THERE IS A unified view across Barbados that there should be no devaluation of the island’s currency.
The parity with the United States dollar is seen as sacrosanct. The hardships brought on by devaluation for the majority are to be avoided, based on the experiences of neighbouring states.
The present level of nervousness about the Barbados dollar is therefore understandable, given the pressure it is under.
The public hears the politicians, be it Prime Minister Freundel Stuart, Minister of Finance Chris Sinckler or Opposition Barbados Labour Party senator Dr Jerome Walcott, who all echo the refrain of opposition to devaluation. The public also hears Central Bank Governor Dr DeLisle Worrell, who assures that the currency is safe at this time.
But despite these assurances, there is a feeling of uncertainty and even fear amongst many Barbadians. There is little trust in politicians, and the Central Bank has not been very inspiring.
The stark fact evident to most people is that this island’s economy is in a very precarious state and this situation can no longer be blamed on what has been happening across the world. Our economic circumstances are, for the most part, domestically driven.
The need for debt reduction and fiscal sustainability is our priority. It can no longer be concealed in glib comments and political blabber while the country’s national debt continues to rise as a share of GDP.
The issue ceases to be a politically partisan one, since whether it is this administration or whoever forms the next, they will have to take decisive action to avert the fiscal crisis facing us and threatening to undermine the entire society. Not taking action is no longer an option.
We have witnessed the consistent downgrade of the economy by various rating agencies; we have seen the difficulty Government faces in meeting it wages bill; there has been a reduction in private capital and the accepted view is that there has also been lower productivity. There is lethargy across the island in relation to getting things done, whether they are simple or major.
We must recognise and accept Barbados has a revenue problem – and an even bigger spending one. Taxation is at a record level, but spending by the state is still much greater than income.
Yes, there must be responsible spending cuts so as not to cause social dislocation, even as we must review and revamp the social welfare programmes on which the country has been weaned for the last half-century. But the dithering cannot continue.
Fortunately, there are solutions which ought not to cause contentious politically partisan or intellectual debate. But it will take guts and determination, and the solutions are with those occupying space in Bay Street, who must not ignore the magnitude of the problem. Simply stated, we must act now before it’s too late.
