With each speech by Cabinet Ministers, it is becoming clearer that Government’s major strategy for the upcoming elections will be to focus on how they managed to retain jobs and maintain stability in an increasingly chaotic global economic crisis.
In the last few weeks, ministers have repeatedly been extolling the virtues of Government’s policy of not laying off workers, and they take credit for encouraging the private sector to do likewise. And their statements come with the same refrain, that is, they don’t need to apologize to anyone for keeping this country on an even keel.
The clearest indication of this strategy came over the weekend in speeches by Prime Minister Freundel Stuart and Minister of Health Donville Inniss, with the former’s best encapsulating it.
Speaking in Chalky Mount, St Andrew, Stuart said that on the death of Prime Minister David Thompson there were suggestions that his Government would implode, but it did not happen. Instead, they stood firm and have been able to carry out sound economic and social policies, which have led to stability of the country to the benefit of families and children.
“We have kept things here stable in Barbados and I don’t have to apologize for that,” the Prime Minister said, while defending his administration’s management of the economy.
“In the context of what we would have had to endure worldwide, we have managed this country well,” Stuart insisted, declaring that Barbados was doing admirably under the circumstances, especially when compared to developed countries like Spain, where unemployment is 25 per cent and one young person in every two is unemployed.
“Economically, we have passed the test in the context of what is happening globally,” he added.
Admitting he was not happy with the 11 per cent unemployment, Stuart noted that his administration was working to bring down that figure, and pointed out that “not one public sector worker” had been laid off.
While all credit should be given to the Stuart administration for maintaining social cohesion by not laying off workers, the fact is that Government has been borrowing millions of dollars each month to pay these people. That is akin to a householder borrowing money each month to pay for their food and other household bills. Such action is unsustainable and can only lead to financial ruin.
Put another way, the absence of layoffs to date in the public sector means Government becoming more indebted monthly to keep more people on the job without getting the level of productivity to justify their employment. And this is a recipe for eventual economic disaster.
That said, it is good politics!
Voters would find it a compelling argument that the Government has been looking after their welfare by keeping them in jobs. Also irresistible would be the argument that the Opposition’s criticism shows they will cut jobs if they regain power. After all, the Opposition cares more about the economy than they do about people and “Barbados is more than an economy, it is a society”.
Yes, voters would be annoyed that their purchasing power has been eroded in the last few years as costs of everything have risen without any increase in salary for public servants since 2010, and for others, only a marginal pay hike. But, at least, most people have a job and are surviving. In other countries people are unemployed and suffering.
So the Government’s strategy makes sense politically.
Unfortunately, it does not make common sense and cannot continue forever. Already Government has been warned about its burgeoning fiscal deficit, which is fuelled largely by the unwise practice of borrowing to pay salaries. It has been told by the international financial and rating agencies to stop it. So the die has been cast.
The question is, what happens after the general election, regardless of who wins? That is my concern. It should be the concern of every right-thinking Barbadian as well.
What most people would want to know is what is the way out of this fix. I’m no economist, but basic common sense tells me the way to get the economy going is to put more money back into people’s pockets. The more disposal income people have, the more they can spend on goods and services. This in turn stimulates business activity.
Government can get this process started in the upcoming Budget by easing the tax imposed on the once tax-free travel and entertainment allowances. With VAT raking in so many more dollars than anticipated, this can be done. It’s my hope that common sense prevails.
• Sanka Price is the SATURDAY SUN editor.
