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    September 19

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BEHIND THE HEADLINES: Voters have short memories

TONY BEST,

Added 18 April 2015

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THE IDEA OF BECOMING A REPUBLIC has not appeal to me because it is not going to reduce the price of rice or sugar,” said Peter Jackson.

Jackson, a Bajan in Toronto, Canada, was giving his take on what may have driven Prime Minister Freundel Stuart to raise the issue of ditching the Queen as Barbados’ head of state and ushering in an era of republicanism after almost 49 years of independence as a monarchy.

Most Bajans seemingly agreed with Jackson, insisting Stuart’s announcement was an attempt to get people’s minds off their economic troubles. If that was his intention, then the trial balloon failed. For whether at home or abroad in North America, the people shrugged their collective shoulders and resumed their focus on unemployment, debt and paying for their children’s higher education at the University of the West Indies, now that the Government has imposed tuition fees on Bajan students.

That intense gaze on the economy isn’t an exclusively Bajan thing. It is shared by voters in Canada and Britain, two countries whose markets are vital to Barbados’ tourism industry. With elections due in both Canada and Britain this year, Barbadians and their Government can’t afford to ignore the outcomes. They would do that to their peril.

The economy is going to be the major campaign issue in both rich countries as it will be whenever Bajans go to the polls again. By most objective measures, Canadians seem satisfied with the way things are going at home when it comes to the economy. They are borrowing at a hectic pace, pushing consumer debt to its highest levels in decades. House prices, fuelled by rock bottom interest rates, are also on the rise, a clear indication of confidence in the economy.

True, according to Canada’s Central Bank, “lower oil prices continue to dampen overall sales outlook of firms, weighing on investment and hiring intentions”. The tumbling oil prices are hurting Alberta and other oil-patch provinces, forcing the central bank to acknowledge that “signs of a spillover to other sectors” are beginning to emerge.

Even so, the central bank, in its recent quarterly business outlook survey, found the general mood of corporate Canada to be surprisingly positive, especially in central Canada where the declining value of the dollar and the stronger United States economy are raising expectations of accelerated economic growth.

That explains why Prime Minister of Canada Stephen Harper, and his Minister of Finance Joe Oliver, have apparently decided to forego injecting a stimulus into the economy in the run up to the upcoming election.

They see little need for an election giveaway, despite the political appeal of Liberal Party leader Justin Trudeau, whose youth and family name can galvanise support for the party at the expense of Conservatives.

But Harper, a clever political strategist, has attempted to blunt some of Trudeau’s attraction by zeroing in on terrorism, raising fears about domestic security issues.

Was that a distraction? Canadians believe it is a realistic fear. So when Peter Mayers, director of the Barbados Tourism Marketing Inc in Canada, said recently “we couldn’t be more thrilled with the growth we are seeing from Canada,” a 27 per cent jump in January, he was reflecting people’s confidence in the future.

Across the pond in Britain, the news of the 0.7 per cent growth in the first quarter of the year was enough to dampen fears that the economy was sliding back into negative territory.

Indeed, growth may even match last year’s 2.8 per cent expansion. It was enough to give Prime Minister David Cameron ammunition to fire off a verbal blast at what he called the “disaster of a Ed Milliband government” that could be formed should voters opt for the British Labour Party and ditch the Conservative-Liberal coalition government.

Not so fast. For as Paul Krugman, the Nobel Prize winning economist asserted a few days ago: “Britain’s economic performance since the financial crisis has been startingly bad. A tentative recovery began in 2009, but it stalled in 2010. Although growth resumed in 2013, real per capita income is only now reaching its level on the eve of the crisis – which means that Britain has had a much worse track record since 2007 than it had during the Great Depression.”

How come Cameron is exuding confidence? Krugman blames “the weakness of the opposition, which has done an absolutely terrible job of making its case” and the “fecklessness of the news media which has gotten much wrong”.

Add the short memories of voters to the equation and things would become clearer, meaning people often forget hard times when things improve. They tend to shunt aside what happened during a five-year period but concentrate on economic performance over a six to 12 months time frame.

In effect, complained Krugman, “elections which are supposed to hold politicians accountable – don’t seem to fulfill that function very well when it comes to economic policy”.

That may be a lesson for the ruling Democratic Labour Party and the Opposition Barbados Labour Party headed by Mia Mottley. For as Barbados first Premier Sir Grantley Adams once noted, people have short memories.

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