Forte: Anticipation for what Gov’t will reveal given global uncertainties

Monday’s budget is a critical opportunity for the Mia Mottley administration to set out how it intends to put Barbados on a firm footing to grow, prosper and develop, says Barbadian economist based in Canada Carlos Forte.

Outlining a slew of questions Government must answer to demonstrate how it will improve the lives of Barbadians in the short-term and help them to reach their aspirations in the medium to long-term, he identified relief from the increasing cost of living and straight answers on the country’s growth prospects among the key areas.

“How will the Government propose to provide relief from the surging cost of living that has been buffeting the country since June last year? Will the government finally deliver on its promise to cap the taxes on gas at the pump so as to ensure that despite rising oil prices internationally, gas in Barbados does not rise to above $4 per litre? Bear in mind that the combination of excise taxes, the fuel tax and VAT account for almost 30 per cent of the cost of gas at the pump in Barbados,” he said.

Forte suggested that to further cushion the blow of rising prices, Government should follow through on stated intentions to reduce the import duties and Value Added Tax (VAT) on the freight component of imported goods.

He would also like to hear whether farmers will get any relief on their water bills, and a clear timetable for implementation on Government’s manifesto pledge to reduce land tax.

Apart from matters related to the cost of living, the economist suggests Barbadians will want to know whether the country will experience economic and job growth this year.

“Is the government still expecting the double-digit growth that the Central Bank predicted a few weeks ago? Will any of the various previously announced public and private sector infrastructure projects get going this year? When are they expected to begin?

“What will be the Government’s economic growth strategy? What will be the Government’s post-COVID economic recovery plan? How does Barbados live with COVID responsibly, grow the economy and create jobs?” he asked.

Forte added that Prime Minister Mottley must be forthcoming about a possible extension of its International Monetary Fund (IMF) programme when it expires later this year and the implications of either exiting or extending the agreement.

He said Barbadians should know whether they can expect further belt-tightening in order for Government to achieve its ambitious fiscal consolidation targets under the IMF programme.

“Economists know, and the IMF has stated, that over the next four years Barbados must make up for the progress lost in running primary fiscal surpluses that are sufficiently large to aid in reducing the country’s huge debt burden. How will Monday’s Budget address these competing imperatives of economic growth, relief from surging prices, debt reduction, and the perennial need for housing? These are but some of the prescriptions that we can expect from Monday’s Budget presentation,” the Commonwealth scholar said.

Forte welcomed the decision to deliver a Budget address, the first in two years, suggesting there is much anticipation around the financial package given the uncertain global environment.

He insisted that Barbadians have always looked forward to a Budget to provide certainty about what they should expect about their prospects of improving their economic and social wellbeing over the course of the 12 to 18 months to follow.

“For years, they would anticipate what they could expect in terms of jobs, tax relief, housing, improvements in the delivery and access to health care, better public transport, education and, of course, opportunities for themselves and their children. In short, Bajans look to a Budget to identify how the government will assist in helping them to realise their aspirations. Jamaicans, Grenadians, Canadians, Australians, and the British are no different,” he told Barbados TODAY.

In a statement issued on Wednesday from the Office of the Prime Minister, it was announced that Barbadians can expect to hear what actions Government will implement to spur economic growth generally, create jobs and rejuvenate critical traditional sectors while incentivising emerging industries in areas such as renewable energy and the blue economy. sandydeane@barbadostoday.bb