“We haven’t given that, that type of consideration.” – Minister of Finance Chris Sinckler responding to a suggestion that Government should consider turning to the IMF for balance of payments support sooner rather than later.
The ebullient, never fazed, Minister of Finance acknowledged that the university professor was attempting to steering him gently towards a source of “cheaper financing” especially after the recent rebuff from the more expensive international markets.
But, he insisted that no thought was being given to any programme with the International Monetary Fund (IMF) whose officials have been in and out of the island recently and are due again next month.
“We are set to do an Article IV Consultation with the Fund in December as part of the normal process,” Sinckler said, “and during that time, we will have varying discussions with them on all types of different issues in relation to not only the domestic, but also regional and international situations and how that will impact on Barbados’ economy. But at this stage, we don’t see any necessity for that type of programme right now.”
Recently, I raised the question of what would be the IMF’s view of the economy today compared with that it shared in 2011 after the last Consultation.
Since then, the national conversation seems to have moved beyond consideration of the state of the economy to whether Barbados is primed for a formal programme – warts and all – or what Sinckler called its “conditionalities”.
Almost to a man or institution, local and foreign, there is agreement that Barbados’ economy is in crisis and that urgency in decision-making is required to arrest further immediate slippage and/or to avoid compromising future growth and development.
Among policymakers, there appears to be prior consensus of thought but not of implementation as the Minister’s measures have been met with resistance from within the Cabinet itself.
The professor’s call, therefore, has to be put in its political context, which must appeal to the past as much as the future. The past political rhetoric of Prime Minister Freundel Stuart, when he saw the struggle in terms of class, is an important reference point whenever the IMF enters the political matrix.
Given the politics of politics, Stuart will find going the IMF difficult to digest, even if it is cheaper to borrow from, and notwithstanding that Government is attempting to follow a home-grown austerity programme which mimics that of the IMF.
While a day is a long time in politics, a previous term is never far away, and memories of the early 1990s are like the sword of Damocles over the head of this administration. The sound economic argument that given the current international credit rating it would be cheaper to borrow from the IMF than the market is beyond question. But then there is the politics of the economics.
The untrained mind is left to wonder as Government and its economic advisers admit of an austerity programme designed to cut private spending. The intent is to protect falling foreign reserves which have now become the centrepiece of Government’s fiscal policies. This is a turnaround as it was repeatedly said they were adequate during the period of recession.
The question is what kind of austerity will the IMF introduce that is not now part of the home-grown package proposed in the August Budget? Further, if Government admits austerity in the absence of the IMF, why is it unwilling to access the cheaper money?
The answers must lie in the politics of politics and not in the politics of economics.
For the past five years, public servants and most private sector workers have not enjoyed a salary increase, notwithstanding the rapid rise of prices in all years. By any measure, Barbadian workers are therefore worse off and so too, are most Barbadian businesses.
The notion that political grandstanding can blind everyone to such reality smacks of an arrogance that only time can cure. It is foolhardy to believe that even in the most difficult of times form rather than content is a winning strategy and that logic and ideas are secondary to emotional stimuli.
The obvious strategy of the Government to ignore sound advice from seasoned and well-reasoned professionals is one that continues to put party above country. This is pursued by wrapping rhetoric around obvious decay in the hope that it somehow causes those who are being governed to see those who govern in the best possible light.
The self-interest of the majority being governed is therefore expected to coincide with the latter’s self-serving posture.
Not even the rhetoric of class will suffice, when people genuinely suffer as their leaders repeatedly convince themselves of their ability to use “magic” to escape from the negative effects of poor political judgment and even poorer economic analysis. Even if these two misguided strategies conspire
to confuse the people for a moment, the inevitable social decline that accompanies them will find a way to reveal itself in the fullness of time.
Whether the IMF is invited to the party is for our leaders to decide, but it is better to invite it than to have it storm the party.
• Albert Brandford is an independent political correspondent.
