(Pt 2) Sat. 11th March 2017 – Barbados March of Disgust & Rally

Better could have been done and can be done in Barbados. A country that demonstrated the courage to make tough decisions in the past has fallen over the last eight years, as Prime Minister Stuart and his Cabinet avoided critical decision making at every stage. They obviously prefer to sweep the real issues under the carpet and to highlight mundane issues affecting the country, within a historical context.

A simple economic situation in 2008, when the country’s economic fundamentals were very solid, was badly handled. The conventional way of managing an economic recession, by using a fiscal stimulus was rejected for excessive taxation.

Clyde Mascoll,
22nd February 2017

The Barbados economy is now in a more precarious condition in 2017 than it was in 2009. The foreign reserves are less than half of what they were. The national debt is more than double what it was. The economy is smaller. The fiscal deficit is worse. The printing of money is scandalous. Poor policy choices are responsible for where we are as a country and not the international environment.

It never made sense to blame the international economy, on the one hand, and boost of tourism doing better, on the other hand. International tourists determine the performance of the local sector. And if the sector is experiencing record levels of arrivals, then the economies from which they are coming cannot be conveniently blamed for Barbados’ overall under-performance.

The elephant in the Cabinet room is lack of leadership. As far back as 2009/10, a home grown Medium-Term Fiscal Strategy was introduced to correct the fiscal accounts of the country. It was revised to no avail. Things have gotten worse. The rhetoric of the government never matched the objectives of the policies. It was a case of persistent fiscal betrayal and denial on the part of the government.

The evidence of the betrayal is seen in the state of Barbadian workers, who have not enjoyed a salary increase for years. The private sector that had to lay-off workers in the last quarter of 2016. A government that notwithstanding its fiscal crisis continues to say one thing publicly about spending, while increasing its spending. It continues to put its future first rather than the future of the country.

Apart from the obvious economic issues associated with the current impasse at the Central Bank, it raises the need for governance issues to be addressed. The fact that the bank prints money without having to seek the approval of parliament is an issue that needs to be corrected by legislation.

In 2008, the Central Bank held not one dollar in Government debt. In 2017, the bank holds in excess of $1.8 billion dollars of government debt. This holding of debt came from the printing of money.

It makes no sense, going forward, for the Parliament of Barbados to approve the spending of money by way of the annual Appropriation Bill, while the Central Bank is accommodating the spending of Government by printing money that the same Parliament has not approved.

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