Tuesday, April 16, 2024

NOT ALL BLACK AND WHITE: Dems embrace Arthur, privatisation champion

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FORMER PRIME MINISTER and Minister of Finance Owen Arthur’s agreement to serve as head of the DLP government’s Economic Advisory Council has raised my curiosity.

It may be ironic to contemplate that a government in full retreat against the economic devastation being inflicted by its own policies of printing money and maintaining its financial subsidies and transfers to failed statutory corporations should now look for guidance to the former prime minister, whose own policies it blamed for the mess it said it inherited.

My interest in what Arthur might propose to the admiral and his first mate in an effort to stop their ship of state from becoming a submarine of state led me to the revered economist’s speech just last May at the Barbados Chamber of Commerce, in which he offered a few main ideas.

One of these we can dispense with immediately, and that is telling the government to stop printing money.

Arthur said the now former Central Bank governor had been printing money to accommodate the fiscal deficits of the Government he had himself “documented the disaster which ensues when countries resort to the printing of money to finance unsustainable fiscal deficits”.

But I would be surprised if anyone thinks that the government is going to stop printing money at this point, so it seems to me that if Arthur is taking that suggestion with him, he might as well resign before his first meeting.

With that off the table, Arthur will be consigned to pushing his two other main suggestions that he shared with the chamber last May, the first being, to reschedule the public debt in order to give the country more fiscal room to restructure its economy.

The second, spread over or split into a few separate points, pointed directly to privatisation.

He talked about the Nordic Model, which, he noted, offers its citizens a very strong social safety net, but to pay for it requires a “willingness of the countries concerned to put in place some of the most liberalised and efficient business systems…to generate the income which is to be distributed”.

And how does it work? Well, according to Investopedia, “The model is underpinned by a capitalist economy that encourages creative destruction. While the laws make it is easy for companies to shed workers and implement transformative business models, employees are supported by generous social welfare programmes.”

Arthur firmly embraced his commitment to privatisation, saying that “the successful carrying out of a fiscal consolidation programme will require the recourse to new forms of public/private sector partnerships” to “enable the private sector to expand its activities into spheres of activity historically deemed to be the preserve for the involvement of the state.”

Remember, the DLP’s famous election toilet bowl ad, with all those statutory corporations swirling around in a BLP-created vortex as they headed down the drain of privatisation?

Well, it seems that the person the Dems said would be the champion of that will now be their chief economic adviser.

 

Patrick Hoyos is a journalist and publisher specialising in business.
Email pathoyos@gmail.com

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