Barbados Economic Agenda For The Present But The FUTURE Untold
Prime Minister David Thompson like President Barrack Obama has adopted a PEOPLE oriented style, some describe it as populous. After one year in office he has had more interactions with the media than his predecessors; with a promise of more to come. Time will tell if the frequency of the interactions will wane as the global financial pressures continue to spiral.
Although conceding that the Prime Minister has performed well in the interactions so far, we believe that there is a debate which our PEOPLE, media et al have failed to persuade the Prime Minister to engage. It is said that behind every dark cloud is a silver lining, the economists and financial analysts speak to opportunities to be grasped during economic downturns. While we understand the defensive economic strategies which the government is currently mobilizing, the big void appears to be the incoherent vision of Prime Minister Thompson on how he plans to reposition the Barbados economy for the future.
In the few and brief explanations about his government’s economic plans for Barbados, Prime Minister Thompson predictably outlined the challenges which the interconnectivity of world economies have wrought on the world. An arrangement which is known as Globalization. We thought there was the opportunity for the journalists present at the recent press conference to probe the government’s economic agenda more fully.
The line of argument which has not been explored in the Barbados space has been what is call The Complexity Theory. In a nutshell it agrees with the fact that world economies have become interconnected but adds a caveat… “Complexity Theory argues that societies become progressively more unstable and vulnerable as the network of interconnections within them increases — not particularly good news for a globalizing system in which increasing complexity is precisely the thrust of economics, finance, manufacturing, technology and almost everything else we do.”
The interconnectivity of the world’s economies has precipitated as we all are witnessing a meltdown of an unprecedented scale. The fact that it originated in the US bears-out a key point of Complexity Theory. The point we are making is highlighted by asking the question: What if the US economy does not recover in the near future? The foreboding question is what if it does not ever recover?
The underpinning driver of globalization is free trade. Long gone are the days when trade was defined as excess goods and services traded to other countries based on price and relationships. Long gone are also the days when developing countries benefited from quota agreements and grants in full recognition by the developed world that they would always be able to more efficiently organize and allocate resources (factors of production). Barbados has joined other developing countries forced to signoff on economic partnership agreements and similar agreements. Agreements which will ultimately solidify the stranglehold which developed countries have on the developing given their comparative advantage in the production of goods and services. These goods are exported to the developing world in volume which have the affect of decimating the indigenous industries and making us fully dependent.
President Barrack Obama has entered office promising hope. Countries like Barbados which continue to pursue traditional policies will pray fervently that he is successful given the USA’s influence on the world’s economies. It is interesting if not not providing hope that 40 year old Peter R. Orszag, Obama’s Budget Director headed the consultancy firm which advised the Central Bank of Iceland before it went bankrupt. Iceland up to that point was considered one of the world’s successful and model countries. He also was advisor to the Russian finance ministry in the 90’s at a time of rampant financial malfeasance.
This is an attempt to provide a reality check for the BU family and to provoke the query, what if?
If we persuade ourselves to examine the dark side of the global economic disaster some may find the position of Dmitry Orlov a most troubling exercise. In a nutshell he is a proponent of the comparative theory of superpower collapse. In the same way the superpower Soviet Union collapsed in the mid-90’s, he is of the few that the drastic drop in crude prices will precipitate a similar occurrence for the USA. Many in the BU family must be asking by now why are we painting a picture of gloom and doom? Unfortunately this is another view which is a real outcome and one which our leaders must be cognizant.
Don’t despair, Orlov suggests that as a country and region we should focus on the logistics of efficiently delivering Food, Shelter, Transportation and Security.
Part II to come!