ON THE LEFT: Great cause for concern
OUR FUTURE IS NOT what it used to be. Over 40 years Barbados has emerged as one of the world’s great examples of civilised development. It has managed to accomplish a great deal of that which is good for many while having so very little to work with.
Against the odds and very often in the face of some of the sternest challenges our nation has succeeded in securing for its people a quality of life that is admirable by any standard, but it is an accomplishment which has not been achieved by chance.
Indeed, it has been rooted in the practice of a very enlightened philosophy which has put the human dimension at the centre of everything our nation has set out to achieve.
In that regard, growth and development have consistently been made to rest on the quality of the human capital as distinct from financial and natural resources. The state has also played a role not dissimilar to that of many Scandinavian countries on ensuring that the principal claim on its resources has been activities designed to meet the basic needs of the people.
The task of building a sound economy has been attended to with great prudence, with great adaptability over an extended period. At the core of it has been a reliance on a fixed exchange rate as the anchor of our economic policies.
The commitment to a fixed exchange rate has carried with it the obligation to maintain fiscal discipline, an obligation as well to so tailor the use of our resources as to realise a sustainable rate of growth that does not put a strain on the capacities of our natural resources at any given time.
Since 2008, the economy has been caught up in a vortex caused by a confluence of adverse forces which have reinforced each other in a highly negative way to put the economy on a dangerous downward spiral. The country now finds itself in a situation where there is a danger of having an economy that is not viable.
We will do well not to understate the significance of the loss of economic viability. If an economy does not generate economic growth over an extended period of time that can in and of itself trigger economic imbalances and disorder that can take decades. It has happened elsewhere as in the case of Japan and in our neighbourhood in the case of Jamaica and Guyana.
It must therefore be a cause for great concern that the Barbados economy is now the worst performing economy in the Caribbean.
The future of Barbados is therefore not what it used to be in large measure because the Government of Barbados is pursuing a failed fiscal policy. Indeed, the stage has now been reached where the fiscal consolidation programme such as has been invoked in recent years has not gotten the job done, cannot get the job done and only major initiatives that are radically different from existing policies will suffice to get the job done.
These remarks were made by former Prime Minister Owen Arthur while delivering the Institute of Chartered Accountants of Barbados 40th anniversary lecture last week.