As promised last week, the latest monthly economic letter published by Dr Delisle Worrell, governor of the Central Bank of Barbados, on January 3, 2017, is our topic of discussion for this week.
The title of the letter “We are the Craftsmen of Our Economic Fate” is very instructive, in my view, and one that must be remembered for some time to come. It begs the question, though, of who constitutes the “We” to whom the Governor keeps referring.
The Governor writes: “The foundation for growth is a stable economy, and in Barbados that means a balance between foreign exchange inflows and outflows. We know when we have achieved that balance because in that case we do not have to dip into the Central Bank’s reserves of foreign currency to make up the difference.
He adds: “The country has failed to achieve that balance since 2013, and there remains a need to dampen spending further in order to protect the country’s reserves of foreign exchange. The reserves are what protect us against the devaluation of our currency. The Central Bank remains in a position to provide US dollars at the 2:1 exchange rate to meet
all legitimate needs, if no other source
Sunday, January 15, 2017 will be nine years to the day that Barbadians entrusted the Democratic Labour Party with the administration of the affairs of this country. During that time, every single Barbadian residing in Barbados, whether young, old, middle-aged, working, unemployed, retired, persons with disabilities, business people, lower-income, middle-income, high-income, credit unions, you name it, has sacrificed year after year as we have been put through the ringer with tax after tax
To assert that “the country”, meaning “we the people”, has failed to achieve the balance since 2013 is an insult to Barbadians. Further, to even suggest that there is a need to further dampen spending, is to suggest that “we the people” have gone on a spending spree over the last nine years and, therefore, are the ones responsible for the current state of the foreign reserves.
“We the people” have not crafted a single policy over the past nine years. “We the people” did not print billions of dollars to support public expenditure. “We the people” did not raid the National Insurance (NIS) Fund. “We the people” did not use the sinking funds (monies set aside to repay principal on outstanding debt) to finance government deficits. “We the people” did not give millions of dollars in concessions to retail and hotel establishments only to introduce taxes on ourselves to recover the said revenue losses.
“We the people” have endured a significant fall in our standard of living as prices have risen substantially while incomes have either been reduced or, at best, remained the same. “We the people” have put up with poor water and sanitation services where such things were taken for granted. “We the people” have suffered through the literal deterioration of the road infrastructure right before our very eyes, yet we are told potholes save lives and are transitory inconveniences. “We the people” have put up with significant delays in receiving our tax refunds.
So, I ask again, who is this “we” that are the craftsmen of our fate? It certainly isn’t me and I’m pretty sure it’s not you, faithful readers. The simple answer to my own question is this. Freundel Stuart, Christopher Sinckler and Delisle Worrell are the craftsmen of the economic fate Barbados is in at the moment. They are the primary ‘WE’ and are assisted by Richard Sealy, Denis Kellman, David Estwick, Denis Lowe, Donville Inniss, the two Lashleys, and the other members of the Cabinet.
My last article for 2016 questioned the state of the foreign reserves and the extent to which freshly minted cash was received by the Bank during the last week of 2016. I don’t believe in coincidences, but the governor of the Central Bank should know that increasing the money supply to help Government finance its deficit is the primary reason that rumours are going around Barbados about the possibility
This is perhaps taken more seriously now because of the statement that the Bank remains in a position to protect the 2:1 currency rate to meet all “legitimate” needs. Who determines or defines “legitimate”? Clearly the answer to that question remains the craftsmen of our current economic fate until the people of Barbados determine otherwise.
As a practising economist and certainly now as a Barbados Labour Party candidate, I want to make it abundantly clear that whilst I cannot escape the debilitating effects these craftsmen have had on our economic fate, I will not take any responsibility nor would I want to associate the BLP with any of it.
I am prepared to take ownership of rescuing Barbados from these craftsmen because individually and as a party, we have not just provided alternative policies to the country but have indicated time and time again over the past nine years, that the policies being pursued by the current craftsmen would lead us to right where we are.
I recall my very first article for this publication entitled “The fear of being right” published on June 5, 2015, not so long ago. As we enter the 10th year under the stewardship of the DLP and knowing that a general election looms large, their impulse will be to attempt to win at all costs. This reality, along with the importation of fresh money in December 2016 and the publication of the Central Bank governor’s latest economic letter, have heightened those fears expressed when I wrote my first article.
The current craftsmen of our economic fate should do the honourable thing and step aside.
(Ryan Straughn is a UWI Cave Hill and Central Bank of Barbados-trained economist and the endorsed BLP candidate for Christ Church East Central. Email: firstname.lastname@example.org)