THE THING THAT BARBADOS’ current circumstances bring most into perspective is the power of the state versus the power of the people and the relationship between the two. It is clear that as it stands now, the state is capable of letting the people know what it wants them to know.
The time for over-analysing economic data has passed. Truth be told, such data does not give a full assessment of the plight of the poor and working poor. It provides for a contest over truth and partial truth among contending voices. The ones with greater access to the media may prevail.
In the absence of equal access to the media, especially to the visual one like television, believability is the major factor for levelling the playing field. And there is a belief in this country that once you are associated with a political party, that the believability factor diminishes. It was therefore important that the voice of a technocrat or an adviser did not become the voice of the ruling party on economic affairs.
Enough time has elapsed to show that neither an adviser’s voice is more truthful nor a perceived politician’s voice is less truthful. The battle for believability was and still is an essential part of the struggle to educate Barbadians on the true state of the economy.
A major difficulty in the struggle relates to the fact that those prosecuting the case for economic growth are the ones providing the facts. This remains an issue that has to be addressed. Those who forecast the rate of growth in this economy should not be ultimately responsible for the final figure.
No figures are required to show the level of social and economic decay in this country; it can be seen with the naked eye. The state of Barbadians’ disposable income, wealth, bank accounts and standard of living does not require any sophisticated measurement.
Barbadian private enterprise and public belief have been bruised to such an extent that some people are asking: why has the Barbados economy not collapsed as yet? But economies do not collapse and die, they merely exist at a lower level of subsistence. If they died, then Zimbabwe would not have an economy. On the other hand, institutions collapse and die.
From a pure political economy perspective, perhaps the best example of the power of the state versus the power of the people may be seen in the annual exercise of preparing and debating the Estimates. The minister of finance is responsible for presenting the details of proposed expenditure for the coming fiscal year to the House of Assembly. It is instructive to note that the legislation says to the House of Assembly rather than to the people of Barbados.
The process of preparing and presenting the Estimates should entail an understanding of the true state of the economy. The proposed Government spending ought to be constrained by the Government’s ability to raise revenue and to access financing from domestic and possibly external sources. The power of the people in this process is limited if not non-existent.
On the other hand, there is provision in the process for the Government to borrow from the Central Bank. This comes in the form of the size of an overdraft facility at the bank that has to be approved by Parliament. The law says that the amount should not exceed ten per cent of Government’s expected revenue in the coming fiscal year. It may be argued that the process involves the people via their parliamentarians.
Somehow, the state has abused a second source of borrowing from the Central Bank that does not involve the Parliament and by extension the people. The borrowing comes in the form of the Central Bank holding Government debt. Here is the abuse. In 2008, the first full year of the current administration, the Central Bank of Barbados held no Government debt. At the end of September 2015, it is holding just over $1 billion in Government debt. In Jamaica, such holding of debt by the Bank of Jamaica has to be approved by parliament.
It makes a mockery of our people’s democracy when the state is able to go through the backdoor and print billions of dollars without seeking the permission of the people, even if indirectly through the House of Assembly. The question is, why Jamaica, a country that is not deemed to be as prudently managed as Barbados, demands parliamentary approval for such a critical part of its fiscal affairs?
• Dr Clyde Mascoll is an economist and Opposition Barbados Labour Party adviser on the economy. Email: clyde_mascoll@hotmail.com.
