Amber Alert “The negative outlook on Barbados reflects the growing imbalances that the inconsistent fiscal and monetary policy mix has caused.” – Olga Kalinina, Standard & Poor’s Economist
In our view this is the most damning criticism of David Thompson’s performance as Minister of Finance since he assumed that office some sixteen months ago. If ever there was a vote of no confidence in Thompson’s ability to manage our economy, this is it. We are not surprised, because it is a criticism that our leader Mia Mottley has made of him without apology. She knows the importance of consistency in maintaining confidence in the Barbados economy.
No amount of sugar coating that the region is under fallout stress from the global economic downturn and that Barbados is not unlike other countries whose ratings have dropped can negate the full import of Ms. Kalinina’s words. The Barbados Labour Party has warned repeatedly of a government adrift and unsure of which path to take; of a government that waits far too long to take even reactionary decisions, much less pre-emptive or proactive ones. The Prime Minister’s ‘wait and see’ approach to economic management singles him out as a ditherer that the country cannot afford in these trying times. And what are these inconsistent policies of which Ms. Kalinina speaks?
Balanced budgets or deficits or both as the DLP prclaimed. Subsidies, no subsidies – yes subsidies! The government committed itself to a balanced budget and imposed the single greatest tax imposition on Barbadians in our economic history. This was done against a background of rising oil prices, which in his misguided wisdom the Prime Minister passed on to the productive sectors and the average Barbadian. Miss Mottley’s opposition to this policy has been well documented. With the implosion of the global financial markets, the Prime Minister’s response was to organize an economic talk shop two months after the Lehman Brothers collapsed.
This report is yet to be published, although he has commented on it as being a mid-term strategy. So back to the ‘wait and see’ stance. Then there was much ‘too and fro’ about whether we had or should have a stimulus package. School fences and a highway improvement project already on the cards were cited as evidence of such, amidst much continued ambivalence by the Prime Minister as to whether this was the course we should take. Under pressure to explain the fall in foreign reserves and the unrealistic revenue estimates contained in this year’s Estimates, the Prime Minister and Minister of Finance decided that he had in fact implemented a stimulus package.
Both Mia Mottley and Owen Arthur said then that the time for stimulus packages had already passed and that the failure to implement them sooner – now meant that we should be engaging in defensive measures and that a stabilization package is what is now required. We shall observe with keen interest whether such a package is contained in the Prime Minister’s Budget. While no country enjoys a downward adjustment of it’s rating or even its outlook, if there is a clear plan to implement measures that may lead to a downgrade, but yield improved results in the short and medium term results, then Ministers of Finance view them as a necessary evil.
When however, there is no plan or an inconsistent plan, then the chance of improvement becomes more remote as does an upward revision of the outlook. This is the unfortunate position in which we find ourselves today. The Prime Minister has no clear strategy for protecting the Barbados economy and no policies to ensure its growth. There is an awful sense of déjà vu hanging in the air.
Would it be too much to hope for – that the Prime Minister relieve himself of the Finance portfolio and save us all the certain hardship we shall face by his present insistence that he knows what he is doing?
2 responses so far ↓
Telma White // April 17, 2009 at 12:26 am |
Some thing is wrong here. Its either is a case of barbadians not fully engage with these developments in our economy or they simply are uninterested and buying into the DLP line that its the global financial issues of the north thats causing all the dlp chanlleges.
Either way , there is some type of lassire attitude about in some parts of the population.
The dlp did a super job on planting a dirty stain in the minds of the electorate on the last BLP goverment , by turning all of the BLP sucesses against it.
The wicket DLP presented all the fine achivements in Barbados new and up graded infrustructure and sustain economic growth as base totally in corruption.
They picked hard wood housing company as they model and drove they switisted game into the minds of the electorate.
IT worked
and by only 8964 votes nationally manages to take a good goverment out of the hands of barbadians and put them self in there.
One conclusion which can be drawn is that mabe some barbadians have developed a soap opra mind set, and found comfort in believing these dlp tall tales, hooked on scandal and slander
yes tall tales
All of thompson call for Forsenic Investigation into UDC, RDC, the Hardwood andthe Barbados Water Authority has beared WHAT?
ZERO. This is the prime example of how the dlp won the government.
THEY talked Crap, they plainted of ripe mismanagement , and mis guidle the public in to believing what they called cost over run as evidence of corruption and won and by some 8964 votes over all nationally they won.
what the public did not know or wanted to know or were failed to be told was that the cost of key materical compounds for these projects ,i.e steel,cement, oil( for both transport and manufacting) when up between the times of the orginal commenment dates and the election time.
that message should have beeen comunicated more effectively to the masses
Now they are claiming things they we started as theirs.
example the Empire Threate.
It one was to check in of the BLP 2008 manifesto PAGE 24 UNDER THE SECTION ENTERTAINMENT your will see that the Empire Threate and daphine Hacket threate were both ear-mark for up grade
Holetown beach Reclaim project was also in the BLP MANIFESTO on PAGE 37under the heading ” beaches Coastal protection.
And last of all and most popular with this DUMB government is housing
Projects like March field and Work Hall St.Philip were long already in the building stages ( references to roads and piping) before the DLP took over and claim it
I just think folks who want to know the time just need to look into the blp 2008 manifesto to see just what they missed out on.
I am also amazed too that no local economists have made no follow up commentary to Standards and Poor revised growth projections for barbados to negative
Some thing just got to be wrong that no one seem moved by the economic forcast assessements.
Telma // April 19, 2009 at 6:01 pm |
It is good news to hear form the Central Bank Governor of Barbados That our economy is not in crisis and that our finical system is sound.
Thats good news to the ear.
Now based on these statements, IT IS CLEAR that the finanical policys and instititional structure put in place by the BLP have help maintain this postion as articulated by the Central Bank Governor, and it make to any claim by this DLP goverment, that they have to make hard choice because the barbados economy in going througth ” what David Thompson like to say or describe as “TOUGH economic times” for this country as qusetionable.
Like Mia Mottley was making the point that the government has the capacity to sheild barbadian form the finanical issuse up north.
The (G.C.B) i.e Governor of the Central Bank was spot on in the assesment of the finaincal system buffer here.
The comparsion of 2009 Barbados economic outlook to the mid 2000s economic preformance under a Triple B rating form Standard and Poor’s, might need to be examin in light in the present of for factor which were opposite to what is happening now
1. There is evidence to support the realiszation that Direct Foriegn INVESTMENTinto barbados has decline below those number seen in the mid 2000s when the BLP was in power. The pause in some hotel project can be seen as an exam
2.The reciepts form Tourisim are not to the levels expirences in previous years referred to by the G.C.B , thus the government will expirence some short fall in revenue this year and if the job market recovery in the Northern countries dose not pick as fast before the end of summer, then it will also have a negetive impact on our next up comming winters season 2009 to 2010, in terms of booking and visits.
3. Corparation tax intake were not too the expect level of projection last year, it will just a guess to what the reciepts will look like for the new tax year 2009 -2010
4. The Construction sector has suffered a contraction.The Government projected public works proggrame will not be able to recover that level of activity with the present fiscal practice advocated by the Ministery of Finance
5. THE Unemployment level Has been on the rise since this Dlp goverment started fooling with the economy form April 2008.
These LISTED factors here , were all in the Green when the BLP was in power and help Facilate that 3% GROWTH PER YEAR UNDER A TRIPLE B rating form the Standard and Poor.
I do not beleive our present CENTRAL BANK GOVERNOR believes that any 3% growth is possiable under the present circumstances out lined here, or is there a believe that such growth is possilbe with the next 36 months per annual.