EDITORIA: There must be a better way than ‘stop-go’
As the country continues to move slowly along the path of resolution to the problems of the economy, we anticipate that all Barbadians will continue to work towards a lasting solution, and that some way out of what the Prime Minister has called systemic problems of our economy will be found.
We cannot have a situation where since our Independence it appears that we can exist for about two decades and then the road beneath our feet opens up into economic pot holes or worse. Our existence as an ordered society or a well run economy is fatally jeopardized if that sort of stop-go economy becomes our fate.
If the Prime Minister’s description of our condition is that it is actuated by systemic conditions then we have to rationally examine the facts in order to come to a lasting solution. Such a solution will have as one of its objectives the identification of the appropriate machinery not only to rescue the country, if it comes to that, but more to the point, to deliver a stitch-in-time-saves-nine mechanism.
All Barbadians would be interested in this point because when the pot holes appear we all experience a bumpy ride which is sometimes not ameliorated even by the social shock absorbers which any Government will seek to activate in times of stress.
A criticism being made is that the Government waited too late to deal decisively with the crisis. Whether this is so; it places a certain premium value on techniques of prevention which are always better than the cure.
Fortunately, we have at least two periodsof relative economic calm and prosperityto which we can look for guidance as we examine the problem. If we understand the Prime Minister in his recent speech, Prime Ministers Barrow and Arthur avoided the problems which enveloped the Adams, Sandiford and the present administrations.
We now know that very careful management of foreign reserves and the deficit are key factors. The Central Bank, from what we know from the Governor, has in place a mechanism for monitoring the reserves on a daily basis.
We suspect the deficit is equally carefully monitored. These mechanisms must be very useful to a Minister of Finance who can observe the ebb and flow of the reserves and the deficit so timely action can be taken.
It may well be that the policy differences between administrations may call for careful analysis because the application of different policy options to the same problem may often produce vastly different results, and a relevant question if we are to solve the systemic problems is, whether the Adams and Sandiford and present administrations adopted policies which resulted in their having to go to the IMF.
Perhaps we should have undertaken this study since 1991; or perhaps we did not learn the lessons of that era well. In this present crisis we know that there are policy differences between the two parties; and that this has been so since 2008. As we seek to discover if we can avoid the problems of our stop-go cycles; then economic policy and management differences should also be examined. There must be a better way.