EDITORIAL: Reduce barriers to growth
THE INTERNATIONAL MONETARY FUND (IMF) has given its verdict on Barbados’ economy following its latest national consultation. There is some measure of optimism. But clearly, the country needs to do much better if it is to get off the road of economic stagnation it has travelled since the global recession of 2008-09.
We can only hope that the outlook for the remainder of the year remains promising and that the economic forecast does not dissipate. Barbados needs to record robust growth if we are to have a better society and higher standard of living. It is that growth that will ensure the country can pay for health care, education and public infrastructure, and fight poverty without additional taxation.
While the global recession has had an undisputed impact on the economy, there are internal forces that have played a part in making a bad situation worse.
Poor productivity has been constantly identified as one. It is a matter for Government, the private sector and labour.
There is also the need to reduce the barriers to growth, ensure the right fiscal incentives are in place for investment and workers, reform the public sector and embrace innovation such as the widespread use of alternative energy. The country also needs strong political leadership right at the top with no foot-dragging, especially as it relates to approval and implementation of plans.
It is not a time for stupid politics, but rational policies.
The IMF report comes at perhaps the ideal time. It lends credence to what the Central Bank has been saying about the economy and precedes the much anticipated Budget to be presented by Minister of Finance Chris Sinckler. He will have before him the recommendations of his economic advisers, the business community, labour and, of course, the IMF.
We expect that the economic reforms Government started will be continued,
but it is also true that many Barbadians are unable to shoulder more austere measures, cuts and further belt-tightening.
The minister will therefore need to decide whether his Budget will be one aimed at addressing the economic, fiscal and social issues by eliminating waste, reducing debts and focusing beyond austerity, or whether it will primarily be looking at merely cutting programmes and dealing the death of the welfare state.
The Budget must not shy away from addressing the concerns raised by international credit rating agencies which have downgraded Barbados’ bonds to junk status, making international borrowing more expensive and Government paper unattractive to institutional investors.
Mr Sinckler must understand Barbadians want compassion, optimism and prudence from him. The country wants a responsible approach to its fiscal policy which can open the doors to new quality, well-paying jobs, to help businesses prosper and attract foreign investment.
The debate must be clear on the pathway forward; austerity versus growth.