In what could be music to the ears of Minister of Finance Chris Sinckler, a visiting senior economist is strongly recommending a do-it-yourself formula to resolve the island’s economic crisis.
Former Governor of the Central Bank of Ireland Dr Patrick Honohan Thursday said Barbados could solve its problems without outside help, since no one understood the economy as well as Barbadians did.
“You as a country, it is the country that solves its problems. It is not outsiders. The last thing you want is for somebody, either me, or somebody from Washington, to come here to say, ‘I know what you should do, you should do this, this and this, and please do it quickly’. No, that is not the way any country is going to deal with its problem. Why? Because any prescription that is coming from outside will be adopted half-heartedly at best or even at worse it could be said, ‘oh, what does he know,’” he told journalists at the Central Bank Thursday morning.
“And it is true, only the local people understand the economy, they understand the pressure points. There are various things you can do to deal with all these problems; there are choices to be made, and choices to be made by Barbadians . . . political decision made by the people of Barbados – by the Government of Barbados in consultation with the people of Barbados – and I think that is the only way to think about this.”
In any event, the visiting fellow said, whatever package was agreed must make sense and must have the public’s support.
Consequently, he warned it was important that Government maintains clear and open communication with Barbadians.
“Policy packages have to make sense. It has got to be a coherent medium-term goal to know where you are going as a Government and as a people so if there are surprises and shocks and you are knocked off track you still know where you are going . . . and you can make the necessary corrections.
“And I think open communication with the public is very important. That kind of open communication build political toleration,” Honohan said.
His position on outside assistance is in line with that of the Freundel Stuart administration, which has insisted throughout the crisis that it would stick to a homegrown programme to try to drag the economy back from the brink, despite the conclusion of economists and Minister of Agriculture Water Resource Management Dr David Estwick that the homegrown programme had failed.
Honohan’s recommendation is also is in direct conflict with that of the man expected to lead Government’s economic advisory team, former Prime Minister Owen Arthur, who remains adamant that nothing but a bailout from the International Monetary Fund will save the country.
Honohan made it clear he was not about to tell Barbadians how to run their affairs.
However, he shared experiences from Ireland and other European Union (EU) countries as he spoke on the topic, Recovering From Crisis: Lessons From Europe – a hint that Barbados could learn from those experiences.
The former World Bank senior advisor on financial sector issues explained that some EU states came to an early conclusion that tackling their economic woes required a number of critical steps – including early acceptance of the depth of the national crisis – and they decided to ask for help early if it was needed.
Procrastination and denying the existence of problems would make matters worse, he added.
Honohan advised that despite the ailing economy, Barbadians should not be “too negative” because he expected the economy to emerge from the crisis “over a period of time”.
“Obviously there are problems, but I would be dubious about being too negative. There are solutions and there are best courses of action. I see Barbados as in a situation that it can come out of quite strongly over a period of time,” he said, adding that generally economic recovery from “a severe” financial crisis usually happens within ten years.