Submitted by Looking Glass
Fallacious diagnoses, especially those made by the morally suspect, beget fallacious remedies. Some politicians laden with infirmities see them as natural, even noble qualities. Like a beast of burden laden with deficits of the past they shift the burden to the other side. And so Lord Arthur, cackling with malignant pomposity, tells the Conference the present government mismanaged the public finance “on a scale without precedence… …one that will take an extraordinary effort to fix.” Among other things his government paid the bills, rescued the country from economic distress, and generated a surplus which the present regime turned into a deficit (Advocate 11/14/2010). Can a person or group of persons mismanage or control what wasn’t there? Comic books stupid without pretence make more sense.
In assessing economic performance we need to grasp historical facts. Without them the facts become distorted and biased. The national budget is forced into fiscal deception leaving us with a false picture. According to Barbados is Bankrupt (4/22/ 06) the national debt had risen from $2 to $4 billion. Elsewhere it was said that the debt had been “narrowed debt to 6% of GDP in 2006-2007”. If that were the case sustainability would not have been a problem. The IMF (2006) Report would not have projected debt at 75% of GDP by 2011, the 2008 Report would not have noted the “75% likelihood the debt ratio will exceed current levels,” and the 2009 recommendations would have been quite different. Substantial ongoing GDP decline and borrowing mega billions by the current regime would be required in order to increase the debt ratio from 6% to 75% in just three years.
Fiscal deficit does not address the total national debt (TND) which happens to include the sum total of “all-budget” loan guarantees and contingencies. In 2009 the regime’s share of the $64 bn TND amounted to no more than $3bn (Indebtedness: No End In Sight). Given our static economy it is unlikely the current debt (which will increase) can/will be retired in say twenty years. As was noted in Walking On Thin Air we will be looking at a large black mass sitting on the edge of serfdom.
That the country was a “royal mess” long before the global meltdown was a guarded secret. The IMF 2009 Report focused on the “impact of the global recession” options and priorities to “weather the crisis,” not the cause of our precarious state. The practice of borrowing to shore up reserves, treating the borrowed funds as revenue, spending it on largely non-income generating projects and borrowing again is evidence of both non-sustainability and incompetence (Economist and the Bank Report). Previous Central Bank reports made little or no mention of the debt or deficits and almost nothing about employment and revenue. According to an official the debt was not a problem…..The “island’s financial system and overall economy “were not in crisis.” (8/14/09) Little wonder the 2008 Report noted the “weakness in statistical information (and that) coverage and transparency of data on public service entities capital accounts transactions needed to be improved.”
Under Lord Arthur we witnessed an explosion of debt, fiscal deficits, corruption as never before and loss/privatization of our most valuable assets (Port, Airport and the National Bank). To date we are the only government in the world to dispose of its national bank. In keeping with ‘tradition’ the IMF 2006 Report endorsed the government “intention to further privatize tourism (Gems gone)…and identification of potential assets that could be divested in the near term (as well as )improvement in the buying and selling of real estate.” A more ambitious plan for adjustment and structural reform was recommended.
After 14 years they are no industrial accomplishments to serve as a basis for take off, no non-cyclical job generating industry, no purposeful additions to fuel the economy beyond the vagaries of tourism, without diversity innovation and production modes, without comparative advantage and no real surplus. The country was left more dependant and susceptible to external shock and definitely not self-sustaining.
The claim that he left a surplus is at best a bad joke. Something is radically wrong with a government in surplus who couldn’t pay pensions on time, keep the hospital stocked with penicillin, or repair the West Wing of Parliament which was paid for by an English company, and borrowed a billion plus to build the new non-income/job generating Law Courts. In real terms what he left was a devastating surplus of debt, huge fiscal and social deficits. The IMF 2006 Report noted the “lack of scope for development and vulnerability to external shocks,” and the need to “address macro-economic imbalances including a high level of public debt, large fiscal and external accounts deficits and declining international reserves” in order to achieve sustainability.
I have seen “all things that are done under the sun and behold all is vanity.” (Ecclesiastes) Fictitious accounting, write-off of loans to cronies and ‘Klico’ apart, values were leveraged and morality subordinated to personal wealth and vanity in the form of Swiss and other bank accounts, foreign properties, and major share-holdings under surrogate names in the local ‘Oil Company’…….Extreme vanity took the form of a chartered jet and champagne dinner for the top six to New York at a cost of I believe $30,000.00. The company had to threaten legal action to get paid.
Given the above it is heresy to even imply that the economy under Lord Arthur was not in crisis before the global meltdown, that he rescued the perishing, left a surplus and that the present regime pushed the country into deficits. True the economy was and is in prolong rock bottom regression, but the present regime in spite of its shortcomings cannot be held liable; and as stated elsewhere “cannot water the garden with an empty bucket.”
One cannot solve today’s problems with the solutions of yesteryear. A return to power of the man who, even today, advocates sale of the remaining BNB shares and who accommodated ‘Klico’ spells doom for the country. All was lost a few months ago when the man attempted to meet with visiting Royalty and was unceremoniously “escorted” away from the gate.
Things would have been quite different today had the late PM told the people exactly what he inherited and requested the UK to undertake a forensic study (Candles Under The BED). Certain foreign and other bank accounts would be in dire jeopardy, Lord Arthur would have gone into hiding and his party laid to rest. Restructuring and macro-economic imbalances would have been addressed and help underway.
We have neither guns nor butter with which to weather the storm. The greatest good the present PM could do for the people and the Party would be to have the UK, not a ‘local’ entity do the forensic study. Be assured they will be happy to oblige. It is not too late and about the only way left to save the black mass from servitude. But would he do it; or are they some things to be kept hidden?
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