In the face of dire economic circumstances, impressions are not more important than facts. Impressions are mostly wrapped in one’s own opinions but it is impossible to have your own facts.
The time is upon us for all to appreciate that the perceived criticisms of the past are now the reality of today’s local economy.
Things have reached the point where the most partisan among us must take stock, if not our country’s future will be compromised by the failure to act when it mattered most. The fact that the Barbados economy is the only one in the Caribbean and Latin America that is not expected to grow this year and again in 2014 is a major cause for concern. More importantly, it tells us that the economic crisis is not all externally driven; rather domestic policies are more critical and in need of a review.
In the circumstances, the most important person is the Minister of Finance, who lacks the capacity to absorb criticism and is therefore least likely to succeed in the current environment. No one individual has all the answers but the first requirement is for the minister to truly accept his own words that “consumers and investors do not have confidence in the economy”.
Having said that, the first opportunity that comes, the same minister tries to give the impression that all has been reversed by some entity expressing an interest in running two existing hotel properties.
In March 2010, the Government of Barbados published a Medium Term Fiscal Strategy, which was revised in November 2010, that identified the following objectives: maintain macroeconomic stability; ensure strong growth through increased efficiency, productivity and competiveness over the medium term; reduce the fiscal deficit and hence provide a stable fiscal framework that will enable the Government to better serve the national goals and objective of its Medium Term Development Strategy; decrease the level of debt and improve the country’s credit ratings leading to lowered debt service costs and guarantee that domestic and external confidence in the ability of the Government to manage its resources in an efficient and balanced manner, is maintained.
On each and every objective, the Government and the Minister of Finance have failed miserably. However, the latter repeatedly assured the nation up to March 2013 that the fiscal strategy was “on track” and furthermore, that the economy was stable. These assurances were also coming from the governor of the Central Bank of Barbados with the reinforcement that the country’s foreign exchange reserves were adequate.
It is now public knowledge that there was a dramatic loss of foreign reserves since late April with some acceleration in the immediate aftermath of the August Budget, in which the Minister of Finance uttered the unfortunate words about the loss of confidence in the economy by consumers and investors.
Typically, the loss of foreign exchange reserves is strongest in October, when businesses are preparing for the Christmas season. There is no good reason why this trend should not continue in 2013. Therefore the time has come to make the facts available and to leave the impressions in the boardrooms. The call for more timely information is to help restore confidence rather than producing the information with a significant lag. It is therefore hoped that the weekly collaborations of the governor with the public are intended to produce facts not just impressions.
For example, the country’s foreign reserve position for Tuesday of this week would have been known when the governor presented his economic review, therefore the nation should have been told. Given that the period of the review was to the end of September, the foreign reserves position for the period was discussed, even though far more recent information is available on the reserves. In the prevailing circumstances, facts are more important than impressions in restoring confidence.
The failings of the Minister of Finance are known. There is therefore not much more to discover . . . . Unfortunately in the political arena, several undesirable qualities are much admired as impressions matter most. It was once argued that perception is as important as reality in politics; this argument has not yet been disproved.
The time has however come to save Barbados from perception by bringing reality to the fore. In times like these, we need a saviour, we need an anchor; if not, the solid rock on which we once stood will be no more.
• Clyde Mascoll is an economist and Opposition Barbados Labour Party adviser on the economy.
