Opposition Leader Owen Arthur thinks he has the prescription for a major economic recovery in Barbados.
And if the former Prime Minister had his way, the dosage would include the establishment of a privatisation programme where the funds raised would be used to reduce debt and support capital works, the introduction new fiscal incentives focussed on reducing the state’s spending on health and education, and a new national business facilitation programme overseen by the Prime Minister’s Office.
Arthur made these and other suggestions today when he addressed a Barbados Chamber of Commerce and Industry luncheon at Hilton Barbados.
Speaking on the topic The Prospects For Private Sector Led Economic Growth In Barbados, the Barbados Labour Party Leader told business leaders the island was in “a moment of unprecedented hazard”, and that it was “clear that major adjustments have to be made to the scope and nature of Government’s direct involvement in the economy and society”.
“Some of these adjustments must entail fundamental changes in the composition and growth of public expenditure,” he said.
“Such an adjustment programme must be structured to ensure that the poor and vulnerable members of the community, especially our senior citizens and the physically challenged, have full and free access to services paid for by the State.
“In a word, what is urgently needed in Barbados is a coherent national strategy to put the country on a path towards robust growth and sustained and sustainable development,” he added.
Arthur said any such coherent strategy to generate robust growth and sustainable development needed “a clear understanding of the factors and constraints which work against the attainment of growth and development in Barbados, and which must be removed. On this matter, there can be no half measures”.
The strategy must also take into account the range of attractive and viable opportunities and options that present themselves as means by which growth and development can be stimulated. The former Minister of Finance said the extent of the crisis Barbados was in also warranted “the deployment of a number of new exceptional initiatives, which will constitute new ways of doing things, and which departs from the conventional wisdom as to how Barbados’ social and economic affairs should be managed”.
“The Barbados economy has however become a shrinking economy.
It is a staggering statistic that the value of the economy’s output at current prices in 2011 (nominal GDP) ($8.6 billion) was lower than in 2007 ($8.96 billion). The same holds true for real GDP which declined from $1107.5 billion to $1073.9 billion. The recent performance of the main economic sectors, especially tourism, suggests that there could be further declines this year,” he noted.
“No comparable experience can be found when the Barbados economy at the end of a five year period, has ever been smaller than it was at the start.
“Secondly, all indications are that the country’s economic problems are spreading and assuming dangerous new dimensions rather than showing themselves to be amenable to policy control,” he noted.
He said what started as a recession accompanied by a fiscal problem had “spread to become a problem of corporate viability, resulting in the absence of any forces, at the level of enterprises and sectors, which can provide the spark to ignite growth”.
“It has to be deeply troubling that the sectors which should be leading us out of this economic morass – tourism and the international business and financial sectors have become the sectors where the gravest problems are now surfacing. It has to be equally troubling that, within our leading sectors, the largest enterprises are failing,” he added. (SC)