EDITORIAL: Ex-PM Arthur worth a listen
NOT SO LONG AGO Prime Minister Freundel Stuart declared to us all that there is only one Government of Barbados. We could not agree more; but the existence of a government in democratic societies invites comment from within the society on matters of governance generally and specifically.
Now any comment by the former Prime Minister Owen Arthur on the state of the local economy is bound to attract more than ordinary attention. His recent speech to the Institute of Chartered Accountants generated significant attendance by people of all walks but especially those involved in business and political circles.
His message was clear and simple, although we suspect that it will generate considerable comment and not a little adverse commentary. After all, that is the way of politics in a democratic society and the economy is wrapped up with the policy objectives of the government in power.
Likening the economy to a person who is asset rich and cash poor, he laid out a strategy in general terms which he posits as part of a major new way forward. He argues for a debt exchange of current bonds held by domestic bondholders and for bonds of longer maturity but designed to allow a significant savings on Government’s short term interest payments.
In this way, he thinks the country would gain some fiscal space to enable it to climb out of the hole in which it presently finds itself. This approach may have some merit but as always the devil is in the details. Mr Arthur’s contribution should add seriously to the debate, given his long tenure in the Ministry of Finance and his experience of observing economies under stress elsewhere.
Mr Arthur may be on less controversial ground with his call for a programme of privatisation and a restructuring of the operations of state enterprises. Many Barbadians will agree with this idea, but good ideas are often sacrificed on the altar of political expediency as we saw during the last election. Those times are past and the merits of a privatisation programme must now command the serious attention of the Government if we are going to ease the burden on the Central Government of carrying a disproportionate and unsustainable debt burden.
It may be too much to wish for, but a bipartisan approach to privatisation would undoubtedly be in the national interest, the more so if the disposal of state enterprises encouraged employee shareholding and other broad-based ownership vehicles which would encourage economic democracy.
However one looks at the situation, it is clear that we have got to generate growth in our economy. That is obviously the policy of both political parties, and the Minister of Finance has recently informed us that the economy is turning around.
While we can leave the merits of that debate to the politicians, it seems clear that one way or the other expenditure outflows of Government have to be reduced in order to get the economy moving again.
The value of Mr Arthur’s contribution is buttressed by his long experience of being Minister of Finance. His opinions merit respectful and considered attention.