate sector in any democracy compels this development, and all right-thinking Barbadians and, indeed, the workers and companies affected will hope for solutions that would avoid the collapse of these enterprises.
