The George Brathwaite Column – Sinckler’s Swan Song: Sting or Solution?

George C. Brathwaite (PhD)

In the 2016 budgetary proposals, the Minister of Finance and Economic Affairs stated that “we must push ourselves harder to be more efficient and proficient in accommodating investors, both domestic and foreign, in getting business done in this country.” Minister Christopher Sinckler was in effect, admitting that there was an urgent need “to drive investment, create economic opportunities, grow jobs, increase foreign exchange earnings,” and expand Barbados’ economy. Surely, within the next 24 hours, Barbadians would hear yet another budgetary statement from the economic spearhead of the beleaguered Democratic Labour Party (DLP).

Minister Sinckler’s budgetary proposals will undoubtedly be overloaded with virtue and religious quotes, but have lasting social and economic impact on families and businesses long after the next general election results are known. Sinckler must be pragmatic and demonstrate responsibility in the national interest instead of buckling to party paramountcy. Hitherto, such maturity has escaped both his mouth and macroeconomic management of the Barbados economy.

In late 2014, the Finance Minister told Barbadians that “the disciplined and strategic interventions of the Government have begun to bear fruit in several parts of our economy.” Almost three years later, except for tourism numbers rather than spend and financial intake, one would hardly be so bold to suggest that the fruits are visible. Still, households and business are facing grave uncertainty, the plight of high taxation is burdensome, the declining incidence of proper services provision is rubbishing the quality of life, and the threat of further austerity measures lurk across the public service.

For the past nine years, local and foreign investments declined and job creation in Barbados has been practically non-existent with wage growth lagging amidst joblessness and inflation. Christopher Sinckler, in his swan song, will surely attempt to plead a case for the DLP. However, Barbadians are worrying whether the country would be further sunk by Sinckler’s scrappy economics of austerity, and become socially pilloried by the politics of subterfuge.

Will the macroeconomic policies and budgetary proposals be imprisoned by Prime Minister Stuart’s dragging out every decision that he must make with the next general elections in our foresights? Moreover, to what extent will there be any solutions to the vexing issues that are compounded by structural deficiencies and the failed systemic policies and indiscipline of the DLP? President of the Caribbean Development Bank, Dr Warren Smith, said a few days ago that the bank’s officials were “anxious for the fiscal reforms and stabilisation of the fiscal and debt situation” to be fixed before bailing Barbados.

The economic concoctions put together by the DLP – first under prime ministers David Thompson and now Freundel Stuart – have proven to increase the national debt (i.e. local and foreign) rather than grow the national income. Tragically for the national economy between 2008 and 2016, Barbados recorded real growth rates at 0.4%; -4.0%; 0.3%; 0.8%; 0.3%; -0.1%; 0.2%; 0.9%; and 1. 7 % respectively. Miserably, gross government debt in the same corresponding years reflected 52.6%; 63.2%; 71.9%; 78.0%; 83.9%; 96.4%; 100.1%; 104.9%; and 107.9% as a percentage of GDP. Comparatively, these ratios are mind-boggling; while they may reflect recessionary pressures in the early stages, clearly since 2011, fiscal indiscipline combined with high debt levels and insular incompetence within Cabinet guaranteed difficult times for Barbadians. The Article IV Consultation Report of August 2016, assessed that Barbados’ authorities “needed to put the high and growing public debt on a sustainable path, while minimizing the negative impact on growth and preserving social cohesion.”

Daily, Barbadians feel the weightiness of economic inertia alongside the badly torn social fabric of society. Barbados is experiencing unprecedented gun violence; and there are mounting concerns over youth violence, specifically school boys and girls. Recently, Shone Gibbs, President of Barbados National Council of Parent Teacher Association reacted to a horrible incident lamenting that: “What we are seeing is not normal, what we are seeing is untenable and it must be arrested in the interest of our country.” Yet, one must ask the Prime Minister, the Minister of Finance and the Minister of Education, what programs are they ushering in that would effectively reduce violence in our schools and arrest the prevalent deviance? The teachers and their unions have been complaining about growing violence among schoolchildren, but without resolve.

Moreover, several hush-hush decisions continue to plague the DLP, and the shenanigans create speculation and allegations of collusion and corruption. One would have thought that after the Cahill debacle, the Freundel Stuart-led Cabinet would have figured out that a large part of gaining national support for major projects such as the Hyatt, means committing to sound processes of accountability and transparency. Cabinet fails to understand that although some contractors, developers, and erstwhile businesses have mega financial resources, it is not perceivable to the public that one or two fairer entities continue to grab the lion-share of everything viable, while others scrounge to eke out a daily living. Pandering nefariously to special interests is antithetical to national development. Whether by covert facilitation or overt favouritism, Stuart, Sinckler, Lowe, Lashley, Estwick, and others cannot realistically abandon distributive and social justice in Barbados. Spurious actions of the Government or talk of trickle-down effects by those glued to classical liberalism will not bring about the widespread empowerment and prosperity for Barbadian people and businesses.

Sinckler previously suggested that Government was targeting a fiscal deficit of around 3 % of GDP by the end of 2014/15 and an acceleration of growth thereafter, to 4 % by 2020. This is 2017 and few among independent observers foresee any likelihood that Barbados would crest 2 % growth this year. The Acting Governor of the Central Bank has advised that given the decline in international reserves over the past three years, there is ‘need for further fiscal consolidation’. However, Minister Sinckler, as he has done before, must not rely solely on ‘extraordinary transactions’ such as those undertaken in 2011 and 2012 to bump up foreign reserves. At that time, sale of the Barbados Light and Power Company to Emera and the divestment of the Government’s shares in the Barbados National Bank boosted the declining levels of foreign exchange. Since then, Barbados has been negatively impacted by diminishing foreign reserves.

Minister Sinckler’s optimism for the economy has floated viscerally with more promises of divestments. For example, Sinckler anticipated that the sale of the Barbados National Terminal Company Limited (BNTCL) to SOL Barbados Limited would have long been completed; he expected the proceeds would trigger a 1 % of GDP in revenue inflows. The sale has not been completed nor have other major investment projects like the Hyatt got off the ground. The accompanying secrecy built uncertainty among the people, particularly with a shrinking middleclass scrunching to make a dollar.

The Minister of Finance must come down from his high horse and forget the nauseating narcissism. Sinckler must ensure that this 2017 budget focuses on the collective good of the nation, and he must resist the DLP’s thirst for a third term. He needs to put Barbados first while exercising fiscal discipline. Certainly, Barbadians are praying that Minister Sinckler in his swan song, brings solutions and not another suffocating sting of increased taxation and job losses. The Finance Minister needs to itemise and give details ensuring the following:

  1. Immediate adjustment is done to reduce the fiscal deficit and the debt-to-GDP ratio to more acceptable levels
  2. Once again, attract local and foreign investments of the magnitude that can be means for growing the foreign reserves
  3. Continue to diversify our tourism product while paying attention to the markets, and the spend instead of only aggregate numbers
  4. Make job creation, skills training, and retooling for the labour market priorities
  5. Challenge both the public and private sectors through various economic incentives so that there can be manifested commitment to productivity, efficiency, competitiveness and excellence in the delivery of services such as healthcare, sanitation, public transport, and education.

(Dr George C. Brathwaite is a political consultant. Email: brathwaitegc@gmail.com )

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29 Comments on “The George Brathwaite Column – Sinckler’s Swan Song: Sting or Solution?”

  1. Carson C. Cadogan May 30, 2017 at 8:55 AM #

    Morning George

    Singing for your supper bright and early again I see.

    What post are you hoping to get?

    Like

  2. Bernard Codrington. May 30, 2017 at 10:19 AM #

    Good piece of writing George. You are reminding the BU Household the major issues that should be addressed in the Budgetary Statement.
    With nothing to lose I hope the Opposition will use this opportunity to address these issues and hint how they will kick start the quest for economic growth,and point out where the proposed measures will not.

    View these exercises as the start of the election process.

    Like

  3. Hal Austin May 30, 2017 at 10:30 AM #

    With nothing to lose, and a few months from a general election, I hope the Opposition will use its reply to outline its programme in government. No waffle, just straight talking.

    Like

  4. Bernard Codrington. May 30, 2017 at 10:36 AM #

    Yes Hal.

    This is the biggest audience that either party will have before General Elections 2018.

    Like

  5. Hants May 30, 2017 at 11:04 AM #

    “In his recently released report for 2016, he highlighted six businesses in which there were no contractual agreements, yet Government had advanced them sums totaling $983.9 million at the end of March 31, 2016.”

    http://www.nationnews.com/nationnews/news/97286/loans-concern#sthash.sUKCnVLX.dpuf

    Like

  6. Hal Austin May 30, 2017 at 11:18 AM #

    Why should taxpayers pay for a tourism marketing organisation? That cost should be covered by a levy on the industry, as in most well managed countries.

    Like

  7. David May 30, 2017 at 11:20 AM #

    @Hal

    Is there any sector in the UK (Europe) that is subsidized?

    Like

  8. Frustrated Businessman: enact Facilitation Martial Law! May 30, 2017 at 11:34 AM #

    Like road tax and vehicle import duty should pay for roads?

    Like environmental levy should pay for garbage management?

    Like corporate tax should pay for corporate facilitation?

    On what planet do you exist? Gov’t’s are not expected to balance budgets and administer simple costs-analysis monetary practice. That is the realm of the business community who have to deal with reality every day or die.

    http://www.pwc.com/gx/en/services/tax/paying-taxes-2017/comparative-modeller.html

    Liked by 1 person

  9. Vincent Haynes May 30, 2017 at 11:59 AM #

    President of the Caribbean Development Bank, Dr Warren Smith, said a few days ago that the bank’s officials were “anxious for the fiscal reforms and stabilisation of the fiscal and debt situation” to be fixed before bailing Barbados.
    …………………………………………………………………………………

    That short statement above is the crux of the matter.

    Todays budget is neither here nor there unless the fiscal reforms are undertaken which would allow assistance from the CDB/IMF.

    Thats the long and short of where Bim is presently,we are incapable of pulling ourselves out of the quicksand that we are in,only by undertaking certain measures can we seek assistance to get us out of this state.

    Like

  10. Hal Austin May 30, 2017 at 12:12 PM #

    David,

    Yes. Where do you want to start? Subsidising an industry must serve a wider public service purpose ie farming, which followed the Second World War. But in financial services and tourism the industries at the bill. In tourism, let the industry foot the bill.

    Like

  11. Hal Austin May 30, 2017 at 12:17 PM #

    Frustrated Businessman,

    Yes. Road tax should pay for road maintenance. And yes, the environmental levy should pay for garbage management and street cleaning. And yes, corporate tax should pay for the administration o the business sector. I am living in the real world, that is why the Barbados economy is up the creek. The whole nation wants a freebie. But governments do not work, the money they spend comes from taxpayers.
    Let us have a hypothecate tax system so taxpayers know how their money is being spent. Or do Bajans object to that too?

    Like

  12. David May 30, 2017 at 12:31 PM #

    @Hal

    Are you aware that the tourism sector- whether you agree or not- is responsible for paying the national bills?

    Like

  13. Frustrated Businessman: enact Facilitation Martial Law! May 30, 2017 at 12:36 PM #

    Hal Austin May 30, 2017 at 12:17 PM #
    Frustrated Businessman,

    Yes. Road tax should pay for road maintenance. And yes, the environmental levy should pay for garbage management and street cleaning. And yes, corporate tax should pay for the administration o the business sector. I am living in the real world, that is why the Barbados economy is up the creek. The whole nation wants a freebie. But governments do not work, the money they spend comes from taxpayers.
    Let us have a hypothecate tax system so taxpayers know how their money is being spent. Or do Bajans object to that too?

    Like the real world you mean? Good luck with that in our teefin’ banana republic.

    Like

  14. angela Skeete May 30, 2017 at 12:42 PM #

    As the right Hon Errol Barrow would say Champagne taste and mauby pockets. That is the reality barbadians face today . Get real.

    Like

  15. Hal Austin May 30, 2017 at 12:49 PM #

    David,
    Tourism alone is not responsible fore paying the national bills. You exaggerate, but I understand. What is the tax gap in Barbados?
    That we have to over-depend on tourism is part of our post-independence economic failure. Let us assume you are right, and you re not, where is our leisure industry, or are we assuming the tourists just come to Barbados to see our wonderful smiles and pristine beaches? We need a leisure and tourism strategy.
    Ten years ago, at the time of the Cricket World Cu, I suggested that the re-development of Kensington Oval should be comprehensive, turning it in to an entertainment venue at the very heart of Eastern Caribbean weekend entertainment; the Nation was kind enough to publish the letter.
    I suggested that the government should use the Yen carry trade to fund the development, but like most of my ideas, it did not merit discussion. Although late it is still a good idea, although we would have to look elsewhere for funding.
    And, finally, we have one genuine world-class product, not cricket or tourism, but rum. Why is it that our rum industry remains a failing largely family-owned cottage industry? Compare it with the Scottish whisky industry.

    Like

  16. David May 30, 2017 at 12:51 PM #

    @Hal

    When we refer to tourism paying the bills it is in the context of generating forex.

    Like

  17. angela Skeete May 30, 2017 at 12:56 PM #

    Hoping that Sinckler has the guts to get those that have climb the top of the ladder and has pleasure in kicking the nucket down just hoping that Sinckler pull the govt nipples out their mouth starting with health care

    Like

  18. London Morris May 30, 2017 at 1:37 PM #

    angela

    Sinckler is a poser, an actor and failure. In fact he has only be successful at being a failure……………….his acting and posing talents are basic and non descript, but he excels at failing.

    Like

  19. David May 30, 2017 at 1:45 PM #

    The BU household read a press report recently which showed the PM, MoF and GoCBB happily huddled at a dinner table at a recent central bank function that from all reports was a lavish one. Here is the question the public needs to have answered:

    What is Governor Haynes saying to the MoF and the CBBBOD that differs from former GoCBB Worrell.

    Like

  20. London Morris May 30, 2017 at 1:52 PM #

    Sinckler, knowing that he will be talking to an under-educated and naïve audience today will set about to ‘TRICK’ them into believing that he has balanced the Budget and Barbados is on the road to recovery.

    Like

  21. David May 30, 2017 at 1:59 PM #

    Will we see former Gov Worrell offering a critique of the budget on his website?

    Like

  22. Vincent Haynes May 30, 2017 at 2:05 PM #

    David

    I have no doubts on that.

    Like

  23. Bernard Codrington. May 30, 2017 at 2:19 PM #

    @ David at 1 :59 PM

    Do you think that that would be a fit and proper thing to do ?

    Like

  24. David May 30, 2017 at 2:54 PM #

    @Bernard

    He probably signed an NDA anyway so all is academic. If he didn’t he will in good Bajan tradition extend professional courtesy.

    Like

  25. Bernard Codrington. May 30, 2017 at 3:14 PM #

    @ David

    I am reasonably sure that he will live up to our expectations. He belongs to the elite class( my definition).

    Like

  26. Carson C. Cadogan May 30, 2017 at 3:55 PM #

    THE ELECTORAL AND BOUNDARIES COMMISSION has advised the public that registration services will resume at centres in each constituency from Tuesday, June 6.

    Services will be available once per week from 4:30 to 6 p.m. Among the services offered are first-time registration, changes to registration and replacing a new identification card.

    Make sure that you are on the voters list and that your information is correct.

    That is the only way you can vote at the next general elections and keep out the crooked Barbados Labour Party.

    Those on this blog writing from Timbuku will not be able to participate no matter how much gibberish they write on BU.

    Like

  27. William Skinner May 30, 2017 at 3:57 PM #

    @ Hal
    You are a bit late. The major rum brand Mount Gay is already in the hands of a major international conglomerate, I think Remy Martin.

    Like

  28. David May 30, 2017 at 4:00 PM #

    You should add that the inputs to the rum are not 100% local.

    Like

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