Submitted By Dr. George Brathwaite
Finance Minister, Christopher Sinckler, will tomorrow [15/08/2016] deliver the 2016 Financial Statement and Budgetary proposals. This occasion may well be Minister Sinckler’s last budget presentation, based strictly upon the unflattering performances of the Barbados economy throughout his stewardship. Perceivably, people and progress have been pushed from being the central plank of national development priorities. Uncertainty and economic insecurity now choke and strangle Barbadians at every turn.
The Democratic Labour Party (DLP), with Sinckler as the Minister of Finance, has been marked by a prolonged lack of creativity. Effective leadership has been an absent feature, and the reluctance for acting expeditiously has precipitously reaped a badly damaged social economy. It was Minister Sinckler in the 2012 budget who suggested that the DLP stood committed on “a platform that prioritises economic stability and growth, social advancement and security, and human, cultural and psychological development.” The evidence against the DLP’s paltry returns are shameful and alarming.
The facts indicate that in Barbados, there is a falling standard of living, fall-back on the quality of life, and rising concerns over mounting social ills which are now badly affecting the society. The DLP has contributed greatly to the ‘backwardness’ enveloping Barbados of which some things are structural but were left unattended. Coupled with declining revenues and insufficient inflows of foreign exchange, the increasing exit of foreign companies from Barbados is problematic. The situation lessens Sinckler’s room for macroeconomic manoeuvring. By not improving Barbados’ ‘ease of doing business’, the Minister of Finance’s interventions (or lack thereof) may push away even more companies, and force displaced persons to join the unemployment lines.
In tourism, Barbados’ visitor spend although increasing in 2016, remains below a threshold that would positively and significantly show the value linkage between registering increased numbers of cruise and stay over visitors and the government distributing its social welfare programmes. Poverty has grown in Barbados, and Minister Sinckler must be clear on how his budgetary proposals will bring relief for many Barbadians feeling the predicaments of his previously enunciated policies of structural adjustment and stability.
Additionally, the foolhardiness of the DLP government to continuously rely on the Central Bank’s printing of money has been counterproductive for the economy and society. The failure of the DLP government to revitalise manufacturing, construction, and push small and medium enterprises to become more export-oriented have made more vulnerable the state of Barbados’ social economy. It sometimes seems as though that both the Minister and the Governor want to jump and wave to the tune saying that local debt is acceptable as opposed to incurring more foreign debt.
In April, economist Ryan Straughn indicated that with Barbados receiving the latest of more than a dozen downgrades, it “clearly demonstrates that the Freundel Stuart administration has successfully fooled itself into thinking that the Home Grown Fiscal Stabilisation and Economic Revitalization Programme is working,” and suggested that the Finance Minister persists in “pursuing a path that takes Barbados closer to economic ruin.” Defiantly, Sinckler maintains a political optimism for achieving macroeconomic stability and reigniting the Barbados economy. He often speaks of fuelling real and sustained growth, but candidly, these goals have rested more on his apparent political guile than on his utilisation of sound economic judgement and practical decision-making.
Nonetheless, Barbadians are anxious to hear the overdue budgetary statement, and to examine the extent that the Finance Minister would arrest the situations of wastage, debt, and inefficiency. The Minister may want to draw on public/private projects that are being advocated in the interest of national development. Surely, few are convinced with Prime Minister Stuart’s premise that “the benefits are beginning to trickle down to our people once again.” Given the country’s unflattering socio-economic indicators, and the mixed signals being sent to Barbadians depending on who is doing the talking, the anticipation for this year’s budget will attract the personalised question of ‘what is in it for me’, while collectively saying to whoever will listen, that ‘we can’t tek it no more’!
Mr. Sinckler must not get stuck on first quarter employment data. Nor should he be contented with political style over substance, particularly when many Barbadians are experiencing hard and strenuous times. Across the public sector and in sections of the private sector, the industrial relations climate remains unsettled at best. The DLP’s actions towards the trade unions have appeared more punitive than restorative or win-win oriented. The vexing issues of low worker morale and low productivity attract capital’s attention and government’s bashing of the worker. Generally, persons want:
An end to the persistence of low wages and high prices;
The policy and incentive instruments that encourage local investment while at the same time, ensuring that there is more disposable income in peoples’ pockets;
Respect built on economic justice for trade unions and their memberships after wage increases have not been forthcoming in almost a decade;
A halt to the growing size of the DLP-created category of worker commonly referred to as the working poor, and largely comprising many persons from the once flourishing middle class.
Minister Sinckler is likely to be steadier with both his tongue and his policy framework given that a general elections build-up is already taking shape. He will be reluctant to impose new taxes. Barbados, in the past few years, became home to an extremely overtaxed population. Hence, householders and businesses will hope for taxation ease. They will know if the Governor of the Central Bank’s concerns regarding the foreign reserves are to invoke more stringent regulations and controls when it comes to getting and spending foreign dollars. Constraints surrounding the Pound Sterling make things more difficult for those receiving pensions from the old imperial power. On person’s minds will be the possibility that new restrictions will curb their spending power and capability to source cheaper goods and services.
Plainly put, numerous Barbadians remain sceptical about this Minister of Finance’s plan to promote prosperity in Barbados. Last year, Minister Sinckler was saying in his budget that “the single largest issue facing the economy, is that economic growth in Barbados remains below the 2.5 to 3.0 percent that is normal for our economy.” With things pointing to another year of below par growth, many persons are doubtful that this DLP can fix an ailing and under-performing economy.
Can Sinckler fix the economy, and will his fiscal management be able ‘to reinvigorate and deepen economic growth” to between 2.5 to 3.5 % of GDP? Will the Minister of Finance be persuaded by lessons of our history and practical experiences? In 1982, Prime Minister JMGM ‘Tom’ Adams stated that “while foreign exchange reserves can and have been augmented by judicious borrowing, this must be kept within strictly manageable limits and used for investment, not consumption purposes.” More recently, former Prime Minister Owen Arthur cautioned that Barbados’ “foreign exchange reserves have fallen by half a billion dollars over the course of the last few years; this is not the time for the Central Bank of Barbados to be printing money to finance a Government’s deficit.”
Will Sinckler heed the sage advice of two former and successful Ministers of Finance, or will he bow to the vagary of an upcoming general elections? The economic insecurity that has been stirring things such as higher unemployment and crime rates, must be tackled in the budget. Only the Minister knows if he will give the Police and the Courts the resources they need to adequately fight crime and deliver justice. Only Minister Sinckler can say what he will do to create jobs when the restlessness is already bringing about insecurity.
Also, it is vital that this country continues to provide quality health care and education, although the DLP’s policy options have seriously imperilled the fate of many Barbadians wanting to pursue tertiary education. The probable introduction of user fees at the QEH will likely be deferred but, in its place, Barbadians may see the Finance Minister roll back on free bus fares for school children while increasing the adult fare by as much as 50 cents per ride.
The national uncertainty amounts to widespread economic insecurity. Sinckler must be empathetic to the poor, caring to the elderly, and able to deliver for the youth of which too many are unemployed or underemployed. He must inspire our business people who cannot get things going due to government’s own lack of urgency in decision-making and failure to settle the state’s arrears. This budget will be pivotal in the shaping of Barbados. As it is, the economic insecurity is real but this writer hopes that the immediate future is not laced with more austerity and joblessness.
(Dr. George C. Brathwaite is a researcher and political consultant, and up until recently, he was editor of Caribbean Times (Antigua). Email: email@example.com ).