THE LEADERSHIP of the Democratic Labour Party (DLP) has certainly moved away from its socialist roots of the 1970s, when a policy of price controls was being advocated. In fact, the move now includes the removal of a minimum deposit rate.
Strangely enough, the same leadership has engaged in freezing wages and salaries over the last eight years.
By no stretch of the imagination is the DLP the party that Hilary Beckles described as “. . . socialist in theory, characterised by a demand for a reduction in the degree of social inequality, democratisation of resource ownership, socialist reforms in the areas of education, public health and social security, and diversification of the economy away from the plantation-mercantile axis”.
The leadership of the DLP did not pause to consider the ramifications of its fee policy at the University of the West Indies. It hardly paused in its abandonment of universal access to health care for all Barbadians. It has built a few houses that cannot be accessed by low-income Barbadians. There is clear evidence that the social empowerment mission of the past is no longer.
Recent attempts to encourage import substitution in the areas of cement and chicken production are indicative of a political party that has lost its desire to diversify the economy away from the plantation-mercantile axis. It is remarkable that a modern-day government would encourage the importation of cement to compete against locally-produced cement that has very high local value-added. The latter simply means that most of the inputs in the production process are sourced locally, which is a compelling basis for protection.
In an environment where considerable emphasis is placed on the earning of foreign exchange, it remains a mystery why protecting local cement production is not a priority of the Government. The change in policy that was so hastily arrived at reflects the conscience, or lack thereof, of a political party that has lost all of its moorings.
A temporary shortfall of financial resources ought not to inspire an individual to abandon his/her principles. On what grounds should we be able to understand that it is okay for a government to abandon its principles, in the face of a similar shortfall? The question is more engaging when it is asked of a government that embraced the mantra that Barbados is more than an economy, it is a society.
Downhill
The evidence shows that the economy has gone downhill over the last eight years. This brings me to the turnaround, which means a U-turn. Imagine that the economy was at the top of the slope that brings us from Cave Hill to the big and confusing roundabout at Warrens. The decline represents the fall in the economy since 2008. The economy is now at the roundabout. This means that a turnaround is suggesting that the economy entered the roundabout and has U-turned to come back over the slope/hill.
Using the imagery, the Barbados economy has to reach the top of the slope to say that it has recovered to where it was eight years ago. Does it not make sense to suggest that for the economy to get over the slope, it will need some kind of push? Strangely enough, to get over the hill, it is expected that prices will rise. It is also expected that interest rates will rise. Yet, the wage rate is to remain the same. Again the workers are to be the sacrificial lambs.
Having sacrificed the most in the last eight years, the workers are expected, with the measliest increase, to further sacrifice even as the economy attempts to go over the hill. The economic recovery will take years, especially if the political leadership continues to lack vision. The fastest way to get over the hill is with an injection of confidence that inspires the workers and those who want to invest. The latter must include foreign investors to make the task less difficult.
Dollars and cents do add up, but management of money has as much to do with its allocation as it is to do with the amount. The difference between managing a household and a government is predominantly one of size, if the ability to print money is taken away from the government.
The unfortunate twist of the Government finding an alternative way to print money in the last five years, in addition to the indiscriminate use of taxation, contributed to the prolonged decline in the Barbados economy. The broader economic and social decline is however more reflective of an abandonment of its past principles.
• Dr Clyde Mascoll is an economist and Opposition Barbados Labour Party adviser on the economy. email: [email protected]