EDITORIAL: Do what’s best for the country
THERE IS MUCH to discuss and contemplate as it relates to the sluggish performance of the Barbados economy. The decision by Moody’s Investors Service on April 1 to downgrade the island to Caa1 from B3 will only make any financial and economic debate more divisive.
This island’s economic situation is not a rosy picture as the national debt is to high and debt servicing a burden. That the economy needs to be restructured is a moot point while the need to earn more foreign exchange is ever pressing and we cannot waiver in our unity to maintain the value of our dollar.
This is an old script which we know all too well and which must go beyond highfalutin talk. But it is not an easy course, because maintaining low unemployment levels will be a key factor.
While government presses ahead with its home-grown fiscal adjustment programme, it is evident more must be done. An urgent review of the operation of state-owned enterprises must be high on the agenda given they able to create economic havoc.
Inefficient public enterprises have been major contributors to the weak position and deficit in national finances. Many state agencies were set up for functions felt best outside the main public service, but in many instances they have been lethargic operations which have racked up huge losses.
It is crucial that reforms must kick in with a sense of urgency leading to a rationalization of the operations and where necessary closure of under-performing state-owned enterprises.
That is why the financials for the last two years ending March 2016 should be made public as it relates to agencies such as: the Caribbean Broadcasting Corporation, Transport Board, Sanitation Services Authority, the Barbados Agricultural & Development Corporation, Barbados Water Authority and National Housing Corporation.
So, even before Minister of Finance, Chris Sinckler delivers this year’s Budget he and his team of fiscal and economic experts need to advance the reform timetable. At the same time he should rid his glossary of that word “ bail-out”. The state should rid itself of enterprises which do not offer a return on equity, are a drain national resources and which could be privatized.
Government divested majority interest in two of its financially viable state companies, Barbados National Bank and Insurance Corporation of Barbados. The state now holds no stake in either of these two businesses, which continue to turn a profit for their new owners.
This country’s political and labour leaders all know that tough decisions must be taken to pull the country out of its morass. They should not shy away from doing what is right and in the country’s best interest.
Government cannot escape looking at both the efficiency and governance of all its state agencies. Neither can it continue spending what it wished it had. No state-owned enterprise must be treated as a sacred cow.