We were told that “Barbados is more than an economy, it is a society”, and the majority of us bought into that statement.
We did so because we interpreted it to mean that there is more to a country than emphasis on a strong economy. People matter – their concerns, aspirations and faith.
We believed that the average person should share in the wealth of the country and Government’s emphasis should have been to ensure those less fortunate were able to have access to affordable housing and quality services at a reasonable price.
In other words, we believed that life was not only about balance of payments, gross domestic product (GDP) and other terms that may be important but are difficult to grasp. And we voted accordingly.
Today, however, even those with no interest in current affairs would recognize that without a striving economy it is difficult to build a vibrant society that can meet the demands of most of its citizens, particularly the disadvantaged.
The more alert have come to realize too, that propaganda wins elections but it can’t run a country. Only getting the economics right does – especially in a recessionary period.
We have come to understand as well that economics is like a dose of castor oil – it works its way through your system and, depending on the strength of your body (economy), can be a satisfying purge or a debilitating experience.
Therefore, pledging to keep every public servant employed is great propaganda, but cannot be realistically achieved when one’s economy is performing poorly. It is, essentially, putting the cart before the horse.
The reality is that our country is in big trouble with a very difficult period ahead. No amount of bluffing, politicking, character assassination, blaming others, insinuations or any other device used to disguise and conceal this fact can change it. And the Freundel Stuart-led administration needs to recognize people’s anxiety on this issue and start engaging the public directly on it.
They need to take the public into their confidence for once and tell the truth. They need to tell the public the extent of the problem, look at the options to overcome it, and the path they intend to take based on what is best to fix the economy without adversely marginalizing and disadvantaging the most vulnerable among us.
Staying silent and hemming and hawing does not cut it. It never did, and in the face of this crisis before us, it is downright insulting to Bajans!
The problem is that Government has to make a $400 million adjustment to its fiscal deficit.
The fiscal deficit is the excess of Government spending over revenue. They’re facing this dilemma because they have been borrowing to pay public servants’ salaries each month for nearly four years, as well as spending significantly more than they earned from taxes.
The extent of the adjustment needed and the gravity of the situation is outlined in the draft Medium-Term Barbados Growth And Development Strategy (MDGS) 2013 -2020, which was presented to the Public/Private Sector Consultation meeting last Thursday.
On Page 28 under heading Public Debt it says in part: “The increase in the fiscal deficit has expanded the central Government debt. To reduce this, the deficit must be contained with a clear and determined policy for its reduction. With debt levels over 100.0 per cent of GDP (this includes the NIS [National Insurance Scheme] and contingent liabilities), Barbados’ ability to service its debt is being almost unbearably stretched, with debt service payments as a per cent of revenues moving from 28.1 per cent in 2011 to 31.7 per cent in 2012.
“More and more resources are being channelled away from productive usage to the payment of debt due to increased current spending.
As such there is a decisive need for action to regain investment grade status and to create the fiscal space for Government to contribute, in a significant way, to growth and development through productive activities.”
On Page 29 under the heading Debt Challenges, the MDGS further states that the Government recognizes the risk a higher level of public debt can pose and so it intends to return Barbados to investment grade and secure a greater level of debt sustainability.
And on the same page under the head Fiscal Measures and Debt Policy 2013-2020, Government outlined how it hopes to achieve this.
It says: “Cuts will have to be made to current expenditures, primarily wages and salaries, goods and services, and transfers and subsidies. It is estimated that to bring the deficit down to about 4.7 per cent of GDP, from its current position, current spending will have to be cut by over $290.0 million.”
By the time the Central Bank Governor Dr DeLisle Worrell spoke on Thursday, he put the cut needed at $400 million.
Why the disparity? Could it be that the situation deteriorated so swiftly between the preparation of the document and the meeting?
These questions and more Government needs to tell the truth on.
What we know for sure is that time is running out for all of us in this fair land.
• Sanka Price is a NATION editor.
