For more than two years the world has been experiencing an economic crisis of epic proportions and despite hopeful prognostications developed through rose tinted glasses is seems as though we are not out of the woods by a long shot. Governments around the world are being forced to cut spending and to adjust their priorities as they seek methods to rekindle their flagging economies. To compound the problem the conflicts in Southwest Asia and the Middle East continue and severe natural disasters have disrupted economic activity and wrought tremendous devastation in Japan and the United States. The signs are not good.
At home, we are experiencing the impact of the global depression by denying the existence of economic gravity and adding punishing taxation while taking no action to control the cost of government and rein in expenditures. Added to this, is the confusion of information that arises out of the conflicting statements made about economic growth or decline by the Central Bank and the statistical department.
Meanwhile, ordinary Barbadian families are in no doubt about their own situation as rising fuel and electricity cost, galloping food prices and increased taxes forces them to economize and cut back severely on discretionary spending and to dip into savings to meet essential payments. Individuals directly involved in the hospitality industry report reduced earnings. Hotel workers, restaurant waiters, red cap porters and taxi drivers all indicate reduced income and the hotel sector indicates that some may well shut their doors.
Small business operators such as vegetable stall owners, coconut vendors, fishermen and shopkeepers all speak of declining sales as people become more careful with their money and cut their consumption. Based on the evidence on the ground it seems as though the statistical department has it right.
Amidst all this confusion, the government announces one grand scheme after another without any indication of how they are to be funded. Yesterday was the last day of April when the Four Seasons Paradise Beach construction was supposed to have been restarted. Apparently it was but an April fool’s joke as yet another one of the countless deadlines for restarting this project has passed and the first new brick yet to be laid.
St. Lucy billion dollar project; the deep water harbor expansion; the Bay Street marina and the St. John Polyclinic all announced and all invisible to the naked eye. Is it all talk and no action?
Since the recent Estimates of Expenditure were laid in Parliament the price of oil has moved from $90 a barrel to $115 presaging another cascade of price increases. The US economic estimates of growth have been downgraded to an anemic 1.8% in the last quarter and inflation has jumped in the EU zone while the European Commission’s economic sentiment indicator has experienced a sharp drop.
Perhaps, the Minister of Finance might consider reducing government’s expenditure in light of the global economic realities and the absence of growth in the local economy. Certainly it is the prudent thing to do.
Then there is that 900 pound gorilla sitting in the corner of the room, CLICO.
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