‘Ugly politics’ cause of economic crisis
“There is a sense the driver can’t drive.”
That blunt assessment of Barbados’ economic plight and the management of the “economic crisis” facing the country came from one of its highly regarded voices, Harold Hoyte, Editor Emeritus of the NATION and a member of the Central Bank’s board of directors.
In an analysis of Barbados’ current economic picture, Hoyte said “the vehicle we are driving is on E for empty and there is a sense the driver can’t drive”.
“I say the driver can’t drive because despite budgetary impositions personal income receipts are down by ten per cent, compared to 2012,” he went on. “Corporation taxes down by 40 per cent; VAT receipts down by 4.6 per cent in spite of a 2.5 per cent increase in the rate two years ago.”
The keynote speaker at a three-hour symposium at St Leonard’s Church, a 77 year old independent Anglican-oriented house of worship founded and maintained by Barbadians, Hoyte described his birthplace as a country “undergoing an economic crisis,” coupled with a social crisis.
“The ugliness of the Barbados economy today is as a direct result of the ugliness of our politics over the past two decades,” he said to the audience of Bajan-New Yorkers in the heart of Brooklyn’s Bedford-Stuyvesant community.
He spoke of the decline of foreign reserves; the plummeting foreign direct investment; the precipitous drop in private investment and the continuing poor performance of the tourism industry as reflected in the decline in long-stay arrivals in a two-year period ending in 2013, as further evidence of the poor state of the economy and its management.
As if those factors weren’t bad enough, he cited the buying of government paper by the Central Bank “in order to shore up Government” to indicate that the country’s economy was in deep, deep trouble.
And he placed the blame on successive governments of the Barbados Labour Party and the Democratic Labour Party.
“The failure of the political directorate to restructure the Barbados economy, given global trends, and refusal to confront the need to reduce, rather than increase the size of the civil service at least ten years ago, placed us on a tenuous path of growth that turned out to be hazardous,” Hoyte argued.
“Unfortunately, there was political consideration that became pre-eminent for the BLP [Barbados Labour Party] with a World Cup on the horizon [in 2007] and an election to win thereafter. To be charitable, perhaps the decisions were being contemplated for the aftermath of an anticipated victory. But the deliberate hand of the electorate dictated otherwise.”
While Hoyte blamed the BLP for missing the boat in the run-up to 2007, “when there was goodwill and time on their side to tackle both economic and public sector reform, due to “narrow political considerations” he said that the “glory of an election” victory by the Democratic Labour Party (DLP) in 2008 after almost 15 years in the “political wilderness” and the perceived need to fulfil election promises made during the campaign six years ago deprived the new DLP administration of the political will to tackle the adverse economic headwinds confronting the country.
“After that the DLP showed a lack of political will to take the tough decision on expenditure in the light of an economic downturn,” he insisted.
“They chose instead to impose unnecessary and onerous tax measures to finance the big spree of social entitlements and embark upon an orgy of freeness, feeding from the fatted calf when the times required leaner cuisine.”