THE MUCH ANTICIPATED Public/Private Sector consultation has come and gone, and we’re no wiser as to what measures will be implemented to save this economy from contracting even further as the fiscal deficit widens like a yawning chasm.
What we do know, however, is the specific adjustment that needs to be made to the deficit: some $400 million, thanks to the presentation of the Central Bank Governor who, despite his usually upbeat demeanour, has been brutally honest with a string of gloomy figures coming out of a medium term fiscal strategy (MTFS) that has not worked.
Now I’m totally apolitical but in the interest of fairness, I must ask why some small segment of these needed cuts weren’t made since early last year following an increase in revenue in 2011.
The answer is clear and purely political: elections were approaching and while, to the credit of the ruling party, they didn’t repeat the ominous phrase “we never had it so good” but actually admitted by the end of 2012 that the economy was only expected to grow by 0.7 per cent, they took none of the two necessary options toward ensuring a return to growth: cut public sector workers and/or privatize some Government-owned entities.
One would have caused pain in the short term and the other over a slightly longer period via companies’ restructuring, but by now the economy would have been on a path of growth.
However, the election put paid to any thought of risking those options and they became instead, the mantra of what a caring government would not do.Now that the polls are fading into memory, and everyone – Central Bank, private sector, leading economists, Opposition, and the Prime Minister himself – is saying that urgent action is needed and “sacrifices” must be made, Barbadians want to know exactly what those sacrifices will be.
The word itself connotes hardship, but in this instance it must be balanced by the essential maintenance of the safety net for the poor and vulnerable among us which, as economist Ryan Straughn pointed out, may soon be nearly all of us.
But what about the working poor – those who live from pay cheque to pay cheque – who could be among the first on the breadline if austerity measures to the tune of a $400 million adjustment are implemented over the next year?
Is there a way in Barbados’ economic structure to tax the rich? We’ve already overtaxed the middle class via the removal of allowances since December 2010, so much so that spending has basically dried up; so can Government either appeal to the wealthy class’ love for Barbados or tax their collective massive annual dividends from private – and to some extent public – corporations?
Has anyone thought of a smaller version of United States President Barack Obama’s budget in April which raised taxes on the richest households by $600 billion – not by raising rates, but by reducing the deductions those households can take?
This would obviously be accompanied by strategic cuts in Government spending.
Whatever the measures, there needs to be no fear that the script will follow that of 1991-1994, for having emerged from an election where the Opposition did a marvellous job of leading national discussion on the main issues – CLICO and the economy with its attendant issues of junk status, a failing MTFS and bizarre comparisons with growth in places like Guyana and Haiti – it’s clear that the masses can swallow the harsh truth and still act sensibly.
In the meantime, I came away from the opening of last Thursday’s consultation feeling unfulfilled because the Leader of the Opposition was not given an opportunity to speak.
I know it’s not the norm but these are not normal times. That was glaring as I witnessed chairman of the Barbados Private Sector Association John Williams and representatives of two workers’ unions going to the podium in a no-nonsense mood.
For Mia Mottley to have spoken, therefore, it would have instilled a sense of greater confidence among Barbadians that the economic situation was being portrayed with honesty and transparency, and far beyond platitudes and partisan concerns.
Had the Opposition been given that historic opportunity to address a Government-sponsored national consultation on the economy, any attempt by its leader to drive a nail in Government’s coffin or “make somebody look bad” would have been disrespectful, childish and akin to hitting a man while he’s already down.
Such a gracious gesture from the Government would have shown that Barbados, as a democracy, has truly matured; for if this economic crisis doesn’t bring our people together, then nothing will.
• Ricky Jordan is an Associate Editor at the Nation. Email rickyjordan@nationnews.com.