THERE CAN BE LITTLE DOUBT that the major talking point this week has been the state of the Barbadian economy.

The debate sharpened around the comment, last weekend, by Prime Minister Thompson that his Government would not be increasing any spending in the new financial year. This forthright declaration seems to have been seized upon by critics of the Government, probably because an identical statement was made in the early 1990s; but the key question is: what can be done otherwise than to hold strain on spending, given the current situation?

It is true that property taxes have yielded an increase of $12 million, but against this is the decline in tourism by 11 per cent, a similar level of decline in manufacturing, with construction and mining sectors headed for a standstill and, in addition, unemployment has risen to 9.9 per cent.

Can one reasonably expect the Government at this time to get involved in a stimulus package in the face of declining revenues from VAT receipts and other sources of revenue, lowered foreign reserves and the reported decline in other spheres of economic activity?

Indeed, this week Sir Courtney Blackman, a former Governor of the Barbados Central Bank, called for restraint in Government spending at what has been described as a time of considerable distress. We consider this to be wise counsel in the circumstances, and we support the former governor's sentiments and the administration's apparent acceptance of what must have been similar advice from its technocrats and other advisers.

The debate has been further propelled by the action of Standard & Poor's in downgrading of the economic outlook for this country to negative. The rating agency attributed the adjustment to deteriorating finances, and went on to state that the timeliness and magnitude of the island's fiscal consolidation is uncertain because of a worse than anticipated economic recession.

They also warned of the possibility of a downgrade of the credit rating if authorities fail to consolidate the general Government fiscal deficit, estimated at 7.1 per cent in this year, and if they fail to curb the rising debt.

Clearly, the informed opinion is that there must be some curb on expenditure, and the clear implication of another of Sir Courtney's comments is that restraint on expenditure might have been better started even during the last administration, since he opines that "neither" Prime Ministers Arthur nor Thompson showed "restraint" during the past five years.

We leave it to the competing political interests to debate the correctness, and timing, of the remedial measures and whether the policies of the present administration outlined in its first two Budgets might have aggravated an already bad situation; or indeed whether the borrowings of the Arthur administration are partly the cause of our present agonies. That is rightly their province.

For our part, we recognise the tightrope along which the Government must construct its policies. It must not abdicate its right to run the economy from Bridgetown, as Sir Courtney urged it not to do. Yet, without sacrificing the interests of its vulnerable groups, it must seek to avoid a downgrade of our credit rating.

This is a tall order, but whatever compromises of political economy are eventually fashioned by our Cabinet, every Barbadian owes a duty to this country to assist the national effort to conserve the outflow of foreign exchange and to increase productivity. The economy is not in dire straits, but all hands must be on deck.