Introduction:
In our democracy, politicians have the simple task of collectively being rainmakers, they simply bring talent together and, from that collection of outstanding individual instrumentalists, create a harmonic sound. Times of crisis call for innovative thinking, experimenting with new ideas, adopting what we in Britain call the Dunkirk spirit.
It is at historic points in the development of capitalism such as this that we see the best of what we have to offer, when the creators of new and imaginative ideas come to the fore, when those who have the future of Barbados at heart rise up.
With the sudden announcement of the general election, which gave off a smell of panic, we as a nation have had to sit and watch the humiliating nonsense of our leading politicians and the two rival parties, launching in to a campaign without manifestos, the roadmaps to their policies, for the first week or so. They were travelling up and down the country, talking themselves silly, without a detailed, or even outline, of the policies they hoped to introduce if the people of Barbados returned them to power. In other words, we have had a government which, after five years in power, could not come to voters with the simple message that they should be returned to finish off what they had started. Maybe, there were five wasted years and they could not ask people to vote for a non-existent unfinished programme.
Equally, the Opposition apparently failed to ask the electorate to vote for them on the basis of a programme for dynamic change if elected. It is not as if they did not expect a general election to be called, since the cacophony of political noise was about when the prime minister was going to announce the day; so, to be caught flat-footed as an Opposition party when carelessness, and to fail to wrong-foot the Opposition was an example of political incompetence. For ordinary Barbadians, this general election should be transformative, a roadmap for the New Barbados.
Failure of Government:
The brutal truth is that the DLP came to power unexpectedly and, in a moment of madness, started giving away public housing, a pay increase to public sector workers which bordered on insanity and, after nearly a year in power, has delivered a medium-term strategy paper that, in the main, the party proceeded to ignore.
To be fair, the DLP government was handed a flawed baton, after fourteen years of BLP rule, but it clearly had no ideas of its own, no political or economic imagination, to take Barbados out of the mess it had found itself in. Had not for his premature death, things might had been different under David Thompson’s leadership as he had been talking to a number of key people about policy formation and it would be unfair to question his intentions.
However, policy aside, the DLP lacked the will to tackle the embedded structural problems that, unless they are sorted out, will outfox any government of any colour. Added to that is the lack of a clear direction on monetary policy. Has the central bank got responsibility for monetary policy? If so, this is not clear from the Central Bank Act nor has it been made clear in practice. This needs to be clarified.
While it is true the DLP inherited massive current account and public sector deficits, all they did was to build on it to such an extent that it was clear they were like a paddling for survival. They allowed the governor of the central bank to amass a massive pile of foreign reserves, which sat there not working; they defaulted on their debt: Mr Barrack (Bds$70m, plus growing interest), the University of the West Indies ($180m), local business people ($50) and more.
It poured scorn on the ratings agencies when they downgraded the nation’s credit rating, retreating in to an old Barbadian arrogance rather than look at the issues rationally; then we ended up with two government departments arguing over the number of unemployed.
Then other key institutions started to collapse as government lost its bearings: education, criminal justice, the administration of justice, a housing crisis, the collapse of the hotel sector, to name but a few. The other major failure of government policymaking is the economic one of putting growth as the major instrument of poverty reduction, improvement in life expectancy and overall prosperity.
As the Nordic model has shown, and as has been mentioned on numerous occasions in my Notes, the treat to the social order is the major social threat facing Barbados. Getting the young people on the block, and in particular young men age between 16-24, many of whom have never had a formal job since leaving school, is the ticking social time bomb facing the nation.
The myth is that the wealthy white community and the black middle classes, with their hand guns (and even sub-machines), backed by an over-keen police force with so-called task forces and specialist squads, and a Defence Force that spends more time patrolling West Coast beaches than it does defending ordinary Barbadians, will control any social uprising.
Programme for Change:
The most important message of change must come from all new elected members of parliament that they will freeze their salaries for the entire duration of the new parliament, abolish the over-generous pension provision and replace it with a one-off resettlement payment. This will send a clear message that the New Normal will also impact the protected lives of politicians.
Then, the new government must spell out within its first 100 days – the honeymoon period – a detailed programme for change. As I have said before, the chorus coming out of the central bank and the ministry of finance that the economic mess Barbados is in is caused by the global banking crisis and the following recession is misleading. They are being economical with the truth. If they are looking for ideas, how about these (both long and medium term):
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turning Barbados in to the health and education centre of the English-speaking Caribbean with a range of schools from prep to centre university;
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a new property tax on super-homes;
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tax expatriates on their global earnings;
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introduce an inheritance tax;
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increase vehicle road tax;
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rebuild the centre of town, with court yards and youth centres;
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introduce a congestion charge for vehicles coming in to the city during the rush hour;
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Set up a rum making institute, as part of the community college;
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Introduce a new higher rate income tax of 60 per cent for those earning more than $200000 a year;
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Tax corporates on their Barbados revenue, rather than declared profits;
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Abolish the Defence Force and expand the uniformed police;
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Introduce a hypothecated health budget and ring-fence the national insurance scheme;
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Create a Barbados domiciled retail bank;
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Introducing compulsory long-term savings;
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A nationwide house building programme, both private and socials;
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programme that within ten years 70 per cent of household electricity must come from solar, wind or wave energy;
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Establish a food security agency;
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Upgrade the hospital, introduce new contracts for doctors and focus health care policy on the community;
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A network of leisure centres;
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Build a dry ski slope in the Scotland District;
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Reform the planning system;
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Create a dynamic small business centre;
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Make all entry level public sector jobs a job-share for 16-24 yr olds;
These are just some examples off the top of my head to emphasise that politicians have a lot to talk about on the campaign.
Analysis and Conclusion:
The DLP government failed because it was not persuasive or focused, had not worked out a programme for government and, having been in government, was too stubborn to take good advice. In the end, their stewardship of the economy has been marked by stagnant growth, or more truthfully deepening recession (technically two consecutive quarters of negative growth) that signals that austerity and falling living standards will be here for years. For it is clear that no matter what the official figures say, real median wages must be lower than they were in January 2008, with public sector wage increases driving up the average. Again, whatever the official figures say, the real numbers for unemployed and underemployed, especially for the 16-24 yr olds, the real figure must be bordering 25 per cent – wasted human talent which a small nation can ill afford.
So, whatever politicians may say on the hustings, there is a lot to talk about over and above personal abuse and peddling slogans. The expensively educated technocrats are also to blame. Quite often they promise more than they can deliver. Without getting technical, the central bank has not made public its key methodologies, including its use of dynamic stochastic general equilibrium, so it is very difficult to analyse its models, so in the main, one has to take the central bank’s assumption as given – or not. I do not. That aside, neither the minister of finance, who was quite clearly out of his depth, nor his key advisers, had any solution to how to stimulate the economy without expanding public sector debt.
In the final analysis, the issuance of government bonds were a case of smoke and mirrors, although it has now become key government method of raising money. As I have warned before, there is a strong likelihood that government would default on its gilt obligations, afterall it has done so with Barrack, the UWI and others.
While DLP spokespeople have been good at sloganising they have not shown any backbone for making tough decisions. This is a time for bold and courageous decisions by an electorate, many of whom have been unemployed for a number of years, and even many of those in jobs are just one or two pay days away from having their homes repossessed by the banks.
This is the importance of this general election.
The blogmaster invites you to join the discussion.