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WHAT MATTERS MOST: Return to the plantation economy

DR CLYDE MASCOLL, [email protected]

WHAT MATTERS MOST: Return to the plantation economy

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THE MOST RECENT economic review reinforces my view that Barbados is being managed like a plantation economy. This characterisation seems at odds with the typical assessment that is associated with the writer.

It is fair to say that this column has sought to educate Barbadians on the meaning and nature of the raw economic data from its inception. The time has therefore come to provide a different kind of education that has more to do with understanding the decision-making behind the numbers.

It is clear that the Government’s policy emphasis has been and continues to be on restricting consumption by freezing wages and salaries, and imposing burdensome taxation on a population that is on the brink of financial collapse. In addition, there is a prevailing opinion that the creation of wealth can only come from the earning of foreign exchange through exports.

The comparison to a plantation economy (PE) is in need of some explanation. In the 1960s, some regional economists conceived of a model of the PE in an attempt to explain the evolution of Caribbean economies up to that time. In its most basic form, the model appealed to elements of the mercantilism that was used to describe the British economic system between 1500 and 1750, with an emphasis on the last 100 years.

Mercantilism may be seen in the context of an intellectual response to the issues of the times. Its singular focus was to consolidate wealth in the hands of Britain. There was a notion that the wealth of the world was fixed. Therefore, the goal was to restrict consumption of the locals and export the rest of local production to get a bigger share of the fixed wealth.

As colonies, regional economies were subjected to the same kind of intellectual thought. For example, sugar was produced for export, with no attempt to add value for the benefit of the locals. Such a system had to be reinforced by institutions and laws that were designed to impoverish the locals, while creating much needed wealth for the mother country.

The planation model was conceived around the notion of a hinterland/colony being exploited for the good of the owner. Let us replace owner by government. It is therefore possible to suggest that Barbadians’ consumption has been stifled for the good of the Government, since there was never a threat to the country’s stock of foreign exchange. This position was always supported by the policymakers.

The stifling of consumption was in the interest of the Government, not households and/or businesses. Having diagnosed that it was spending too much, the Government preferred to tax and tax Barbadians as a way of correcting the fiscal crisis. This was never feasible. It was also contrary to what was needed to grow the Barbados economy.

In this vein, the Government has managed as if wealth in Barbados was and still is fixed. Therefore, creating wealth must come from foreign people visiting our shores or buying our goods. This is as backward as it gets for a 21st century Government, especially one led by a man who preached the socialist rhetoric in his early political life.

Rather than engage in hurling insulting language at the Opposition Leader because she is raising legitimate issues, Prime Minister Stuart needs to demonstrate that he is made of the intellectual stuff that he has promised for years. So far he has not delivered and silence on the real issues is not a testimony of latent capacity; it has indeed now become a pattern of behaviour that leads to one conclusion.

It is still inconceivable to me that under the leadership of Prime Minister Stuart, labourers have been treated to a wages and incomes policy that has starved them of an opportunity to meet their basic needs.

Furthermore, the state has taken away so much of their income, while denying them access to the quality social services that they enjoyed in the not-too-distant past. This is backward by any measure and no amount of grandstanding on our Independence anniversary must not be allowed to mask the reality of the current circumstances so ably created by the Government.

Some of the policymakers have found ways to cushion the impact of their own policies on them by utilising other mechanisms. For example, in the midst of a wage freeze for the staff and other Barbadian workers, the entertainment allowance of the Central Bank moved from $600 000 in 2014 to $950 000 in 2015. This is suggestive of a certain mindset.