RIGHT OF CENTRE: Encouraging proposals
The reason there are such varied prognoses of the impact of recent Budgetary Proposals is that no one has yet developed any formula for getting things right every time.
Budgets are management tools. They are expressions of the presenter’s state of mind as he develops strategy in response to particular circumstances.
Fact-based analysis of historical movements in money markets and interest rates, commodity prices and production costs, employment levels and wages are important indicators.
If there are any lessons that can be learnt from the conditions that led to the current economic impasse, they are:
1. That the prosperity of a country depends in no small measure on its ability to create real economic value by managing its resources, especially its people, efficiently – not by wheeling and dealing in the financial markets.
2. There has been a remarkable shift in economic power from owners and managers of businesses in the real economy to the investors of money – persons who make money by trading in money.
3 .Unregulated financial markets are like two-edged swords. They allow a relatively small group of overzealous speculators to make money quickly, and that process severely challenged the banking system and shacked the confidence in money.
Two years on from the meltdown, while the banks have been restored to normalcy after receiving the required bailout funds from their governments, the productive sectors continue to struggle.
The United States and Britain, the countries that we rely on for our foreign exchange earnings, mainly through tourism, have huge debts and uncomfortably high level of unemployment.
There are no signs that their conditions will recover sufficiently to afford, any time soon, their citizens the level of discretionary income to take the long holidays that they did prior to the meltdown.
In the circumstances, Government’s role in fashioning its Budget is to ensure that its citizens have the best quality life that its resources can afford by ensuring stable access to the best and cheapest goods and services.
The Minister of Finance acted appropriately by confiding in the citizens on how he intends to deal with the rest of the world, as he strives to get the best deal we can from wherever we can.
The rhetoric today may be catchy and, consequently, appropriate during election time. However, once the election is over, citizens must face the reality of entering the supermarket, and their concern is the value of goods.
On the supply side, the proposals provided the encouragement for businesses to invest in growing the real economy.
Although Barbados is a small land space, it has 365 days of sunlight and an intelligent workforce.
There is no logical reason why investors cannot develop businesses which add value and are globally competitive.
This must be our ultimate goal.
Given the structure of our economy, there is best way to avoid or overcome the fallout from the current global recession.
Therefore, we must seize the opportunity to discipline ourselves to live within our means, while building an economy within a values system that emphasizes Barbadian talent.