The outcry from the private sector last week together with the International Monetary Fund’s (IMF) report on Barbados Monday each pointed to one thing – this country’s economy is critically ill and is in need of intensive care treatment.
All Barbadians must take this situation seriously and for once recognize that our cherished dollar’s parity with the United States greenback is under severe pressure if effective action is not taken immediately by Government to arrest the slide.
No longer can we behave as if someone will do something to help us, or some occurrence will happen to save us. If never before, each one of us must play our part to help pull this country up from the slippery slope.
I kid you not. Neither am I being melodramatic. The writing is on the wall.
This is why last week’s statement from the Barbados Private Sector Association (BPSA) was as direct as it was profound. It clearly articulated the fears of the people who, through their investments and employment, keep this economy ticking over. They sense real danger and in the interest of self-preservation spoke out.
When has anyone ever heard the private sector in Barbados tell Government in such an emphatic manner to “swiftly” cut spending and take decisive action to deal with fiscal problems before an external agency has to step in and dictate to this country what must be done?
Who can recall business people here scolding the Government on their unsustainable practice of borrowing to pay bills?
The fact is the private sector realizes that if nothing is said or done now to alert the population to Government’s actions, then everyone in this country stands to lose the social welfare privileges that most of us take for granted.
In making a case against more borrowing, the BPSA noted that the national debt was $2.5 billion in 1995; by 2007, it had moved to $5.6 billion, and in 2010 it ballooned to $8.2 billion – which works out at a debt of $30 000 for each Barbadian.
“We do not believe that widespread layoffs, whether in the public or private sector is the answer, but the Government of Barbados cannot get away from immediately taking serious and likely unpopular decisions on reforming those ineffective and wasteful areas of public spending that plague us,” the BPSA statement said.
Had such a comment come from a social commentator, like myself, or Opposition politicians, it would likely have been dismissed as alarmist, mischievous, just politicking, even unpatriotic by Government.
That we have not heard such a response demonstrates that the Government recognizes the political spin its spokesmen normally apply to these matters cannot be used to dismiss the BPSA’s pointed concerns.
And when the IMF’s damning report on the state of the economy and prospects for 2012 are added to this mix, the Government is even more corralled on the type of response it can make.
That IMF report calls for a two-year wage freeze and a limit on social spending to the “most vulnerable parts of society” given Government’s “limited fiscal space”.
More important, the fund warned that given Barbados’ fixed exchange rate regime, a tightening of our “fiscal stance” was needed to “guarantee external sustainability” and to strengthen our international reserves position in light of lower foreign reserves accumulation so far this year, and an uncertain global economic situation.
Put another way, if this country does not effectively manage its fiscal deficit, we very well may have to consider foreign exchange rationing or worse, devaluation.
This IMF report confirms the bad shape our economy is in and the need for the Government to stop pussyfooting, while the BPSA’s statement is clear evidence of the crisis of confidence that pervades Barbados.
The truth is, Barbadians from all walks of life are unsure of the direction this country is going in and are crying out for sound leadership.
Prime Minister Freundel Stuart must step up to the wicket and let the country know in no uncertain terms what his Government intends to do about this untenable situation.
Stuart needs to explain too, how in his first Independence Day message last year he could say the global recession was affecting the island since the third quarter of 2007, yet his administration pursued an economic policy of higher taxation that would have led to a deepening of the recession here and its consequential loss of revenue and confidence in the economy.
Why he did not do something about the problem then is anyone’s guess. What we do know is that it is now incumbent on him and his administration to take the hard decisions needed to save this country’s fortunes from sinking further, and threatening the quality lifestyle to which we have become accustomed.
The global economic outlook is bad and is getting worse. No one can blame Government for that. However, there are policies that this administration has pursued which have aggravated the effect of the worldwide crisis on our economy.
This is what the BPSA is saying. This is what the IMF is saying. This is what commentators, non-partisan and partisan, have been saying too.
Government can therefore no longer bury its head in the sand.
It must act now.
