I have been trying to understand why Barbados is in its current state not simply to apportion blame, but moreso to appreciate the reasoning. This country has a proud history based on its ability to reason, which is “the intellectual faculty by which conclusions are drawn from premises”. This dictionary definition is heavy so let us break it down.
An intellectual faculty is the ability to reason, know and think. It was known since the latter half of 2007 that the world economy led by the United States was going into recession in 2008. It did, and the recession deepened in 2009. By 2010, the world economy started to recover, albeit slowly, with some acceleration over the last year and a half.
During this period, several economies, particularly in the developing world, have done well, including many on the African continent which are positioned to do very well over the next decade. While economies in Latin American and the Caribbean have been growing and are expected to grow this year, only Barbados is forecast not to.
This is a cause for concern for all. From as early as the 1930s, the most famous economist, John Maynard Keynes, suggested that in a recession, the government should stimulate the economy by increasing spending. This has been practised successfully by governments ever since then.
For those who have the ability to think, the spending has always been interpreted to mean spending on investment projects from which growth can be resuscitated. It is impossible to think that the current administration did not know this. So the question is, why was the practice ignored in the post-2008 period?
The answer to this question is the key to understanding Barbados’ current economic condition, but it still does not say why the thinking of this Government was so different to previous governments. Thus there is only one conclusion that can be drawn from the Government’s behaviour, which was beautifully summed up in Prime Minister Freundel Stuart’s recent remarks of ignoring critics and nuisances.
There is a good old Barbadian saying that “Education ain’t common sense”. In essence, education is predominantly knowledge stored from institutional sources, whereas common sense is associated with practical education.
The latter has a way of being associated with reasoning and thinking while in some sense the former is more associated with knowing, with the other two elements being relegated.
The country is now paying dearly for the Government’s ability to ignore thought and reason, while believing that it knows. Unfortunately, Barbados now has to do whatever it takes to avoid the ultimate price of the Government’s ignorance. Not surprisingly, there are some who want to equally ignore the genesis of the thinking that has led to our darkest hour.
While politicians are apparently forgiven for their ignorance, the same ought not to be true for trained professionals when it comes to the application of their knowledge.
In this regard, the doings of the Government had to be tolerated if not approved over the last four years.
There was indiscipline in relation to fiscal behaviour before in this country but it was never of a magnitude to require that checks and balances had to be put in place to prevent a recurrence of the fiscal madness witnessed since 2009.
No government should be allowed to print money indefinitely to pay for recurring government expenditure.
This is a recipe for economic disaster that has to be stopped now. The only way is to legislate fiscal rules that govern the annual Estimates of Revenue and Expenditure and the financing of the resultant fiscal deficits.
It is no longer possible to give discretion to any government in the hope that it does what is right.
Most times, a government does what is in its self-interest. It may be in a government’s self-interest to print money but it is not in the country’s economic interest to allow the printing to be unlimited.
Therefore, the question is, who will guard the guard?
The premise that printing money to pay public sector workers is a good thing is true only in political terms. Therefore, the politicians have to be protected from pursuing what is prudent for them at a point in time but not the country as a whole over time.
I still cannot conclude by saying that I understand the Government’s behaviour, though I do agree that “education ain’t common sense”.
Clyde Mascoll is an economist and Opposition Barbados Labour Party adviser on the economy. Email [email protected].
