It now seems pellucidly clear that the economy will continue to be a major topic of political interest for the foreseeable future. Two recent news items made sure of that.
In the first place, the speech by Leader of the Opposition Owen Arthur at the Barbados Labour Party’s annual conference made it clear that the Opposition had placed it at the very top of its agenda, and in the House of Assembly on Tuesday the Leader of the House announced that next Monday would be Budget Day.
There can be no gainsaying that the state of the local economy requires urgent attention, and that the events of the past six months may have worked against the earlier introduction of the Budget. While that is perhaps a serious topic for another forum, the immediate question facing the country is the need to reduce the current deficit, as the gap between current revenue and current expenditure has widened to the point where it is now some nine per cent of GDP or of the order of close to $500 million.
That the gap has to be closed is a point recognised by knowledgeable people who speak to these issues, and it is a point of view which commends itself to every housewife managing the family budget. She knows that the only way she can “spend” more money than she “has”, is if she gets some credit from the local store or borrows from her neighbour.
Such a course of action is unsustainable, and if it continues from month to month, the housewife will soon find that credit is not available to her since her credit rating will fall.
That has been our fate of late, and the recent downgrade by Standard & Poor’s brings us face to face with the dilemma of our mythical housewife. The stark reality of her financial position is now ours. We have either to raise revenue or reduce expenditure or to do both!
Of course the philosophical position of the Government may have an influence on any measures that are decided on. The necessity to build a society is an important objective whenever and wherever such an approach is adopted, because the vulnerable sectors in any society must be provided for by the reassuring arm of the public purse, and on occasions the strictly economic considerations in the national budget must take second spot.
On this occasion, in a sense, justice must be tempered with mercy, and the desire to build the society must be tempered by the reality that strictly economic principles should have the greater priority at this time.
We have no doubt that any Minister of Finance in our country would be aware of the pockets of poverty and deprivation in our country and would wish to so engineer his fiscal regime to cater to the alleviation of such vulnerability problems; but the resolution of the large majority of social problems call quite often for recurring expenditure, and when there is a need to close the financial gap, the horns of the dilemma become clear.
Any country in such a situation, needs to have its best minds contending by sound argument for the opinions and ideas they think may best resolve national problems. Closing the gap between expenditure and revenue in order to bring the economy back into manageable balance will not be easy, and painful and uncomfortable decisions may have to be taken.
The Budget presentation must therefore not be the end of the discussion even though the Government’s plans may by then have been written in ink. Rather, it should signal the start of continuous public debate about our economy, so that public opinion can be mobilised in an “all hands on deck effort” to pull this economy back into acceptable shape. After all it is our economy.
