Minister of Finance Chris Sinckler says it is time for a national discourse on a new socio-economic development model for the country to tackle the foreign exchange situation, high debt and the overall state of the economy.
While acknowledging that the country had not been earning and retaining enough foreign exchange and has been engaged in “significant” borrowing over the years, Sinckler gave the assurance that Barbados would not be allowed to become a failed state.
“We stand before this Chamber and boldly declare that we have not loss faith in Barbados, we have not loss faith in our country, we have not loss faith in our people and we have not loss faith in our future,” he said as the led off debate in Parliament Monday morning on the 2017/2018 Estimates of Revenue and Expenditure.
“We never fail because we appreciate the fact that within ourselves we do not possess all the answers to all the issues that confront us, but are willing to engage in a process that is constructive and aimed at finding possible solutions that work, and we will never fail,” insisted Sinckler.
Making it clear that he would not be “pushed down by pessimism and harassed into panic by the peddlers of this supposed impending demise of Barbados”, Sinckler recalled that the island had gone through a lot worse during the crises of the early 1980’s and 1990’s.
Sinckler reminded Barbadians that the country underwent a number of changes during those periods, including increased taxes, wage freezes or wage cuts, help from the International Monetary Fund, job losses, increases in user fees, among other things.
He stressed that while the current situation called for some tough decisions to be taken, the Freundel Stuart administration would be going about the needed restructuring in a responsible, integrated and sensitive manner and not “stupidly”, so as to negatively impact the island’s development or disrupt its social fabric.
“There is a national conversation to be had, not just on our economy, because it is not just an economy issue, it has to be had on the development model that we have followed for the last 50 years,” said Sinckler, who has been under immense pressure in recent weeks over his management of the island’s economy.
“I respectfully submit that starting today, through the course of this Estimates debate of this Parliament in both Chambers, and surely within the wider community, now is as good a time to have that conversation and I can only hope that through it all, productive, responsible and reasonable discourse will take place and evolve in a way so as to result in sensible solutions to the challenges we face.
“We as leaders in the political directorate on both sides of the political sides, perhaps have our last credible chance to set aside the urge to play politics in speech and deed, and lead from the front by setting the stage for a responsible national conversation on these issues,” he added.
In his presentation, Sinckler zoomed in on Barbados’ current foreign exchange situation and foreign exchange earnings, the fiscal situation and state of public finances, as well as the country’s debt.
Stressing the need to stabilize the economy, he said there were a number of “serious structural issues” that were not easily dealt with “as people would have you believe”, including the lowering of the deficit, shoring up the reserves and the ticklish issue of slashing Government transfers and subsidies.
However, Sinckler said what was needed was the implementation and maintenance of an “appropriate macro-economic framework”, adding that there was also need to carry out a “complete analysis” of the tourism industry to find out how money was being earned in that sector, where it was coming from and how much it was really making and how much was staying out the country.
“It is commonly felt that this framework should consist of the following: foreign exchange adequacy, a tight fiscal policy where the deficit does not exceed at least the rate of economic growth, and the debt levels that are sustainable and financeable going forward,” said Sinckler.
He explained that over the years majority the island’s foreign exchange earnings came through the tourism and international business and financial services sectors, adding that a “significant proportion” also came through Government borrowing.
In an apparent dismissal of the recent March of Disgust by the Opposition Barbados Labour Party (BLP) over the weekend, Sinckler said: “I say to them simply, that troubled though I might be, I am not distressed. Perplexed at times I will be, I shall not despair. Persecuted, for sure I am, but not abandoned and cast down by some repeatedly but never ever destroyed”.
In fact, recalling the harsh economic times that confronted the country in the early 1990’s that led to a national march by the then Opposition, Sinckler said at that time “the weak-hearted give up on Barbados and declared its death while the over-anxious in Opposition pressed their case for the Government to be handed to them as the only real chance for survival of the country.
“It sounds familiar doesn’t it? I also witnessed the bold leadership of the then Prime Minister and Minister of Finance Erskine Sandiford, against severe opposition, including a real march that took place across the country with an estimated 30,000 persons,” said Sinckler in downplaying the success of the Mia Mottley led march at the weekend, which is said to have attracted about 10,000 participants.
However, the minister of finance admitted that Government has been running high debt since 2008 due to wages and salaries and subsidies and transfers, Sinckler admitted that was perhaps the area that most required the national discussion at this time, given that it had increased “significantly” over the years.
“What we are going to really have to have the national conversation about is subsidies and transfers. That is the one because everybody talks about it. You hear the private sector, you hear the Central Bank, you hear everybody, ‘cut subsidies and transfers’, that is the category,” he said, pointing out that the state-run Transport Board, the Welfare Department, non Governmental groups, such as disabled and the trade unions, Battered Women’s Centre were the primary recipients.
He also highlighted the Barbados Community College, the University of the West Indies and the Sanitation Service Authority among the major beneficiencies.
He was adamant that it was no easy task cutting subisidies and transfers, since most of the areas that received Government help were targeted at the most vulnerable in society.
“So if we want to talk about bringing down the deficit, if people want action on cutting subsidies and transfers I want it to be plainly said in this debate that this is the category we are dealing with and who will be affected,” he said.
“What areas of statutory transfers you want to cut and which you would advise the Government to cut to help bring the deficit down. We want to hear from the Opposition on these issues. Don’t hide behind the veil and say Government must do this and Government must do that and be disgusted. Be disgusted enough to say what you are going to do bring it down. We are open up to all suggestions and we want to hear. There is no more fence sitting, no more muck raking, no more pseudo scandal and throwing things at people and hiding behind all of that. Come to the board and tell the people of Barbados how you are going to cut this category . . . subsidies and transfers,” insisted Sinckler.
Rising on a point of order, BLP Leader Mottley simply said: “Under our system of Government the Government must govern, it is not the Opposition that governs.”
In that case, Sinckler said, the DLP would continue to govern as he mocked the Opposition for not putting forward a viable recovery plan.