It really does pain me to see how Barbados’ economic circumstances have been trivialised over the past seven years, by a combination of people who should know better and some who simply have no desire to know.
It is a visible microcosm, who though small in number, are poised to leave a legacy that truly contradicts our motto of pride and industry.
In a recent speech delivered to “Bajan New Yorkers”, Prime Minister Freundel Stuart demonstrated that he belongs to the second group, when he reduced Barbados’ economic circumstances to the following folly: “Contrary to what you may read or all that you may hear, Barbados is still 166 square miles. It is still the most easterly country in the Caribbean. Children are still going to school. Buses are still running. Families are still going to church. Supermarkets are still open and all of the dynamics of everyday life are still intact.”
This is the kind of folly that is elevated to stand on stilts, receiving the admiration of some who are inclined to look up to the source rather look down for the substance. Barbados is figuratively and literally being managed from on high, as two critical characters display the same kind of contempt for the public.
In direct contrast, serious researchers at the Central Bank of Barbados have been studying the four recessionary periods, namely 1981-83, 1990-93, 2001 and 2009, experienced by the Barbados economy. They noted that that “while the combined effect of the most recent episode [2009] and the ensuing four years [2010-2013] of weak growth were not as severe as previous recessions, the protracted nature of the current economic recovery has generated much debate and concern”.
They are some who should know better that have refused to share the findings of these researchers with the public. The most noteworthy finding is that the ensuing four years of weak growth were not as severe as previous recessions. Yet the public was made to believe by the Prime Minister, the Minister of Finance and other policymakers that the most recent recession was the worst in our history since the 1930s.
The researchers also found that “the lack of sustained traded sector-led growth in the post-recession phase of each recession, and the degree of fiscal space prior to the recession, are critical factors that determine the nature and depth of recessions in Barbados”. The traded sector is the bane of sustained growth in Caribbean economies since earning foreign exchange is the “without which not”.
In essence, access to foreign exchange is the most critical economic constraint in sustained growth. In fact, the only reason why Barbados has avoided going to the International Monetary Fund (IMF) is because during the most recent recession, the foreign exchange reserves remained adequate as pronounced repeatedly by the governor of the Central Bank over the period.
In contrast, even though the Government’s fiscal position was much better than now, the lack of foreign exchange forced it to go to the IMF in 1991.
This leads to the second part of the researchers’ finding that “the degree of fiscal space prior to the recession” is a critical factor in determining the nature and depth of recessions in Barbados. The prolonged period of insignificant economic growth is a direct consequence of the poor fiscal management of the current Government led by the Prime Minister, who presides over the Cabinet on a weekly basis. He may therefore claim not to know all the details but he certainly cannot claim not having knowledge of what comes to Cabinet.
In 2008 and beyond, the fiscal condition went into unprecedented waters as the Government was forced to borrow money to pay civil servants and print money to save embarrassment. These two things continue to happen on a scale never before witnessed in this country. The reason is simply poor fiscal management.
While children are still going to school, university education has been compromised. Buses are still running, but the access and quality are down. Families are still going to church but in fewer numbers. Supermarkets are still open but with higher prices as workers receive no salary increases in the face of more taxation. The dynamics of everyday life are still intact but there is increasing evidence of growing social decay.
Fortunately, no matter how badly an economy is managed, it will not die but rather exist at a much reduced standard of living; a condition some people believe we deserve and are willing to justify.
Dr Clyde Mascoll is an economist and Opposition Barbados Labour Party adviser on the economy. Email mascoll_clyde@hotmail.com
