NO ONE CAN DENY that Barbados faces serious fiscal problems. This is even with the International Monetary Fund’s latest report indicating that the economy may have turned a corner. The big challenge is that the country must bring its spending more in line with its revenues.
The economic recession has strangled the national budget, and the search for financial salvation has been a long one. One suggestion is that Government look at privatising some state-owned agencies. Government itself has identified a number of them and established a special task force to conduct a review.
So the debate should not be sidetracked by either the impractical or unrealistic suggestions of getting rid of agencies willy-nilly. And it ought to be realised that payment for services, whether provided by highly inefficient Government-owned businesses or the private sector, will have to be met, either by way of taxation or through direct subsidies.
Resurgence of the debate, with inputs ranging from Minister of Finance Chris Sinckler and one of his predecessors, Owen Arthur, and a range of voices from the private sector and academia, is a healthy development. It is important to hear these viewpoints, not in an acrimonious setting but a productive environment where the best ideas can be captured, considered and eventually implemented.
Mr Sinckler should clearly indicate those state-owned agencies that are good contenders for sale or partial divestment. His administration must also speak to the issue of the efficiency of central Government.
We need to have well conceived arrangements, effective contract oversight and a method of privatisation which does not drive Government deeper into debt, erode accountability and blur transparency. The due diligence necessary to ensure that we choose the best equipped buyers is also necessary. Clearly there will be need for Government to have a central entity to manage and oversee the privatisation initiative, from project scrutiny to outlining the cost-benefit analysis.
But we should not hold any state enterprises as sacred cows as they must all be closely examined in terms of their efficiency and governance. We understand that pushback is expected from some quarters and statutory obligations must be adhered to in considering a break from the status quo.
So the argument that some of these state-owned agencies must be made financially viable before they can be sold is nothing but a diversionary tactic. The reality is that the balance sheets of several entities are stretched and are putting pressure on Government’s ability to reduce its deficit. This is turn puts the entire country at risk.
As Barbados approaches a national election in less than two years, politics must not take precedence over financial common sense. Tough and unpopular decisions have to be made. The last thing Barbadians can afford at this stage is a mirage.
