EDITORIAL: Rebuilding economic confidence
It would appear from all reports that the international recession is continuing to make its presence felt in our country even if there are some positive signs of incipient recovery elsewhere, especially in those larger countries from which we draw our visitors.
News reports last week on the construction industry showed there had been a major slowdown in that sector with consequential job losses and adverse effects on the economy. The news is that the once booming sector had gone soft and several of the players in that industry, including some of the major ones, were reporting having a difficult time maintaining staff in the face of fewer projects.
Not so long ago this island was experiencing the kind of construction boom that saw us importing artisans from our neighbouring islands, with St Vincent and Guyana being two of the sources of supply, but alas this is not now the case, and even larger entities such as C. O. Williams Construction have had to take proactive measures in an effort not to lose any of their workers.
Mike Williams, public relations consultants for the C. O. Williams Group, reported that the company had entered into agreement with the workers where they are rotated depending on demand. He pointed out the biggest project that company was now undertaking was the Warrens Roundabout but he described that as only a drop in the bucket. He ended his comment by outlining the stark reality facing the industry, and his company in particular. “Most of our trucks are parked in the yard. Government work is not there. The Government is trying, but they just do not have the money. We hope Government can get some more work going soon, but the recession is worldwide.”
This picture highlights the dilemma which the economy and the Government are facing because “money makes the mare fly” and unless there is some sustained improvement in the economy, it will be difficult to see where the pickup in the construction industry will begin.
It is true as many have argued that the construction industry calls for major foreign inputs and that it is therefore a consumer, and not an earner, of our precious foreign reserves.
But that is only a small part of the story because construction is a major generator of employment. Notwithstanding technological advances, it is still a labour-intensive industry and the economic spin-offs from so many bulging pay packets coming out of the industry on Friday afternoons fuel a considerable degree of economic activity all around the island.
The slowdown is reflected in decreasing sales, smaller profits and in some cases complete loss of custom for those who depend on custom from artisans and their families. Indeed, in related news we learnt too that the recession was weighing on the local mortgage market, with many borrowers seeking more flexible ways to handle their debt obligations in what may be termed personal debt restructuring.
To the extent that the international recession is a contributing factor, alleviation of the international turmoil will be to our benefit. Yet we urge the Government in the meantime to be as realistically transparent as it can be for the public.
We cannot expect the people to pull their weight unless they know exactly what is happening, and they need to be confident in what their Government is doing to turn the economy around.
The Government has laid out a medium-term development strategy, but in addition to containing the growth of debt, there needs to be some growth in the economy so that we can faster resolve some of our economic problems, even if what we do will be painful.
Barbadians can pull themselves and their country up; but they need to know the score, and if it means a Herculean sacrifice, then they must be told. It is one of the quickest ways to rebuild economic confidence.