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Caught in a fiscal bind


Clyde Mascoll

Caught in a fiscal bind

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In the throes of Barbados’ predominantly self-inflicted economic woes, the Social Partnership has broken down. The Government has failed to lead and the two major unions have been much too gullible and accommodating.
The common thread is the confused perspective of the leadership. Short-term political gain was put ahead of medium-term economic stability. The result is the potential compromise of decades of wealth creation staring Barbadian households and businesses in the face.   
In the last five years, the interests of the Social Partnership have morphed into one goal, the preservation of the Government. This led to Barbados being seen as more a society than an economy.
In support of this, the unions entered into an informal wage freeze agreement with the Government. As a result, Barbadian workers were subjected to no increase in salaries while prices increased by almost 40 per cent.
The justification for such policy could only be explained in political terms as the economics did, and still does, not make sense. As the Government became the employer of first resort in the face of an economic recession, existing workers were forced to support the fiscal recklessness of the Government by sacrificing their capacity to spend.
Unfortunately, this resulted in a smaller economy which undermined the Government’s appetite to employ more and more workers. This did not stop the Government as it found creative, but damaging, ways to finance its excessive spending.
The Government luckily stumbled on a way to avoid a serious assessment of its stewardship by diverting attention to the issue of privatization in the last election campaign.
It was a masterful short-term political approach to the obvious economic problems confronting the Government which have deteriorated in the last nine months. But day does run ’til night catch it!
The darkness that has now descended on Barbados could have been avoided through acceptance of truth followed by decisive leadership. It is midnight in our economic order.
Some may want to argue that we have seen midnight before, but they are not prepared to argue that the darkness was not born at midnight.
Even at this late hour, there is no merit in denying the birth of the darkness as failure to do so will lead to a misdiagnosis that ultimately gives rise to the wrong prescription.
This approach is so very evident in the proposals of the National Union of Public Workers which fail to understand the magnitude of the country’s fiscal issues and the mentality of the Government. Clearly, no one, not even the most loyal supporter, can continue to have faith in the ability of the Government to act in the interest of the country and not in its own self-interest.
Since it is midnight, self-interest can no longer be a relevant basis for decision-making. The Government, especially the Minister of Finance, has been caught with its fiscal pants down, therefore the 11th commandment does not apply, that is, “Thou shalt not be caught”.
There are no fiscal nipples to suck on, and if they were, there is no milk to be had. The bigger immediate problem is that no one seems prepared to drive the midnight train.
Say what you like about Prime Minister Sandiford, he was prepared to lead in the early 1990s, even when the leadership of the labour movement resisted him, unlike its current disposition. But who the cat like he lick!
The link between a strong economy and a just society is perhaps best understood when it is fully appreciated that the resources of the employed go a long way in contributing to the upkeep of the unemployed, and those not in the labour force.
In the circumstances, a social partnership ought to be concerned with the plight of the vulnerable groups, including the employed, many of whom have become the working poor.
In this regard, the public needs to be told that the Welfare Department has been instructed to send letters to persons who currently receive rental assistance.
Having requested the recipients of such assistance to attend a meeting for an interview, decisions to deny the rental assistance have been taken. These kinds of decisions are indicative of a Government which markets itself as big on social justice but is small on its capacity to deliver on the rhetoric.
It is sad that our country’s Social Partnership has now been reduced to adding and subtracting numbers for the Government, while leaving the vulnerable groups to fish in shallow ponds at midnight.

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