THE SAYING “One man’s meat is another man’s poison” should be familiar to most Barbadians. For the purpose of our discussion today, however, we would prefer to reverse it to read, “One man’s poison is another man’s meat”.
For a number of years now one of the biggest challenges to Barbados’ developmental plans has been the price of fuel. Because we produce only a fraction of our energy needs, each year we are forced to expend hundreds of millions in foreign exchange to cover the cost of fuel importation. We have tried many alternative strategies, including the very successful development of a solar water heating industry.
Without doubt, had we not embarked on this road decades ago, our challenges would have been compounded. More recently, under the leadership of Prime Minister Freundel Stuart, the Democratic Labour Party Government has placed significant emphasis on creating a genuine alternative energy sector, with the aim of eventually eliminating the importation of fossil fuels.
Barbados’ location makes the use of wind and sun as substantial sources of green energy very possible, even if it can’t be achieved in the short term. And the fact that pioneering entities like Williams Industries and Barbados Light & Power Company are in the vanguard of these initiatives bodes well for the country.
In the interim though, there is another development that can turn out to be Barbados’ meat. It has to do with the dramatic decline in fuel prices on the world market over the past two years, and the prediction of industry forecasters that they will remain low for at least another year; and that even when they do start to rise, they will not return to the economically choking levels that existed between 2011 and mid-2014.
During that period, global economies, including our own, struggled to cope with oil prices that fluctuated between US$125 and US$100 per barrel. Today the price of a barrel of oil is US$37.
It is important that our policymakers, including Minister of Finance Chris Sinckler and his advisors, take steps to capitalise on this window of opportunity to facilitate growth in industry, particularly small businesses. It would be just short of impossible to divorce the decline or demise of many businesses from the upward surge in oil prices since the turn of the decade.
If we accept that, then it can’t be hard to conclude that with the right set of incentives, we can get some industries going again, in the process generating new employment and improving our export prospects – or at least contributing further to import substitution.
We also believe that with the right handling of the current international oil price situation, Barbados’ ability to compete with Trinidad and Tobago in the production of various goods could be enhanced. We lost a lot of ground to the twin-island republic because of its advantage of cheap energy, but the fall in international oil prices is putting much pressure on that economy and we should not waste the opportunities.
High fuel prices have poisoned our economy, causing us to lose ground to our competitors. Government needs to ensure that its impositions are not of such a nature that they prevent Barbadians from benefiting from the difference between a price of US$125 and US$37 per barrel. So far, our way of doing business has not allowed the country the full benefit. It is time to employ the full extent of our creative juices to get our economy firing on all cylinders.