COULD OWEN ARTHUR’S decision to bow out of elective politics have come at a more inopportune time? I unapologetically believe so.
Though he did not say exactly when he would be leaving the fray, the current times demand the presence not only of an elder but also of someone with proven economic expertise in the hallowed halls of Parliament and on the active stage of public life.
While I would be among the first to admit that Arthur’s appearances in the House have been infrequent in recent years, his speeches therein have not been without merit and have actually presented some alternatives which, in retrospect, hold a modicum of worth when placed alongside what is happening now in the economy – nothing.
And within the last week, few events could have brought home the critical stage Barbados is at in terms of its economic well-being than Friday’s meeting of the Social Partnership and the wary approach to the renewable energy sector as shown by Barbados Light & Power. Arthur has to be saying “I told you so” by now.
The country’s business sector told Barbadians in no uncertain terms Friday that this economy, which contracted by 0.4 per cent in the first three months of the year, is in danger of collapse despite the fact that most people are going to work and children attending school as usual.
Contracting economy
All looks well on the surface but the fact that the private sector has admitted taking all the necessary steps to deal with the contracting economy, of which they get a bird’s eye view before anyone else, is instructive and should prepare us for something bordering on apocalyptic if drastic action is not taken soon.
Although I sincerely believe some businesses can do more in terms of exploring new opportunities and angles for their products, it is clear from listening to head of the Private Sector Association John Williams that a lot of thought and discussion has been ongoing among the business movers and shakers in recent months; and these have led to the hard decisions and restructuring now being seen across the business landscape.
Government also has to act as soon as possible, not just by admitting that the medium-term fiscal strategy has failed but by using the proposed national consultation due for June 28 to formulate a new or revised strategy and business model that may, sadly, see casualties in both the private and public sectors.
In addition, the private sector’s cry has come less than two weeks after Government went to Parliament for the fourth time in five years for an increase in the amount of Treasury Bills and Tax Certificates it can issue. The limit has been raised from $1.75 billion to $2.75 billion, but the private sector has highlighted how fiercely unwilling creditors are to take up medium term or long term bonds.
By now, therefore, Arthur must be fed-up that after his repeated warnings and the loss of an election, the current administration seems to be making no progress in reversing the downward economic trend?
Then there’s the renewable energy sector which was described in the Throne Speech as the centrepiece of Government’s economic strategy. Arthur said in a recent interview that while this sector was worth supporting and had featured in the strategy of his administration, one should not overstate its immediate potential.
“The investments in developing alternative energy have not yet started in any significant way. I’m not crying it down, but do not believe that it can be a major element in your short-term growth strategy unless there’s significant private investment in building the capacity . . . . When in 2012, a man can tell me ‘new investment and strategies under development to create an ethanol plant are expected to yield annual exports of US$264 million’, this is unrealistic,” he said in the SUNDAY SUN’s April 28 Big Interview.
I was therefore not surprised at BL&P’s managing director Mark King’s conclusion last Thursday that the renewable energy strategy would not be a “quick fix” for the overall economy nor householders’ daily rising energy costs.
And while I sincerely wish for the miracles that would see some solid investment in Four Seasons and a resolution of the CIL Financial albatross, it makes no sense looking and sounding upbeat in the face of continued borrowing of billions by Government to issue bonds that are basically regarded as “junk”.
Action is needed now, and in my view no more strident and believable voice on the economy is likely to resonate as much as Arthur’s, since his conviction is not only based on a political agenda but, more importantly, on experience as a Prime Minister and expertise as an economist of 40 years’ standing.
• Ricky Jordan is an Associate editor of THE NATION.
