GREECE MAY BE far away from Barbados, but economic developments in Athens must be of more than a passing interest to us. The financial turmoil on that country’s doorsteps could harm the international economy as happened with the contagious meltdown seven years ago in United States. Barbados has not yet recovered from that economic crisis.
There is a clear correlation between Greece and Barbados in that they both have huge national debt problems.
Greece has a debt of about US$355 billion and despite years of austere measures, the pain and suffering for its citizens continue. Little wonder the majority voted on Sunday against additional austerity measures in exchange for critical financial help. A Greek default would impact lending to emerging markets while rates for borrowing on the international capital markets would most likely rise. Clearly, this would likely result in additional headaches for Barbados down the road.
Understandably, for many Barbadians encountering hardships and economic stress as a result of our own financial challenges, what is happening in Europe may be of little interest or concern. But the reality is that Barbados’ debt burden is real. It is an albatross and no Barbadian can bury his head in the sand and wish it away.
This country can hardly expect debt forgiveness and the Freundel Stuart administration does not seem keen on a restructuring programme. Yet, while there is a home-grown austerity plan in place, there are other measures which must also be undertaken to steer us from a fiscal cliff.
The expansion and diversification of the trade and investment portfolio are vital if we are to have a buffer against future international economic shocks. We have to extend exports into new markets, reinvigorate agriculture and ensure tourism becomes a full-fledged, year-round product. We must actively promote the alternate energy sector and truly support the private sector as the engine for growth, while productivity must be enhanced. These are all necessary to give the economy a buffer against possible shocks whether from the eurozone or elsewhere.
The reform of the public sector, with which governments have been so loath to deal, must continue since this is also fundamental to the debt reduction issue.
To face another international financial meltdown while the economy remains undiversified is something for which we are not prepared. This country cannot afford an increase in either households or businesses going bankrupt.
This brings us back to the industrial unrest which hovers over the island. It is not a time for brinkmanship on the part of anyone. Rather, there must be clear and visionary leadership working for the benefit of all and not the interests of a few. We must not wish to go the way of Greece.
