IN LAST WEEK’S ARTICLE, I wrote that “it will take fresh thinking or more provocatively, the intellectualization of politics to rescue Barbados from its comatose state”. Since the 1930s, we have had social and economic reform, but we now have to pursue the two together with a clearer understanding of their interrelatedness.
In the past, it was believed that the provision of social goods and services was strictly the domain of the public sector, and the private sector was to provide economic goods and services. This distinction was based on the strict definitions of the two ways of delivering the goods and services.
In today’s Barbados, the provision of education is not the task of the public sector alone; indeed private schools were around prior to Independence. In similar vein, there is scope for the private sector to become more involved in health care. In short, there are business opportunities in areas that were once believed to be “social” and by extension in the domain of the public sector.
So the evidence suggests that private entities have always been involved in the delivery of what were perceived to be social entitlements because they were also available from the public sector. In reality, the suggestion that “social” services can be provided by the private sector is not new. What is new is the scale on which such services are facilitated by the public sector through incentivizing private investment in a new economy.
To facilitate the greater private sector investment in both traditional and non-traditional areas of economic activity, a new Government must accommodate the restructuring of the new Barbados economy by getting three prices right: the price of energy; the price of money and the price of technology.
In addition to these prices, public sector accommodation, not to be confused with reform, is a must. Accommodation involves the greater use of technology and the realignment of certain Government departments to spur private sector investment in and private/public consumption of the services.
Since 2008, the worst thing that has happened to the Barbados economy is the return of a belief that there is no right/optimal size of Government. Such thinking is born out of a failure to intellectualize politics, which has its genesis in what is affordable followed by what is available and accessible, given the expected limited financial resources of the Government.
Indeed the current Democratic Labour Party Government has not learnt from the experiences of the early 1990s. The single most important lesson from the period was that the concept of living within our means as a country must start with the Government. This is because the main economic function of the Government is to set the environment for economic growth, fuelled by private enterprises from which it is able to extract adequate revenue without having to increase tax rates indefinitely.
Since governments do not produce goods and services for sale like the private sector, they earn income predominantly from the production and spending of private businesses and individuals through taxation and are able to borrow because of goodwill. This means that the Government, more than any other entity in the economy, benefits from sustained economic growth; it is parasitic, and in the absence of growth that characteristic becomes even more evident.
Apart from this obvious trait, the new economy, in which technology and decision-making are on a fast track, is finding the other trait of bureaucracy an impediment to doing business. This does not mean abandoning transparency and accountability; it means public sector accommodation that is technologically savvy. In a strange way, the new world needs “good old” leadership accompanied by “good new” technology.
The “good old” leadership must include a political dimension that is more broad-based that is giving community organizations, not community councils, a genuine opportunity to influence decision-making. The Urban and Rural Development Commissions are ripe for broad-based participation through a system of democratization.
The “good new” technology must be become more affordable, available and accessible through a joint public-private partnership that appreciates both the social and economic good. In fact, this is a modern-day example of a good that has both characteristics which were thought to be separate and distinct in the recent past. Times have changed and so must our thinking!
However, let me repeat, the key to the future is marrying “good old leadership” with “good new technology”.
• Clyde Mascoll is an economist and Opposition Barbados Labour Party spokesman on the economy. Email [email protected].
