ALL AH WE IS ONE: IMF politics
By Tennyson Joseph | Tue, November 05, 2013 - 12:00 AM
The recent suggestion by University of the West Indies Professor of Economics Michael Howard that Barbados should formally go to the International Monetary Fund (IMF) and its immediate rejection by leading economic spokespeople of the ruling Democratic Labour Party (DLP) has marked a new stage in the economic debate on the crisis confronting Barbados.
Coming in a week when St Lucia’s Prime Minister Dr Kenny Anthony openly declared that Caribbean governments are in self-denial, the discourse has entered an uncomfortable phase for governmental operatives.
Little wonder DLP economic spokespersons appeared “offended” by both Howard’s and Anthony’s pronouncements and, as expected, engaged in refutations confirming the “denial” of which Anthony spoke.
However, it is easily understood why the IMF suggestion by the respected Professor Howard would have been seen as a “threat” to the DLP. Caribbean voters associate the IMF with the experiences of Jamaica and Guyana in the mid-1970s and 1980s, with harsh austerity, and with government failure. Above all, it would “confirm” or formally admit that Barbados had reached a stage of economic crisis previously unacknowledged.
In addition, since the last experience of Barbados with the IMF occurred under a DLP Government, the current DLP administration will desperately avoid any association with the regime of the 1990-1994 period.
It is in such a context that Howard’s recommendation might have appeared naïve, since it was premised only on the economic considerations of cheaper terms for borrowing from the IMF and the advantage of facing the IMF earlier rather than later to avoid greater pain. Indeed, what seemed to be emerging from his analysis, and what appeared to offend the DLP, was his insinuation that, given the continuing slide in the reserves, a visit to the IMF was almost inevitable.
Despite the clarity of Howard’s rationale, politicians inhabit a world in which short-term survival is the prime consideration.
The critical question that needs to be asked, however, is whether the objective reality of Barbados does not already amount to an IMF austerity package. The harsh measures passed in the 2013 Budget were clearly meant to satisfy external agencies rather than domestic voters.
Indeed, this admission was made by retired professor Sir Frank Alleyne, who suggested that a formal IMF agreement was unnecessary since Barbados already had its own (homegrown?) austerity programme. In short, Barbados was already pursing an IMF programme, but minus the IMF money.
It was the need for urgent IMF balance of payments support which was the basis of Professor Howard’s prescription, and conversely, it was the need to avoid acknowledgement of urgent crisis, rather than an opposition to austerity, which motivated Alleyne’s denial.
All Howard was suggesting was that the unacknowledged IMF arrangement should be replaced by a formal one. Anthony’s time for facing truth will soon prove whether Howard was “panicking” too early, or merely being far more honest than his politicized colleagues could ever be.
• Tennyson Joseph is a political scientist at the University of the West Indies Cave Hill Campus, specializing in regional affairs.
- Editor's Choice
- 3 charged
- Does Ebola travel ban make sense?
- Sports unity call
- Fight against the mosquito