Thank all of you for your comments on my last article. I am glad I could bring clarity to some of the issues we are facing as a nation. After writing my column, I listened to the response to the Budget by the former Prime Minister, Owen Arthur, who brought even more clarity to the position of the Government and also offered two solutions to the problems being faced: go to the International Monetary Fund (IMF); unpeg our dollar from the US dollar and peg it to a basket of currencies.
I even read an article by former Central Bank Governor, Dr DeLisle Worrell, in which he said he advised the Government to go to the IMF as well. I must admit that going to the IMF always seemed like a frightening prospect and a last resort, but the way Mr Arthur explained it, demystified the issue for me and took out the fear factor. I don’t know if there were hidden clauses in the document of 2016 that he referred to, but if there were not, then their suggestion of a $300 million structural adjustment programme over three years sounds a lot more palatable than $500 million in nine months.
Unfortunately, it seems that listening is not a strength of this Government. Surely someone must have advised them against the callousness of taking possession of a new $350,000 Mercedes in the same week as delivering a pain-inflicting Budget. Let us not forget the outright shamelessness in restoring the salary cuts to parliamentarians while private and public-sector workers have been on wage freezes and salary cuts for years.
There was an audio clip from the radio programme, Brass Tacks, that must have gone viral. It was from a lady who had called in to the programme to share the hurt and anger she felt over the Budget. I think it reflected exactly how most Barbadians feel. I really do not know how Mr Inniss and Mr Estwick slept that night after denouncing the budget and then turning around and voting to pass it in the House. I hope their constituents do not have short memories when election time comes.
I was just speaking to my hairdresser only this week about the National Social Responsibility Levy (NSRL) and telling her how it will impact the price of the products she uses. She will therefore have to increase the prices to her customers (me included) to cover those costs.
Some of her customers will not be able to meet those costs and will visit her salon less often. The only way she may be able to hold her own and be able to pay the rent is if she starts to get clients from the more high-end salons who will consider her prices reasonable after being accustomed to paying higher prices. This is not her usual market though. Will they come in town to a hairdresser in a lowly mall? What will happen to her business and others like hers?
So already we can see the possible effect on the economy. The measures that are supposed to “balance” the budget may have a short-term impact, but what about the long-term impact of a contracting economy and less economic activity? Surely the Government cannot be so short-sighted and callous as to sacrifice Barbados on the altar of politics.
The private sector needs as a matter of urgency, to explore new ways to earn foreign exchange. The days of the large retail stores simply bringing in goods to resell must take second place to entrepreneurial companies arising and selling their products and services globally via the Internet.
I am trying to do my part by continuing to write books and sell them on Amazon but already I can feel the increase in competition between the time I self-published my first novel The Merger Mogul in 2012 and now. So, I have to find innovative ways to market them. Thankfully, the World Bank was so happy with the outcome of the first round of the WINC Acceleration Programme that a second round is being funded so that will contribute a little foreign exchange to the economy.
We really need to start to think about the next 20 years and the kind of economy we need to move towards. The International Business sector helped us tremendously in the last 30 or so years, but now as countries are facing their own economic challenges, they are looking for ways to keep their companies at home and benefit from taxing them so it won’t be an easy ride for us.
When that NRSL hits on July 1, our already expensive tourism product is going to become even more expensive. Granted the VAT on rooms has not gone up but the price of food and alcohol will go up considerably. Does Barbados have any better beaches than Grenada, St. Lucia or Jamaica? Does the sun shine any more brightly here?
The bottom line is we cannot wait on Government to drive economic growth. That is not their function in any case. Their role is to facilitate business development and growth. Obviously this Budget will not do that, so we in the private sector need to start looking to develop new digital and knowledge based products and services that we can export to grow our businesses and earn the foreign currency that we need.
That will be one of the focuses of the second round of the WINC Acceleration Programme. To find businesses that are exporting or that want to export and help them to grow. We all know that the Barbados market is too small to effectively grow our businesses significantly so, as a first point, we need to reach out to the Caribbean market and then globally.
With services like website development and App development, it is easier to market our services on the Internet and compete globally. One of my service providers, which is a Barbadian company, is doing website development for a huge company in Canada. We need more of that. However, we don’t need Government to be taxing our incoming foreign currency earnings at 2%. I believe they said they would look at that, as well as purchases for inputs. I sincerely hope so.
Although we are facing potential hardship up ahead, we cannot give up. This is the perfect opportunity to demand change and do something. By that, I do not mean anything violent, for to go that route would be the downfall of our nation. We have the power to protest peacefully and the power to make our voices felt at the polls. We also need to ensure that whoever we vote for can provide solutions to our problems.
(Donna Every is an author, international speaker and trainer. She was the Barbados Ambassador for Women’s Entrepreneurship Day (2014 – 2016) and is the Barbados Facilitator for the InfoDev WINC Acceleration Programme. Contact her at firstname.lastname@example.org
Website www.donnaevery.com; www.facebook.com/DonnaEvery1)