When are we going to take what has gone wrong in the Barbados economy seriously?
When it is too late! I feel even more obligated to warn Barbadians of the real dangers facing this country. It took 42 years for our people to reach a certain level of comfort because of the serious Governments in the post-Independence period.
In the last four years, a misguided Government has sought to lay blame for its fiscal ignorance on an international economic environment. Such ignorance now threatens to undermine access to things which we thought would be readily available to us in the future. Something as basic as access to tertiary education that is still the key to our future growth and development is now to be financed by compromising a prized possession – our National Insurance Scheme (NIS).
For a people that exercised the wisdom to manage our limited resources with prudence, we do not seem urgent enough in understanding how far off course we have gone. The dream of going to university is now a target for attack by the Government rather than a source of opportunity for our people. I could never have anticipated this day and this is all because of complete mismanagement of our country’s limited financial resources.
We stood out in the Caribbean because Barbadians accepted that payment of taxes is the way to make available opportunities which could be accessed only by collective sacrifice. We built a middle class on the back of education. We developed a social network that was the envy of larger and more developed countries.
Do we understand that the positions which we held in the United Nations Human Development Index were a direct result of the investments made in education, health and other social entitlements? The notion that the Barbados economy alone carried us to such enviable heights is false. It was a combination of sound economic management with few exceptions and our ability to appreciate that our size was not a constraint in the pursuit of betterment for our people.
Not to appreciate that the economy and the society are inextricably linked was the basis for the current Government to seek to separate them. This fundamental piece of insight eventually reflected itself in how the downturn in the economy was addressed.
Barbados is now the worse for it as the Government stayed clear of tradition and wisdom, so jealously guarded in the past. The level of indifference to our history of prudence is responsible for the plight of our households and businesses, not the international environment.
When caught in an inevitable fiscal crisis caused by failure to attend to detail, the Government justified its action by putting greater weight on a public sector job than a private sector job. As such, the private sector shed 16 000 jobs over the last four years, but the Government is able to boast of not one job lost in the public sector.
Having burdened households and businesses with excessive taxation to redirect financial resources to support its shortsightedness, the Government argued that it was best to extract more taxes from a shrinking economy.
In recent weeks, the same Government is boasting of cutting expenditure by just over $300 million in the last fiscal year 2011/12. Miraculously, this has been achieved without affecting the quality or quantity of services provided by the Government. Barbados has therefore stumbled on a new economic model, which classifies spending according to the means of finance.
So the fact that the University of the West Indies, the Barbados Tourism Authority and others have been forced to borrow from the NIS implies that Government spending has disappeared overnight in these areas. Government spending has temporarily gone underground.
The future of Barbados is being compromised at the altar of fiscal ignorance. The magnitude of the ignorance is unsustainable. We are losing our ability to be self-reliant. We are now forced to sell our policies to the Inter-American Development Bank for survival money.
We have reached the stage where the NIS has become a second Consolidated Fund.
In the midst of the wrong turns, we were told how stable the economy is. However, the Governor of the Central Bank delivered these words in Washington on June 7: “We are by no means out of the woods: inflation is too high, unemployment is too high and growth is too low.”
Oh, how times have changed!
• Clyde Mascoll is an economist and Opoposition Barbados Labour Party spokesman on the economy.
