The report coming out of the International Monetary Fund (IMF) that it ‘failed to realise the damage austerity would do to Greece’ makes for an interesting observation as Barbados is negotiating its own brand of economic austerity. The moral of the story for Barbadians is simple, we need to solve our problems by leveraging homegrown knowledge capital – see article IMF admits: we failed to realise the damage austerity would do to Greece. .
The admission by IMF Chief Christine Lagarde brings back the memory of pre-2007 and how global credit rating agencies contributed to the global recession by feeding demand for helter skelter consumption and ignoring a financial framework built on a questionable financial market which continues today to peddle questionable securities the like of credit default swaps, derivatives and electronic trading to mention a few.
During the recent presentation of the 2015 Financial Statement and Budgetary Proposals minister of finance Chris Sinckler insisted it was a home grown effort. However a visit to the IMF website supports the position the economic prescription the government seems committed to is NOT home grown. The huge debt to GDP gives Barbados little or no wiggle room to ignore the advice of international financial agencies largely responsible for influencing credit rating agencies. Despite what the prime minister and finance manager would have us believe a good sovereign credit rating does matter. The junk credit rating of Barbados makes borrowing on the capital market an expensive undertaking. Ask the Cahill people!
The news making the rounds this week and publicized at the BLP Tyrol Cot meeting last Sunday night: the government has been ‘analysing’ an IMF report on the state of the Barbados economy for about three weeks since the delivery of the Budget, and is yet to give permission for its release to the public. It supports the widely held view the Stuart government is inclined to manipulate information and engage in a lack of transparency for political advantage. The minister of finance was forced to hurriedly confirm the IMF report story the Monday after the BLP Tyrol,Cot meeting. What should be 0f interest to Barbadians – minister Sinckler confirmed the IMF is still concerned about the level of quantitative easing being practiced by the central bank of Barbados and government.
On a related note: the industrial relations climate in Barbados is ‘hotting up’ and it makes one wonder how effective the social partnership has been in the last couple of years, and we add minister of labour Esther Byer to the mix. BU suspects both unions have not forgotten the ‘black eye’ given to them by government and private sector in recent years. NUPW must still be smarting from the NCC matter and under a new management seems to be bent on retrieving its flagging reputation. There is also the Caswell Franklyn factor whose union has been making more noise than the two which are more established. It is unfortunate both sides have reached a point where dialogue has broken down, the last thing Barbados needs at this time is a national strike and low productivity. In the case of the BIDC – the current matter which has triggered industrial protest – it seems to be one better left to the law court to determine, but any issue maybe a good issue for the union to claw back its influence and membership.
The perilous state of the economy requires Barbadians to leverage the benefit of the large investment in education by resolving our problems. The rising tension in industrial relations in Barbados is symptomatic of a dearth in leadership in all facets of society.