The recent evaluations of the Barbadian economy by Moody’s and Standard & Poor’s, has focused our minds on the economic outlook for all of us. While I am an optimist by nature I have long thought that the global economy was not as resilient as some have claimed and that the excesses of social spending in the United States and Europe were coming home to roost with a vengeance.
Consequently, the outlook for Barbados was much more dire than was predicted by Government ministers as well as many in the business community who saw the global recession as a passing cloud. The cloud has proved to be depression with the potential to develop into and economic hurricane. Unfortunately, government’s policies seem to have seeded the darkening clouds and intensified the crisis.
To add fuel to the raging storm, the rapid expansion of the deficit in Barbados over the past two years, places us in an increasingly precarious position. With minor variations, our deficit spending has been remarkably consistent for the past three and a half decades. The past two years has seen a dramatic shift however, with the deficit widening at an alarming rate. A rate that exceeds the deficit expansion that took place in the last years of the Sandiford administration in the early 1990’s or as a result of the attack on the United States by Al Qaeda in 2001.
To compound matters, the increased deficit spending has resulted in an unwarranted expansion of government and other activities that add little to our capacity to expand production and increase foreign exchange earnings. In other words it seems as though expenditure has been driven by politically expedient objectives that have little to do with strengthening the economy and everything about hopes for a reelection.
A prime example is the introduction of the constituency councils that are designed to raise the barrier to entry for any new comers seeking to represent their constituencies in Parliament. They add no value and use scarce financial resources.
It is time for the government to get serious about cutting expenditure and waste. We can no longer afford to pay high level civil servants to do nothing at their desks but eat lunch and chat on the phone with friends or play computer games. This does not mean that there are not highly skilled and dedicated individuals in the public service that are self motivated and work inordinately long hours serving our country. Unfortunately they are very much in the minority and it has become a classic case of 20 percent of the people doing 80 percent of the work. That is an unsustainable state of affairs.
The evidence that we are in a serious financial crisis is before our eyes each and every day and the general public understands this very well. Many did not need the rating agencies to tell us what we knew even though it came as a surprise to the Minister of Finance.
Construction projects are shelved and delayed; companies are taking longer and longer to pay their bills; corporate receivables are mounting and ageing; inventories are being depleted as evidenced by the growing unavailability of products on a regular basis and employees are being laid off or working short hours in the private sector.
The housewives of this country could teach the minister of finance a thing or two about cutting and contriving as the twin pincers of punitive tax measures and escalating prices adversely impact their family’s disposable income to support a bloated government.
It is time for government to set the example, clean the Aegean Stables and to cut the nonproductive activities of the public service starting with a reduction in the size of the Cabinet. The growing deficit is the greatest danger to our economy and to the quality of life of all Barbadians. I hope that the forthcoming budget will indicate that the minister of finance has come to recognize this and is prepared to do something about it.
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