Last week, Minister of Finance and Economic Affairs Christopher Sinckler presented the 2012-2013 Estimates Of Revenue And Expenditure for the financial year with much delight and enthusiasm.
The main point of the presentation, to me, was the revelation that current revenue was estimated to be $2.656 billion while the projection for total expenditure was $3.645 billion. Hence, the difference between total expenditure and current revenue was $989.719 million.
I have noticed in recent times that both the Central Bank of Barbados and the Ministry of Finance now seem comfortable presenting to the country what they deem the “national deficit” by deducting current revenue from total spending (what I presume is current, plus capital expenditure).
Why is this so? Whatever the answer to that question, this practice is ridiculous and must be stopped immediately.
Traditionally, budgets are presented with a balance on the current account and an overall balance.
That is precisely the kind of information the public needs in order to be able to make a reasonable judgment of the performance of the Central Government, particularly the effectiveness of Government’s policies vis-à-vis the management of the current account.
As important as the overall balance is, the deficit on the current account is what should concern those in authority at this crucial point in the country’s economic history, partly because (i) the deficit has been growing rapidly in recent years and must be brought down and (ii) due to the connection between the deficits on the fiscal side and the external side.
Barbados has already seen the devastating effects of the latter in the early 1990s when the country was plunged into a vicious structural adjustment programme. And that sort of situation ought to be avoided at all costs.
Beyond my disappointment over the attempt to hide the true magnitude of the deficit on the current account, the debates on the Estimates have been quite fruitful, with members on both sides of the Lower House of Representatives making spirited cases in defence of their respective positions – and that indeed is quite commendable.
However, going forward, members of the Lower House have to be much more focused in their deliberations. At this critical stage, Barbadians must be presented with messages that are filled with solutions to the country’s problems to boost confidence among individuals and businesses alike.
This country desperately needs specific strategies for growing the economy, reducing the deficit on the Central Government’s current account, lowering the current account deficit on the balance of payments, reducing the national debt, restructuring the economy, fostering forward and backward linkages among the major sectors, decreasing the incidence of poverty, lowering the cost of living, and generating employment opportunities, especially for the youth.
In other words, the task of rebuilding this country is enormous. Hence, there should be little time for insignificant debates. And that is the message that should be sent to all of our political leaders now and in the near future.