It is obvious the many prognostications on the rebound of the local economy from government, Governor Delisle Worrell and a few vocal local practitioners have reached a point where there is little credibility with the public. The cancelation of post economic review media briefings by the Central Bank of Barbados has been interpreted in many ways because there has been no official explanation from authorities. The decision therefore by the Central Bank to host a 15-part series on CBC TV8 and Voice of Barbados to be moderated by David Ellis to start on September 3, 2014 titled ‘The Barbados Economy: Consolidated and Growth Strategy A special Economic Discussion Forum is interesting. Panel participants will be Dr. Delisle Worrell, Tracey Shuffler, Andrew Brathwaite, Jewel Brathwaite. BU welcomes the Central Bank change in communication strategy because the media briefings had become uninformative and an embarrassment to the Fourth Estate. However the switch should have been more seamlessly implemented to avoid the political debate that followed which helped to politically polarised the country as well as to dent the reputation of the Central Bank..
BU will delay our judgement of the participants until we have a view of the series. The moderator has declared his friendship with Governor Worrell and this will place him under pressure (from BU for sure) to be supremely professional in his probing of the issues. Jewel Brathwaite, long time business editor of the pro government newspaper The Barbados Advocate, will be expected to exercise the highest journalistic ethics and standards for the same reasons. Andrew Brathwaite, an independent contractor and FTC Commissioners is a 50:50 player who has a chance to position himself as a true independent on the Barbados landscape and Tracey Shuffler head of the BCCI will be there to represent the interest of a peeved private sector.
At the end of the series BU expects the issues how Barbados got into the pickle it finds itself, both economically and socially, is lucidly discussed followed by the strategy to extricate and build a sustainable a growth path. So far we have failed in sensitizing Barbadians to the reality of what we are facing and therefore resultant behaviours have not fomented.
The issue of the IMF forecast for real GDP growth in the Caribbean in 2015 should guide expectations. It is no secret Barbados is listed as the least likely to grow among all countries in the region. The IMF is an entity Barbados trust to contract for technical assistance, why should its intelligence not be trusted as well regarding the management of the local economy articulated in the last Article IV Consultation report for Barbados. How long can the anaemic economic performance of Barbados continue before there is a stall/crash?
In the boom years Barbados managed a fiscal deficit that was obviously seen to be manageable up to 2007. However there was an alarming deterioration onwards with a ‘spike in 2011 and 2013. It is no secret the NIS and the Central Bank were used to significantly fund government spending in in the period 2008 to the present against the advice of the IMF. This is an important point because and overture to solicit IMF support will have as a requirement the demand for the Central Bank to stop funding government spending. BU is also mindful one of the reasons Prime Minister Stuart was advised to cut the public sector was the fact public sector debt to GDP is one of the highest in the region. The latest report records we are at 100 plus % and climbing when compared to 60 plus % in 2007. Regarding Barbados debt management a check of official reports reflect there has also been alarming growth in all debt categories in the period 2007 to present.
The Governor has been preaching if we protect our international reserves Barbados will be able to defend the currency peg. International reserves although adequate by the accepted standard, BU suggests in the last 3 years the condition has been bolstered by borrowing and sale of government (strategic) assets and NOT real growth. The decline in our major forex earner tourism is well documented. The government’s strategy of dampening demand for foreign exchange to safeguard declining international reserves has had adverse impact on the domestic economy heavily reliant on economic activity in the retail and distribution sectors. Barbadians fear an external ‘devaluation’ but government’s strategy supported by the Governor of the Central Bank has been to implement an internal devaluation strategy. Many will argue what is the difference between the two.
It should be evident even to the most ardent of government supporters if the economy continues to dive something will have to give. We hope at the end of the Central Bank series BU will not be forced to label it another failed PR exercise.
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