#BTColumn – Monkeying with our economic landscape

Disclaimer: The views and opinions expressed by the author(s) do not represent the official position of Barbados TODAY.

by Ann Walcott

News of Chris Sinckler’s appointment as World Bank Advisor for Caribbean Affairs must make Bajans sit up and question everything we have been told about our economy.

We were told by then opposition leader (now Prime Minister) Mottley that Chris Sinckler’s policies were the cause of the economy’s collapse. This was the basis for the argument that her party be given the chance to implement new policies to rescue Barbados financially.

Now it seems the same person she claimed was responsible for ruining Barbados is in her estimation suitably qualified for a post at World Bank. It is either one, or the other – it cannot be both. A Minister of Finance accused of bankrupting our country cannot be a suitable appointee to represent the Caribbean at the World Bank.
So, was the Prime Minister telling the truth then, or is she being honest now?

Politicians will twist the truth and say whatever they deem to be to their political advantage so – there being no advantage in sending him to the World Bank at this time – I am inclined to think she is giving her honest opinion of his abilities now and was blaming him previously for the financial collapse only to win the election.

If Chris Sinckler is an able and experienced economist worthy of a World Bank posting, how come Barbados fared so badly under his direction? Or were there in fact other factors which affected our economic performance since the 2008 Financial Crisis and ensuing recessions, which were outside his control? If so, what were those factors and have they been addressed by the current administration?

I hold no brief for Chris Sinckler and believe that while there were factors coming out of the 2008 Financial Crisis and the International/American right-wing economic policies which led up to the crisis and prolonged the recession, Mr. Sinckler’s remedies, (particularly the 10 per cent NRSL) worsened the problem.

I voted in 2018 for the new Government, thinking there would be changes in policy, however what we got was a doubling down on the “trickle-down”, “shifting from direct to indirect taxes moreso” (Dr. Kevin Greenidge), transfer the tax burden to the lower end of the economy and give tax breaks to the top and big corporations “levelling the playing field” taxation policy which further reduced the disposable income of the majority of working people causing a drastic contraction in the local economy, while transferring money into the pockets of those who could afford to save, or spend it overseas, removing it from local circulation.

This contraction was multiplied by the Reaganomic “Gov’t is not the answer to the problem, Gov’t is the problem”, IMF “reduce the size of Gov’t”, termination of thousands of Public Sector workers, on top of those terminated by Chris Sinckler which has tripled down the damage to the majority economy of the country, vastly increased unemployment and destroyed morale and the smooth running of Government Departments leading to more disruption and delays in doing business even before COVID hit.

This Government is now blaming (since they can’t blame Sinkler any longer) COVID and Putin’s war for their failure to get the economy moving after almost four years in power. Yes, COVID affected us, as it did everyone else, but so did the 2008 Financial Crash. There will always be outside events which impact our finances, particularly tourism, however if your principles are sound, you will weather the storm and come back out the other side.

If your principles are skewed in the wrong direction – to provide largesse for the upper-middle, professional, rich executive and business class at the expense of the majority working people, as right-wing policies are and as Chris Sinckler’s were and now Clyde Mascoll, Dr Greenidge, Ryan Straughn, Avinash Persaud and the business elite of “the private sector task force” (who recommended the ridiculous reduction of Corporation Tax to a mere 5.5 per cent) advised this Government – you will fail no matter how favourable, or otherwise outside influences are.

When you remove disposable cash from the majority of working people who spend almost all of their income monthly and transfer that money to the well off, indirect taxes which depend on high consumption levels will fail to realise needed revenue and the Government will be chronically short of resources to carry out needed services and maintenance to infrastructure as we have witnessed with the sewage system, water supply, the rural road network and the QEH Hospital. You reduce spending on public services just as demand for such services increase due to rising poverty levels.

We have now had nearly four years of damaging taxation and economic policies enriching the elite, causing substantial increases in poverty levels and harming Government’s ability to run the country on top of the previous10 years
of stagnation. Given the Prime Minister’s oblique admission (through this appointment) that she was wrong about Chris Sinckler’s abilities and the reasons for the country’s economic collapse Bajans should take a hard, critical look at the policies being implemented and demand better from a Government which repeatedly insulted and blamed the previous administration for the problems.

Our economic problems go much deeper than being the fault of any one person, or administration. They go back to policy changes that began in the 1990s with the first IMF agreement and which have been continued and doubled and tripled down on over 25 years.

Not only the taxation policies, but the whole configuration of incentives, subsidies, levies, fees, charges and disincentives which form the sub-structure of the economy and which help to determine the success, or failure of various enterprises and entire industries needs re-examining and re-shaping to give us not alternatives, but other options in addition to tourism to diversify the economy and add revenue. We are too dependent on foreign sources to generate the needed revenue and do nothing to stimulate growth within the local economy.

During1997, when moving from Sunset Crest after repeated flooding, on the drive up Molyneux to the highway junction at the former Bennet’s Plantation, I witnessed a transformation taking place on the cane ground. The entire landscape I had walked many times over fifteen years and knew like the back of my hand was being refashioned.

The backhoes and bulldozers had come in, mowing down mounds, digging trenches, smoothing rough patches, filling in the watercourse and building the club house on the former gully which was crossed by the bridge my exercise group used for our long-distance walks. Once I spotted a very large mountain of imported soil, which I had previously seen by the Flour Mill when it was unloaded.

The investors completely reworked the landscape to their own design, spreading new soil and planting new grasses to make it suitable for a golf course. The cane ground became The Green Monkey Golf Course and no one could now imagine it would grow cane.

Our economy has been similarly re-worked since 1992, with Government taking a backhoe to the underlying foundation, importing designers (IMF, Advisors & Investors), changing the sub-structure of financial supports and incentives which underlie growth, importing new taxes (VAT) and policies, removing disincentives to benefit tourism development – from which the real estate and construction industries grew rich – and the offshore industry, in the process destroying the agricultural, manufacturing and Industrial base on which the economy thrived from the 1950s – 1980s.

A similar transformation took place post WWII when the sugar plantations were disadvantaged and jobs created for Barbadians in many other areas, investments being made in non-sugar agriculture and manufacturing with education playing an important part in the post-1940s economy. Another example of that re-shaping was Government using the sugar windfall to start the National Insurance Scheme, instead of paying it out to the plantation owners and workers.

We need once more to re-think the underlying sub-structure of the economy and create a successful environment for as many industries as possible so as to not depend entirely on tourism development for growth. Don’t tell me that agriculture, or manufacturing can’t thrive because you chose to tear up the economic landscape, destroying the ground in which they flourished. Government determines by its taxation, investments, incentives, subsidies, levies and other regulations which industries will succeed. For example, Trinidad subsidizes energy to be competitive in manufacturing, also look at the incentives provided the offshore industry.

This Government needs to get its heads out of BHTA’s business and see other possibilities, or let us have a new Government which is open to changes other than just wanting to make a quick buck trading Bitcoin and Digital currencies. With climate change terms like diversity, sustainability, supply chain are becoming paramount considerations.

High oil prices and water scarcity do not equal tourism growth. We need a successful mix of diverse industries and a fair tax system which benefits the majority. “Trickle-down” does not work.

Ann Walcott is a commentator on issues of national interest.