ON TUESDAY Finance Minister Chris Sinckler will deliver his Budgetary Proposals to Parliament and Barbadians, at a critical time in this country’s history.
Fifty years ago when this country became independent, and took complete control of its financial economic and political destiny our economy was a much less complex undertaking. no one should doubt the enormous challenges and tasks which this small nation has faced since then, but particularly in the past decade.
The tasks confronting the minister and his advisors have not been easy at any time. Growth has eluded us and austerity measures of one kind or other have dampened demand and probably have had a knock on impact on confidence not only at the business level, but also at the personal level.
One of the major jobs facing the minister and government at this stage therefore is to tap into the green shoots of growth that appear to be breaking through the surface of the economic soil; and to water and fertilise those shoots with appropriate policies.
Among those policies one expects to see growth-inducing strategies including most of all some effort being made to simplify the procedures for business facilitation without sacrificing due diligence, as we continue to encourage foreign businesses to establish here now that the worst aspects of the international recession appear to have passed.
This approach could yield many beneficial results because increased employment, and an inflow of foreign exchange could be the primary benefits accruing to what might be called the critical dynamics of the economy.
Already we have seen the start of the Sam Lord’s project and the promise of a restart of Four Seasons together with the imminent lift off of the Hyatt Hotel could signal a renaissance of the feel good factor in the economy which will engender renewed confidence among local and foreign entrepreneurs alike.
The Government can properly claim that these developments show that its plans are bearing fruit and that better days are to come; but even its most fervent admirers will have to admit that the deficit is still a constant challenge, especially as an uncontrolled deficit may have uncomfortable implications for our foreign reserves.
Indeed it is the matter of foreign reserves which we believe will have occupied the keen attention of the minister as he prepared his budgetary proposals since foreign reserves have declined in the face of improvements in the performance of tourism and reduced oil prices.
This situation will have been alleviated by the start of some of the foreign investment projects but Brexit and its consequences will have to be taken into account since the British market is our major source of tourism.
In addition to this, there is a school of thought which suggests that more money in the hands of consumers will enure to the benefit of the economy and some commentators have been clamouring for a return of some, if not all of the income tax allowances repealed in earlier budget .
The truth is that in the circumstances in which the country finds itself, sustained growth has to be generated, but the path to such growth is conditional on careful fine tuning of taxation levels, adequate and adequately protected foreign reserves, maintained levels of tourism and foreign direct investment.
Above all, the Minister of Finance has to bear in mind that we are more than an economy. It is an enormous challenge, at the best of times.