It is no secret Barbadians are addicted to the conspicuous consumption lifestyle. We can debate why educated Barbadians – successive governments included – continue to ignore the the consequences of having champagne taste and mauby pockets – wantonly running budget deficits in the post Errol Barrow era is with us. We can no longer support ourselves UNLESS we borrow as a creative approach to ‘reprofiling debt’ or lobby to access concessionary and grant funding. The question we must ask is if such an approach is sustainable. At some point the country must reengineer the economic model to organically grow GDP to effectively earn enough to pay our bills (support our conspicuous consumption habit). In other words running budget surpluses must not be jettisoned for the lazy and fashionable budget deficit approach to managing our financial affairs.
Barbados is a service based economy with foreign revenue earnings mix over reliant on tourism supported by international business (IB) and foreign direct investment (FDI). It is fair to say there is a nexus between our three leading sectors, if tourism fails there is a negative earnings relationship with IB and FDI. The blogmaster is not harsh in the critique that the policies of the current Mottley administration do not inspire confidence that there is an aggressive approach to reorder the Barbados economy.
Globally, FDI inflows increased by 64% in 2021, reaching approximately $1.6 trillion dollars. As a destination for global investments, Latin America and the Caribbean saw its share decline, however, representing 9% of the total – one of the lowest proportions in the last ten years and far below the 14% recorded in 2013 and 2014.ECLAC Report
A UN report released this week by the ECLAC, a United Nations agency, indicates that although foreign direct investment in Latin America and the Caribbean rose by 40.7% in 2021, it has not returned to pre pandemic levels. Of significance is that the ECLAC report expanded its analysis by reporting that although FDI inflows increased globally by 64% in 2021, the LATAM and Caribbean share declined, “one of the lowest proportions in the last ten years and far below the 14% recorded in 2013 and 2014″. A negative trending in FDI does not bode well for Barbados and the Caribbean given our tourism based economies. We can life in hope that the negative trending can be reversed but it makes sense to prepare for the worse by weaning Barbados from sucking 24/7 on the tourism nipples.
A word to the [educated] should be sufficient.
See full UN Report