ONLY HUMAN: Trumped by Sinckler
Prime Minister Thompson’s appointment of Chris Sinckler as Minister of Finance was a smart move. He’s bright, articulate, and by all accounts a good listener and a quick learner. He’s also energetic and a get-things-done person, which is precisely what the country needs now. – SUNDAY SUN columnist Peter Laurie, October 24, 2010.
CHRIS SINCKLER must be smiling from ear to ear. He pulled off a media coup over the weekend by skilfully outmanoeuvring and nullifying the opposition Barbados Labour Party’s (BLP) message on the economy.
His move demonstrated how an effective communicator can shape the news.
Last Saturday morning, the BLP’s Economic Policy Team held a Press conference calling on Government to make “a drastic change” in the way it is managing the country’s economic and financial affairs.
Former Prime Minister Owen Arthur pointed out that late last year when Government presented its Budgetary Proposals, it was on course for a deficit of almost $540 million. Such spending, he said, could not be sustained.
Since then, he said, Government sought to reduce this deficit through a series of measures which would amount to just over $150 million in a full fiscal year.
After that, though, they brought requests to Parliament for supplementary expenditure amounting to $141 million, and provided guarantees for loans in excess of $329 million, most of which are unlikely to be paid by the entities on whose behalf the guarantees have been issued. And this, he argued, adds to the extent of the financial crisis with which they will eventually have to deal.
That evening, Sinckler revealed that Government’s lead economic planners had revised figures showing the economy grew by 0.3 per cent at the end of last year and had not contracted by 0.4 per cent as stated by Central Bank Governor DeLisle Worrell last month.
And so confident are they that the improvement will continue, the Central Bank is now said to be revising its economic growth projection for the first three months of 2011, upping it from two per cent to 2.5 per cent.
Addressing the deficit directly, Sinckler said that the Accountant General, who has more up to date figures than the Central Bank for the January period, believed that when all the figures were reviewed the fiscal deficit might even be below eight per cent.
As Sinckler disclosed new information in response to what the Opposition had discussed, his response became the news of the day, and what the BLP talked about before him was relegated.
My concern here is not Sinckler’s tactics. Rather, I am more interested in the substance of the discussion. That is, how can Government’s handling of the economy negatively impact me and my loved ones? This is, I’m sure, the concern of most Barbadians.
The reality is that many people cannot perceive what a 0.3 per cent growth in the economy means in terms of prices, or if this would help them get or keep a job, or even if this would provide them with the means to hold on to their houses. These are the real issues at stake.
Based on what is reported in the news, we know there has been a major slowdown in the construction industry, with consequential job losses. Any slowdown in construction affects not only workers and their families, but all the businesses and services that would have benefited from their patronage.
Cracks too are already being seen in the mortgage market, with many borrowers seeking to restructure their loans.
There is also significant reduction in the sale of new cars and property. When the increased costs of food, utilities and fuel are added to this, we can see that life is getting tougher.
In terms of Government’s handling of the economy, if we look at the reversals of policies implemented in the three months since its November 2010 Budget it is troubling.
They have recanted on how many years they will pay for students studying for a first degree at the University of the West Indies; VAT on hotel rooms; and now are looking at reviewing the tax on allowances as it is having a significant impact on public officers’ execution of their duties.
These reversals, or hints of them, do not build confidence as it seems policy implications are not thoroughly examined.
Then there is Government’s obligations, such as its commitment to CLICO policyholders; little improvement in the economies of our international trading partners, along with the high probability of increased fuel prices given the tension in the Middle East.
Given all of this, and others not mentioned, I cannot share Sinckler’s optimism. I see even tougher times ahead, but I hope that I am wrong.
That said, I must commend Sinckler for being the most visible and proactive of Government’s ministers in articulating a way forward for the economy and the country.
That he continues to do this makes the silence of Prime Minister Freundel Stuart on such critical matters even louder.
Consequently, people in some quarters are suggesting that though Stuart may be the de facto leader, Sinckler is the one who gets things done – hence the late Prime Minister David Thompson’s confidence in him.