Amid the crosstalk and the sharp-tongued assertions flying across the political divide, one thing seems clear, and that is that the economy of this country is not well.
We can all accept what the immediate problem is. Although we have enough reserves to satisfy the international benchmark, our reserves fell by some $300 million earlier this year. And we have to guard against a higher deficit.
Cutting back on our deficit is therefore a major requirement, since no one, not even a country can exist on an ever-increasing deficit without encountering the most dangerous consequences of a mix of bad economics, inconvenient politics and searing hardships bearing on all, but mostly on the poor and vulnerable.
By common consent, growing the economy is the indicated medicine prescribed for the ailing national condition. Such growth may now have to be supported by immediate cuts in expenditure and a renewed increase in foreign currency earnings from our visible exports like sugar and our invisible exports like tourism and financial services.
Against this background the latest news from the International Monetary Fund that we are likely to experience negative growth this year and the next; is cause for considerable concern, especially when the economies of all the other countries in our hemisphere will enjoy growth in the relevant period.
We have to accept that reports of the IMF and of the rating agencies are facts of life for any country developing its people partly through the judicious raising of loans. We may not like what we hear, but the banks and trust companies and other institutional investors very often base their decisions to lend on the opinions expressed in such reports.
It cannot therefore be business as usual when in quick order the IMF reports on our “no growth” prospects and then we are forced to withdraw a bond offer to borrow $500 million on the international market. And our bonds are of junk classification.
These events send the wrong economic signals to the market and we are forced to ask what has been happening in those other hemispheric countries that they may all experience growth while we cannot.
The economies of no two countries may be identical but the responses to recessions may differ according to the policy views of their ministers of finance and their cabinet colleagues, persuaded no doubt by the minister that his policies are the right mix for restoring equilibrium to the economy.
Now, the news that Mr Gordon “Butch” Stewart is investing in our country is a positive signal but that alone will not restore confidence in our economic affairs in the absence of corrective action to restore economic balance in which our deficit is reduced employment maintained and export oriented and foreign exchange earning companies have a platform from which to successfully grow their companies to the national benefit.
Growth will not happen in the face of uncertainty, whether that uncertainty relates to policy per se or policy implementation. Just now we are not punching above our weight, although we have traditionally had the ability to do so and we were doing just that when that statement was made.
Rather, the country is not well, and must be restored to health.
The stakes are high and the potential for crippling damage to our national well-being is real. The economy is in intensive care and we must act!
