Not too long ago, former Prime Minister Sir Lloyd Erskine Sandiford was wondering what went wrong that the Barbadian economy had once again deteriorated significantly.
It brought back memories of the dark days of the early 1990s when the country had to face the bullets coming out of the blazing guns of the International Monetary Fund, and forced to – inter alia – dismiss thousands of public workers and cut the remaining officers’ salary by eight per cent in an effort to save the local currency from a devaluation and restore macroeconomic equilibrium.
Yet, years later since those concerns were echoed by the former Prime Minister, those responsible for managing the economy and plotting the way forward for Barbados seem to be functioning as if they are suffering from economic amnesia.
I cannot and will never attempt to speak for anyone living and working in Barbados. But, I always wonder what Barbadians think each time they listen to a presentation on the performance of the economy by the governor of the Central Bank.
I admit that I am always left speechless following deep reflections on these presentations which attempt to paint an economic picture of the current and future state of affairs in our beautiful country.
Case in point: according to the report on the performance of the economy in the first six months of the year, growth is recorded at 1.3 per cent over the January to June period, blamed on “unexpected delays in major tourism investment projects”.
Remember, the economy failed to grow during the same period last year. When, according to the report, the weaker second quarter performance of tourism is combined with the troubling, high debt service payments on external borrowings, the stock of foreign reserves declined to $884 million, a reduction in the absolute amount by $43 million. At that level, we are told that the international reserves can support 13.6 weeks of imports of goods and services. Recall, the magic number is 12 weeks of imports!
Once more, the issue of the value of the local currency is being brought to the fore. As you should be aware, the country needs to maintain a sufficient level of international reserves in order to safeguard the current parity of US$1 to BDS$2. That “magic” number is the equivalent of 12 weeks of imports of goods and services. With the customary state of economic affairs in Barbados, I continue to wonder where our memories have gone. Why are our economic managers and planners behaving as if they are operating with a totally blank slate?
Should it not be clear by now to those in authority that the economic difficulties facing the country cannot and will not be solved by ad hoc policy interventions? When will our leaders finally admit to the people that their efforts at reconfiguring the economy to bring about desired fiscal stability and sustained economic growth and development have failed miserably? Is it not clear to them that despite all the pronouncements that fly in the face of existing data and statistical evidence that the Barbadian economy is suffering from economic amnesia?
To resolve the economic challenges facing Barbados, which from all accounts now seem insurmountable to those charged with that awesome responsibility, here is something to muse: In a July 19, 2016 piece carried in Foreign Policy on the refugee crisis facing Europe, George Soros warned: “The EU’s piecemeal solutions are coming apart. Only a surge of financial and political creativity can avoid a catastrophe.”
Email: bfrancis@uwi.edu.bb