Introduction:
In a moment of euphoric celebration, the Opposition BLP published a 15-point plan which it hopes will be a roadmap to power when the DLP Government finally decides to call a general election. It appears as if the BLP is so confident that the ruling DLP is destined to lose power whenever the general election is called, that it has decided to break with all conventional orthodoxies by publishing the fifteen key points, which presumably will be the centre of its manifesto. What makes this so surprising is that although former prime minister Owen Arthur is not considered an intellectual, he is widely regarded as one of the most astute political tactician of his generation.
Conventionally, opposition parties hold their powder dry, especially if the ruling party is digging a hole for itself through gross mis-management of the economy, preferring to maintain a ‘negative’ strategy – pointing out the weaknesses in government policy and reminding the electorate that had they been in power they would not have introduced such the policy being criticised. In such circumstances, one thing is clear, after nearly five years in power, the DLP government is still at sea, with some key advisers, who ought to know better, supporting its ineffective policies apparently purely out of self-interest.
Social and Health Policy:
If the BLP wanted to register the success of its conference, it is clear it should have avoided announcing any economic policies before taking power, on the grounds that until it had seen the books, the secret agreements the government had signed – such as the huge number or guarantees and loans the government has undertaken, such as the scandalous Four Seasons and the proposals for a Bds$800m new hospital, when what is badly needed is a proper public health programme and greater efficiency and bedside care at the QE Hospital.
But it could have telegraphed some of its social programmes, including health and social justice. but to propose a private health insurance policy is not only weird, but totally out of sync with the real needs of ordinary Barbadians.
First, a private health system is not the responsibility of government; that is a development for the private sector and the wealthy and middle class clients who think such an extravagant system would satisfy their health care needs. It is also bad policy in other ways. Two broad potential developments make this proposal untenable: although it may satisfy a need for the middle classes and the high net-worth West Cost residents, the reality is that in accident and emergencies patients would still have to fall back on the QE Hospital, or whatever replaces it.
At present we have a system in which ordinary people opt to enter the QEH as private patients because they are terrified of the way patients are treated in public wards. Further, not only is there a scandal of publicly contracted doctors ignoring public patients and stealing away to run their private practices, they even admit their patients to the QEH, where they are given preferential treatment. This is a problem that must be resolved.
In short, a future BLP government would face the moral hazard of ordinary tax payers subsidising middle class health care. This would be unacceptable.
The other major objection is that what is really now urgently needed is a comprehensive public health policy, covering ordinary people from the cradle to the grave. There are other short-comings with the 15-point plan. For one, the Opposition could have published a strategy for resolving the dog fight in the police, with the scandal of those who feel they have a ‘right’ to promotion challenging the authority of the commissioner in the courts being read the riot act.
We have the scandal of the meltdown in the education system – the future of our nation – with a trade union behaving like organised gangsters threatening that heads who refuse to bow to their diktats should be dismissed. Our planning laws are in chaos, with a series of micro decisions which, when aggregated, expose the lack of a national planning or land use programme. There is urgent need to resolve this crisis, including the attachment of conditionality to the massive building programme on the West Coast – in both the US and Britain a 20 per cent conditionality clause has been supported by all parties.
Section 106 of the UK’s 1990 Town and Country Planning Act, gives authorities the power to impose trade offs on property developers. We need a similar policy for the multi-million dollar West Coast developers.
Fiscal and Monetary Policy:
The BLP’s proposal to reduce VAT, the sales tax, from the present 17.5 per cent back to 15 per cent is fiscal suicide. In fact there is a very strong case for increasing VAT to 20 per cent while at the same time reducing income tax. In this way, ordinary workers would have more money in their pockets, while casual and imprudent spending would be heavily taxed, thereby encouraging people to save more. Such a policy, however, would also mean challenging the foreign-owned banks that are sitting on piles of cash and simply repatriating it back to Port of Spain and Toronto, leaving Barbadian households and businesses short of much-needed cash. This lack of financialisation is the real reason why Barbados is anchored in deep recession five years after the global banking crisis with no credible way out.
On this, critics such as central bank governor Dr DeLisle Worrell are right, although the reasons they have given – preserving foreign reserves – is wide of the mark. The obsession with foreign reserve is not rooted in sound macro-economics, but has become over the years a kind of religious mantra for orthodox economists who are too tired to think beyond the conventional intellectual parameters. With reserves of over Bds$1bn, the country is unnecessarily stock-piling cash for an eventuality that may never happen. It is unlikely that Barbados will face a crisis of a shortage of essential commodities which would leave us starving; and, almost as unlikely, we would be isolated by an outbreak of Sars, or bird flu, or whatever pandemic that reserves are meant to hedge against. But by definition, we cannot gamble on the security of our country, but a Bds$500m reserve hedge would be more than adequate. Such a policy would create an immediate pot of over $500m which could be used to kick-start job creation in the small and medium enterprise sector.
Monetary policy should be driven by employment, and at the heart of this, as it is in every democratic nation in the world, is the creation of small and medium enterprises supported by a strong social enterprise sector, with the public sector acting as a safety net. In fact, Dr Worrell’s criticism – supported by the executive chairman of Four Seasons – shows quite clearly the political risk opposition parties runs when publishing their policy programme in the build up to a general election, apart from the manifesto, which should only be made public after the election date has been announced. By being selective with what it published, the ruling party and other rivals are an open sesame to launch counter attacks.
In the BLP’s case, the elephant in the room: the misguided decision to sell-off the Barbados National Bank (then astonishingly take a minority stake), leaving the business sector without any locally domiciled debt capital market. One of the first things people learn in financial economics is that without a well-funded debt capital market local businesses will be at the mercy of the retail banks for funding. And, if those banks are branches or wholly-owned subsidiaries of regional or North American banks, key lending decisions will not be made by local managers who know the local business environment, but in Port of Spain and Toronto.
Constitutional Change:
The other surprise revealing by the BLP is that of promised constitutional change. Although the constitution needs a radical overhaul, I am not sure if the Opposition had any intention of taking it down to the wire. If it does, it must first abandon the nonsense that the law-making and parliamentary systems in Barbados are based on the Westminster/Whitehall models.
Anyone even vaguely familiar with contemporary Westminster/Whitehall will find this claim comical. What is true is that from the founding of the House of Assembly, up until even the 1980s, this claim was broadly true, but times have changed. Constitutional change should start, not with the distraction of having a governor general or president, but with the constitutional role of the Senate. Rather than being a nursery for the elected lower house, the Senate should be a powerful review chamber, with one-off appointments for a seven-year term; members should be appointed for their expertise and experience and be independent, rather than as voting fodder for political parties. In this way, when bills come from the lower house they will be thoroughly scrutinised rather than having Senators voting along party lines.
The other area for great constitutional review is that of Caricom/CSME, which in theory is a much-needed vehicle for regional unity, but the present institution is just not working. Then there is the question of immigration from non-Caricom countries and the demographic changes this poses for the country.
Alternative Policy:
The BLP’s 15-point proposal does not include the much-needed credible programme for job creation, approaches for fixing some of the many dysfunctional national institutions – the police, education system, et al – nothing about the unfairness of the fiscal transfer imbedded in the system, which has led to ordinary Barbadians, many of them living in hovels or over-crowded homes, subsidising the multi-million dollar homes of foreign millionaires living on the West Coast and the institutionalisation of tax evasion. In fact, on the contrary, many of the proposals in the 15-point plan will further drill down the historic inequalities which have, for hundreds of years, left huge sectors of society alienated from the many opportunities which are sometimes available.
Ten good alternative strategies would have been: reversing the catastrophe of selling BNB; launching a criminal investigation in to the collapse of Clico; reform of the civil service; reforming the educational sector, from pre-school to university, including a new funding arrangement for the UWI; lower the age of majority to 16; raising the school-leaving age to 18; abolish the Defence Force; launch a Sovereign Wealth Fund; introduce a form of national service; and, introduce a compulsory long-term saving scheme.
Analysis and Conclusion:
In the final analysis, the forthcoming general election was always the BLP’s to lose; all it had to do was to show unity, which it is doing with the love-in between Mia Mottley and the Mr Arthur, keep its powder dry, and just keep exposing the flaws in DLP policy. It could have done all this without revealing details of its likely economic and social policies. However, having decided to make public its thoughts on policy, the BLP could have said made a bolder statement by promising to freeze the salaries of members of parliament within twenty-four hours of coming to power, not just for a single parliamentary session, but for a full term. That simple device would have sent a nationwide message that the trough had been taken away, that the gravy train had hit the buffer; that it is belt-tightening all round.
The Opposition could also have promised exactly what the Irish government did by entering early talks with the unions about freezing public sector pay and imposing a moratorium on recruitment. As things stand, the general election is still up for grabs.
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