WE MUST ADD our voice to the calls for immediate assertive action to arrest the slide in the Barbados economy.
It cannot be business as usual when key economic indicators continue to dip sharply.
At the macro level, for example, long-term private capital inflows have fallen from $1.55 billion in 2007 to $323.7 million in 2008, and to $90 million in 2009.
And at the micro level, demand for cement – a gauge of the vibrancy of the employment intensive construction sector – has been in decline since 2008 with a 20 to 21 per cent drop in 2009 and a further 20 per cent fall-off this year.
We recognise much of the slowdown in investment and building activity here in the last two years is due in part to the impact of the global financial crisis.
However, more must be done now to ensure our economy does not slip further.
It is no longer enough for Government ministers to just express their concern and say they are “monitoring” situations, yet few remedies, if any, are being prescribed to deal with the problem.
This week’s announcement of the imminent closure of the Silver Sands Resort, with 120 workers heading for the breadline, and the three-month closure of sections of the Arawak Cement plant, which will result in lay-offs and reduced work weeks for about 130 workers, are signs that the prolonged slowdown in the economy could be worsening.
We share the concerns of Charlie Skeete, a retired senior economist at the Inter-American Development Bank in Washington, and echo his call for Government to tackle this nation’s serious financial problems now.
Like Skeete, we realise that much of the reluctance by Government officials to move decisively on this matter could be out of deference to Prime Minister David Thompson’s unfortunate illness. But as Skeete warned, “Events will not wait on us. . . . Somehow or other the business of governing and decision-making has to go on.”
We believe the constant warnings about the economy from former Prime Minister Owen Arthur cannot be dismissed as just partisan rhetoric. Clearly any perspective from Arthur would be laced with his politics, but his reputation, even beyond our shores, as an astute and competent economist, makes his views relevant.
The economic challenges facing Barbados, which Skeete, Arthur and others have been listing, range from a gaping fiscal deficit, increasing debt and economic stagnation to increasing pressure on our foreign reserves.
When this situation is taken against Government’s stated intention to bail out Clico policyholders – a multi-million dollar undertaking, increasing the period for unemployment benefits from 26 weeks to 40 weeks, along with other initiatives, the public needs to know how this will further impact the economy.
Senator Darcy Boyce, Minister of State in the Prime Minister’s Office, said earlier this year that Government would stick to its previously announced medium-term fiscal and development strategy to cut the fiscal deficit over the next five years and reduce public debt.
But that plan received a somewhat frosty reception when it was unveiled last March from the then president of the Congress of Trade Unions and Staff Associations of Barbados (CTUSAB), Sir Roy Trotman, who said that “CTUSAB is worried as much by what you [Prime Minister David Thompson] have not said as we are worried by what you have said”.
In the interim, the economic slide continues. The clock is ticking.
