In one of his films Jack Nicholson tells his adversary; “You say you want The Truth? You can’t handle The Truth.” Barbadians must now wake up to some very inconvenient truths. The current crisis has served to expose many economic, social and political deficiencies in our body politic.
One such is the reality that as a collective and as individuals we have been living above our means or as the late Stan Reid put it, we have been enjoying a lifestyle we have not earned.
I once suggested that Reid was wrong as Barbados had never defaulted on its debts, which meant that somehow or other, we were paying our way in the world. It seems obvious now, that we were borrowing excessively and selling off assets to support an inordinate level of conspicuous consumption. As Jerome Davis stated in his Guest Column of January 5, It’s Time To Pay Up.
Barbados’ indebtedness is hardly singular. In 2010 Britain had the largest budget deficit of any country in the G7. In the last decade when credit was easy, many states ran up huge debts and deficits, masking systemic weaknesses and the shallowness of an ostensible prosperity.
The indebtedness of Barbados is a consequence of both Government and private individual profligacy. Government fiscal indiscipline did not begin in 2008, though the DLP administration has committed its fair share of what Owen Arthur now calls its “excesses”.
Excessive campaign promises and expenditure to win elections is the old normal in Barbadian politics: free bus fares, free school uniforms, free text books, free university education, reverse tax credits. Creating a social safety net is one thing but when revenues fall, expenditures increase and deficits balloon, the country is in trouble with its creditors.
Moody’s lead analyst Aaron Freedman recently noted that “the Government continued to spend at levels beyond its means for the past several years, despite the steady increase in debt levels”. But excess is not a DLP monopoly. Too many people crave a safe government where there is little accountability for poor performance and low productivity. What about the unsustainable level of recurrent expenditure in a country where one third of the national product is spent on the civil service in wages and salaries? What about our credit worthiness, which Mr Freedman says is currently three levels below investment grade?
Private debt, domestic consumption is usually occasioned by expenditure on mortgages, motor vehicles and credit card debt on a variety of wants and needs. A home mortgage may be one of the best solid investments one can make.
However, over the last two decades Barbadians have overleveraged themselves by investment in too large and expensive dwellings or as Mark stated on Brasstacks last Monday, “we building houses like we live in Malibu, six bedrooms and only two people living in the house”.
The unreliability of the private transport system in Barbados accounts for the dependence on private transportation, but again there has been too great expenditure reflecting a thoughtless ostentation.
Credit card debt perhaps reflects the greatest profligacy not confined to basic needs but often extending to unnecessary brand name clothing, luxury cruises, trips to faraway places and the latest in electronic equipment apparently befitting our approaching “first world status”.
For all the talk about fiscal responsibility, successive Governments over the past two decades did not always get their spending priorities right. Much of Government indebtedness is occasioned by a citizenry that has come to believe that some abstract entity called Government owed the people a comfortable living.
This is compounded by a political culture where political parties always with an eye on the election cycle, consistently promise a rose garden without educating the populace about the cost. Post-colonial governments in the Caribbean have done a dismal job in educating or failing to educate the people. A cynic might contend that it was not in their interests so to do.
The May page of the 2014 Sagicor calendar has a caption which says: “Without adversity, we would never find our strength.” If Barbados is to recover both socially and economically we must face some inconvenient truths about ourselves as a people. A good tourist season or two and the return of a few offshore companies will not save Barbados.
The problem goes much deeper. As Peter Laurie suggested recently what we may need is nothing less than “a new model of governance”. We must disabuse ourselves of the comforting platitudes and myths and disingenuousness that has come to characterize our thinking.
Only then will we know our evident weaknesses and real strengths. The answer to our problems is the application of moral intelligence, that is, analytical insight (not pseudo-intellectual obfuscation) governed by ethical perception, an understanding of what is good for ourselves as individuals and as a people.
• Ralph Jemmott is a retired educator and social commentator; email [email protected]