Saturday, April 20, 2024

Economic restoration needs unified action (Part 1)


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WE MUST ALL pull together to restore the economy. The Barbados Private Sector Association, like other organisations, is deeply concerned about the economic situation. The status quo, in our opinion, cannot be allowed to continue and hence this appeal for a process to be started towards achieving a consensus on how we best can together meet these challenges.

We believe that local circumstances are entirely within our control and that we have the capacity to resolve the problems confronting us. We have two huge advantages that can help make this happen: first, our size – in a small country we can turn things around quickly; secondly, the vast, but largely untapped, intellectual potential of our people, both at home and abroad.

We still have not fully grasped how to facilitate the large contribution in ideas and investment that Barbadians in the diaspora, especially the younger generation, can make to Barbados. That too, must now be part of our common thrust.

It goes without saying that this is no time for partisan political thinking or advantage seeking by the private sector and the trade unions. This is a time to analyse and tackle all our difficulties objectively and collectively and to do so in that same spirit of cooperation which served us well in not dissimilar circumstances 25 years ago when we correctly rejected devaluation, and fixed our foreign exchange and deficit problems.

Let us not dispute the fact that Barbados is now facing the most prolonged socio-economic crisis since Independence. Let us believe instead that we shall be able to overcome these grave challenges once all Barbadians understand clearly the nature of our problems, commit to solving them, and that the resolution of these problems, although a demanding task and requiring everyone to make some sacrifice, is not beyond our capabilities as a country.

If we change nothing, then we shall have a situation that invites everyone to break for themselves. This is a recipe for disaster. If we do not all pitch in as we did when confronted by the economic crisis of the early 1990s, then the decline will continue and the sacrifices required for recovery will be harsher. On the other hand, if we start now in a truly united effort to pull ourselves out of this crisis, then the sacrifices required will be less harsh and our future can look rosier.

It is the fervent belief of our people which has preserved our small, resource-scarce country over fifty years of independence and made us as successful as we have been. That is what has saved us from all the storms which we have had to face. We must rely upon it again.

The problems

The range and severity of the underlying problems may be summarised as follows: a lack of confidence of investors, lenders and entrepreneurs, both foreign and domestic, in the ability of our Government to meet its commitments, especially in the longer term; the printing of money and an unsustainable fiscal deficit an imbalance in the earning and spending of foreign exchange worsened by some leakage of that foreign exchange; low levels of productivity across all sectors of the economy, including allowing hundreds of acres of arable land to lie idle, impediments to entrepreneurial activity, particularly in areas oriented towards earning foreign exchange; difficulties in doing business management in the private sector; demoralisation among civil servants having to work in an archaic environment where administrative inadequacy creates inefficiencies; costs associated with inordinate delays and processes in the judicial system; increases in both rumours of corruption, and anti-social behaviour stemming from the prevalence of illegal drugs.

There are short and long-term solutions to all of these and other problems. The short term solutions should, in our view, be initiated urgently through meaningful dialogue at the level of the full Social Partnership.

Short term solutions

We believe that the institution of the Social Partnership, including the potential of its sub committee, is underutilised.

We believe that the Social Partnership provides the means whereby Government can initiate discussion on each of the major issues besetting the economy, debate the policy options, and thus derive the benefit of making use of that facility before embarking upon any further or additional fiscal policies and infrastructural priorities.

The sharing to the greatest extent possible of all the relevant facts and figures allows for objective decisions, including a rationalisation of Government expenditure, to be made on the basis of such information.

Any policies and proposed changes once determined by Government should then be explained to the Social Partnership in sufficient clarity so that the success in implementation can be assisted at that level. In addition, the rationale of what has been decided should be made known to the public.

We advocate the establishment of a broadly constituted Oversight Committee as a subcommittee of the Social Partnership.

Its sole purposes would be to monitor the fiscal, monetary and quantitative targets set by the Government to ensure they are met and to advise on any necessary remedial action. This in itself would provide a level of accountability and transparency thereby restoring investor and public confidence in the economic recovery. Such a group has been established for that very purpose in Jamaica. It has had remarkable success there and is thus worthy of imitation as part of a new and enhanced collaborative effort towards successful implementation of decisions.

The Barbados Private Sector Association is the umbrella agency of private sector organisations in Barbados. Part 2 will be published next week.


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