PEP COLUMN: Saving our Barbados from recession – 3
The Rescue Plan to save Barbados from recession begins with the re-establishment of the soundness of the finances of our Government. But once we have taken those measures we must then move with haste to deal with that part of the problem that concerns the finances and credit of the tens of thousands of ordinary citizens.
We must restore the purchasing power and the confidence of the masses of our people, so that they can once again engage in commercial activity and socially useful consumer spending at a level that will set the internal machinery of our economy humming.
One of our strategies must be to save our people from the suffocating effect of burdensome debt and oppressively high interest rates. And a second must be to clear away the encumbrances inhibiting socially useful spending.
At present, many thousands of working-class and middle-class Barbadians find themselves in a debt trap – ensnared by high and oppressive levels of bank debt, mortgage debt, automobile-based finance company debt, and credit card debt. Barbadians routinely pay an astronomical 22 per cent per annum on their credit card debt!
It is clear therefore that our Government needs to come to the rescue of the Barbadian people by ensuring that the Minister of Finance, a public official elected by the people and therefore accountable to the people, has the power to intervene and to determine maximum limits on interest rates charged by banks and other financial institutions, across the board.
Our Government also needs to exert itself to do more – much more – to save Barbadian consumers from an unnaturally high cost of living inflicted upon them by an oligopolistic elite merchant class 300 years old.
We must act now to increase the power of the currency in the hand of the consumer by reducing the overall level of prices. Government must also act now to come to the assistance of microbusinesses in the working-class sector of the economy: corner shops, minimarts, seamstresses, wayside vendors, and the list goes on.
Many of these small working-class entrepreneurs have experienced a significant decline in sales. Of course, there are many reasons for this, but a major reason that is overlooked is that tens of thousands of Barbadians have diverted their discretionary spending away from these working-class businesses towards lotto tickets, other forms of gambling and cellphones!
Literally millions of dollars that would otherwise have been spent with the community corner shop are now ploughed into gambling and cellphones by working-class Barbadians, on a weekly basis.
We therefore say: moderate cellphone use and impose an outright ban on gambling in Barbados, and permit this discretionary consumer spending to revert to more socially useful purposes.
We also recommend that financial resources be freed up by adopting Muhammad Nassar’s often repeated proposal that Government offset the delay that small business people routinely experience in receiving payment of state funds owed to them, by issuing Government-backed guarantee certificates that the small businessman can take to the bank and exchange for cash or use as security for credit.