Budget good place to start
Now that the Senate has debated and passed the Appropriation Bill 2013, the stage is set for the start of the new financial year of Government’s operations from April 1.
Many will be looking forward to the next moves in the ongoing battle with the economy and the effort to secure growth and the resultant jobs.
A Budget is not an absolute necessity, but the Estimates are, and while we need not have a Budget, one expects that in the context of what has been happening in the economy, that some sort of adjustments consistent with the budgetary presentation may be necessary; in which case, the shape and content of such a package would be extremely interesting.
Already, there has been an announcement that a stimulus package of $600 million will be injected into the economy and the Government expects an increase in construction jobs since most of the stimulus would be directed to construction projects.
We note too, that there is a deficit which has to be financed. In the face of the present state of the economy, perhaps further measures may be necessary to cover that gap. The particular method to be chosen by the Minister of Finance to bridge the gap between expenditure and revenue may make a Budget a functional necessity, but that will be a decision for him and his political and financial advisers, and the Prime Minister.
But the Government faces additional problems, for even as it recognizes the fact of the deficit, a stimulus package of any kind impacts adversely on the foreign reserves. So that concurrently with efforts to jump-start the economy by use of a stimulus, it must at the same time try to maintain momentum and improvement in the tourism and offshore sectors, and to capture foreign direct investment which will generate capital inflows in foreign currency.
If our assessment is right, then this country is looking at what would have to be a finely calibrated economic plan which takes into account all the better learning on economic theory and practice applicable to small open economies and geared towards the peculiar nuances of the Barbadian people, for economics is a discipline that touches the daily lives and habits of the people and policy planners forget this elementary truth at their peril.
It cannot be happy news that in the midst of these developments, our tourism has shown an eight per cent decline in the past winter season. These declines have an impact on our foreign exchange earnings and, at a more personal level, they mean loss of jobs or reduced employment, and may inhibit desperately needed growth in the local economy.
Fortunately for us, the opening of the Converse store on Broad Street may be a small indicator, but an indicator nevertheless, that some overseas investors may still be regarding our country as worthy of their investment. We certainly hope this is so because without confidence in the future of our economy, little else will matter. Confidence is the soil which produces investors and investors produce jobs.
It was therefore comforting to hear Government senators proclaiming that the economy has been stabilized, and that the way has been provided for growth led by the stimulus package.
We certainly hope that this message will be accepted by investors both at home and abroad; but in order to have this message produce the investment and growth that is required, the deficit must be dealt with, and our foreign exchange earning sectors must receive sustained attention.
We suspect that a good place to lay out the specific process may well be in a Budget presentation in which the public can be seriously enjoined in what will have to be a national effort.