The economic medicine is bitter, but it has been a necessary part of the measures required to help this country recover from the financial morass into which it has fallen.
Based on the projections outlined by Minister of Finance Chris Sinckler, some results are being achieved – as long as the prescriptions are strictly followed.
Monday’s Press conference by Sinckler, following last week’s Central Bank quarterly report, was a welcome occurrence in that it dealt with a number of fiscal and economic policy matters which went beyond the normal monetary issues – to which the Central Bank governor limited himself – when he opened himself to questions.
The objective of protecting the exchange rate is being achieved and the continued pursuit of a 50 per cent reduction in the fiscal deficit is good news because a return to economic growth is paramount. However, this must not be done by inflicting further pain, either by way of increased taxes or a steep reduction in services.
Sinckler, and indeed the wider Government, will have to be innovative. There must be a greater and faster push in the use of renewable energy by Government agencies and departments and also enhanced cost containment initiatives. The efficient collection of all taxes, levies and National Insurance Scheme payments will be critical. Government must also try to settle its debts in a timely manner.
The reform of statutory corporations and state-owned companies must be implemented more quickly while the privatisation of some must be undertaken. The Transport Board is a classic example of an area in which Government should not make any new purchases but rather become an effective regulator.
Given what Barbados has encountered over the past eight years, informal employment is now widespread, with little improvement in job quality for many who are stuck in that class of the “working poor”. This, in turn, has led to depressed incomes for a number of households and constrained consumption growth, all impacting negatively on economic growth.
It makes little sense to still try to compare what is happening internationally with Barbados’ situation after this prolonged period of no economic growth. There is clear frustration as citizens worry about their well-being.
Whatever measures are used to deal with the island’s fiscal problems, the Freundel Stuart Government must still ensure it offers incentives for companies to expand and create jobs, both of which lead to increased demand.
The painful adjustment Barbados is undergoing to fix the fallout from years of unsound economic policies must not be in vain. We must not borrow and accumulate debt which is difficult to repay or pay excessive interest to keep us in a debt trap.
Austerity measures are nothing to relish as many people are hurt. Mr Sinckler, as Minister of Finance you must provide responsible stewardship. We need to have a balanced budget and to live within our means.
