One does not have to be an Einstein to observe that we are living in troubling times. We have seen ordinary people topple Mubarak who has held power for thirty years in a monarchical style government in Egypt. As we type this blog news services are reporting demonstrations in Libya, Tunisia, Algeria to name a few places. Volatility in the Arab world is always a concern to the rest of the world, especially small open economies like Barbados reliant on fossil imports. Forecast for Brent Crude closed at USD102.52 effective 18 February 2011. There is even the possibility of a US government shutdown because of a budget standoff between Republicans and Democrats. The foregoing makes the business of economic forecasting a crystal ball affair for local economists who sit in the Tom Adams Financial Centre.
Last week Minister of Finance Chris Sinckler announced with fanfare that the Barbados economy grew by 0.3 per cent at the end of last year and had not contracted by 0.4 per cent as earlier projected. The revelation appears to have precipitated a spasm of enthusiasm among local Central Bankers who were reported to be busy revising first quarter projection from 2% to 2.5%. The news could not have come at a more opportune time for Barbados with the embattled credit rating agencies Moody’s and Standard & Poor’s reported to be visiting Barbados soon. Barbados currently has a rating a notch above junk status.
BU is pleased the government has been able to reverse several months of GDP decline but refuses to jump over the moon until the growth is sustained over at least three quarters. The longer term objective is to see some strategies implemented to guide transformation in the productive sectors of the economy. A recent loan for USD40 million from the IADB to be used to develop the alternative energy sector is good news.
Minister Chris Sinckler who was appointed by late Prime Minster David Thompson to manage the influential finance ministry maybe feeling some pressure from aspirant David Estwick. It is an open secret that Estwick views the finance ministry as belonging to him. Now that Stuart is at the helm there is a suggestion which has been gaining traction that Estwick maybe the finance minister in waiting. Stuart has rewarded Kellman with a ministry and Estwick must think his chance is around the corner. How can Stuart forget how they fought, albeit a losing battle, together to keep Thompson out and Mascoll in. Perhaps the scheduling of a press conference on a Saturday morning was more about political spin to make Sinckler look good and less about pre-empting the Arthur led opposition press conference held on the same Saturday.
Let it not go about that BU does not have a healthy appreciation for political gamesmanship between the parties, however, this time around we believe both the BLP and DLP have missed the plot. The turbulence in the world economy demands that political parties in Barbados put country first. and operate in a bipartisan manner. The inclination to practice the same old politics might impress the decaffeinated one of the Sanka variety but not many others.
We agree with Minister Sinckler that if the government does not plan to borrow on the world market then we should not worry about credit rating downgrades. What he conveniently neglected to tell us is that local companies operating internationally are being affected by the downgrade, ask Sagicor.
By the way, has the gun incident which involved Estwick and Dale Marshall reported to be resting with the Committee of Privileges in our parliament been resolved?