On Tuesday the Minister of Finance will present his annual Budget to Parliament and many eager ears will be listening for whatever ease he may be able to offer the populace in the midst of this very serious recession.
It is difficult for any Minister of Finance at this time, whether in small developing countries or in the major developed economies, for all kinds of reasons, but principally because no man is an island and all the economies of this world are interconnected to some extent.
It is certainly so in our case because our tourism and international business trade, for example, depends on the health of the major metropolitan economies. The Budget therefore will have to take account of the international realities and Barbadians, though hoping for some ease, will have to recognize there is only so much that can be done.
Fiscal deficits are now a troublesome thorn in the side of most economies. Both the United States and Britain, for example, are tackling this issue
in the face of a recession that sees government revenues decreasing amidst the inevitable calls on the public purse for money to help the vulnerable groups, and for government to meet the usual expenses of running the country.
Our economy faces these problems too, but we have to tackle them without the resources of the other countries, whose natural endowments allow them to export their way out of the recession.
We have to depend on our people as our major resource and we therefore have to pull together at this time and support those initiatives that will help us out of the present situation.
Against this background, the antisocial behaviour we are witnessing in parts of the world and in our own backyard must not be allowed to overshadow and dominate the situation.
Violent attacks on businesses, business people and the police can be as destructive on the economy as the failure of a financial institution because they both affect the confidence of the public, both here and abroad.
Confidence is therefore an important ingredient in restoring the economy and whatever Mr Sinckler will try to do, by way of adjusting the fiscal climate, his primary responsibility must be maintaining confidence in our economy.
He must treat this as a matter of the first order. Experience has shown that investors, whether small or large, are disinclined to undertake business risks with their monies if they are unsure of the economy.
So far Government has been able to maintain employment and our foreign reserves are still 20 weeks of imports. Since the recession now seems to be lasting longer than at first thought, we anticipate that every effort must continue to be made to maintain these key criteria at these levels.
We are not unmindful of the fact that political considerations are part and parcel of the budgetary process, and that growth in the economy is essential but difficult, given our reliance on tourism and other services when our market sources are in serious economic difficulties.
We therefore urge the minister to be realistic in his proposals.
A runaway deficit will threaten our standard of living and revenues are not as robust as one would wish.
The Minister of Finance must therefore be as skilled in his calibration as the brain surgeon, as he seeks to avoid damage to vital organs of the economy while mending areas in need of repair.
Such an exercise requires one eye to be kept on the economics of the situation and another on the social and other realities.
Mr Sinckler’s task is not an easy one. We wish him well.
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