In his article last May 5 entitled Healing The Economy, Professor Michael Howard admits to “widespread disagreement” among economists on the question of stimulus or austerity as a corrective to current economic woes, in both industrialized and small, open economies.
There are those who would claim some easy path to renewed growth, promising what Robert J. Samuelson calls “phantom solutions”, as if it were possible to “outlaw economic insecurity”.
Howard agrees with Sir Courtney Blackman that in the present circumstances locally and globally, mere survival might be the best option. He suggests that an economy in recession is not unlike an organism experiencing “serious” illness.
The question is, how serious? Chronically, gravely or terminally ill?
At one point the Government doctors were saying that the patient was “stable”. More recently, they seem to be suggesting that given the evident slowness in recovery, there was a need for some change in the prescribed medicine. Opposition doctors have long said the condition was acute, but the patient was not under their care. Since then, some onlookers have opined that the patient is not looking well at all. There is now a real fear of having to go to the International Medical Facility, known for massive reconstructive surgery and painful amputations.
Dr Howard is clear that the vital economic signs give reason for worry. He listed them as
(1) An inelastic tax system;
(2) Large sums of money owed by Government to the Cave Hill campus of the University of the West Indies and other entities;
(3) The CLICO fiasco;
(4) Poorly performing productive sectors;
(5) Huge fiscal deficits;
(6) Low levels of foreign investment;
(7) The high costs of doing business;
(8) High oil and commodity prices.
He is adamant that given the latter signs, the prime need is to first stabilize the patient, restoring mobility and sustainability. To his credit, the doctor has been consistent in his contention that the last thing needed in the case was any dosage of adrenaline, large or small, by way of a macro-economic stimulus.
Dr Howard has however stopped short of saying specifically how he would restore the vital signs.
How exactly would he reform the tax system?
In reducing the deficit, would he reduce and reform an oversized Civil Service which in 2011 stood at some 28 000 people?
What specifically would he do to attract foreign investment and reduce the cost of doing business in Barbados? What, if anything, would he privatize? Local economists have for the most part been long on rhetoric and short on specifics.
But to extend Professor Howard’s analogy, what if Barbados’ current economic ailment reflects not just an infection by a global virus, but a chronic non-communicable disease in a genetically weak organism?
What if the sickness results from poor lifestyle choices by a body politic that was never as strong as it pretended to be and while so pretending, lived with reckless abandon? Perhaps, as Professor Stan Reid once suggested, borrowing to enjoy a lifestyle the country had not earned.
The challenge before us may be more than healing the economy; it may be the more complex question of healing Barbados in its entirety.
In his book Boomerang, journalist Michael Lewis psychoanalyzed four countries hard hit by the financial crisis – Iceland, Ireland, Greece and Germany, pointing to fault lines in their cultures that got them into danger. In Iceland, Lewis detected a lack of sophistication among the country’s financial elites. Greece’s failing was its innate corruption in a country where cheating on your taxes is a national trait. One wonders what he would have written about Barbados.
Here are some inconvenient truths.
(1) Barbadians have an exalted notion of their collective intelligence based on an education system that produced some bright men and women but has been qualitatively in decline for some time.
(2) Instead of solving problems, Barbadians talk them to death, in workshops, seminars, symposia and summits. Little actually gets implemented. Barbadians exhibit a declining work ethic, plagued by absenteeism, confusing service with servility – which is disastrous in a tourism-oriented service economy.
(3) Barbados is plagued by the corrosive politics of clientelism. Citizens expect “Government” to provide their needs and Governments, eyes always on the election cycle, keep promising to deliver.
Critics on the ideological left used to say that political leaders in the post-colonial Caribbean were running these islands like they were service stations.
What we may well need is a call to a sense of higher purpose, a vision and someone to articulate that broader, higher vision.
• Ralph Jemmott is a retired educator and social commentator.
