The business community has fired back at Government backbencher James Paul advising him to look in the mirror for the reason the private sector is not reinvesting in the ailing economy.
Paul last week described the private sector as disingenuous for pointing fingers at Government over the struggling economy, while refusing to reinvest here.
He also claimed that the business community had refused to take some of the blame for the inefficiencies in the public sector.
However, Chairman of the Barbados Private Sector Association (BPSA) Charles Herbert told Barbados TODAY it was Government, not the private sector, that had the responsibility to create the level of confidence needed for investment.
And, he said, in the current environment, businessmen were nervous to risk their money.
“It is not the private sector’s role to create the environment that encourages investment. It is Government’s job to create that environment that encourages investment. There is no question that the private sector is nervous about the environment. It is uncertain and in those cases people make less investment. Creating the environment and encouragement is Government’s job,” Herbert insisted.
Addressing a news conference last Friday, Paul complained that businesses had “billions” of dollars “sitting” in the banks earning little or no interest, therefore they were also to blame for the state of the economy.
He added that they had refused to come up with ideas to help develop the country, create employment and earn more foreign exchange.
“It is an indictment on some of them that we have in our private sector, that instead of trying to contribute to the development effort of this country, want instead, Government to go out there to borrow more money to give them, not to engage in new projects that would advance in the development interest of this country, but instead to allow them to continue with their buy and sell importation scheme which has contributed to where this country is today,” Paul charged.
Herbert today admitted that the business community was banking its monies, emphasizing that businesspeople had chosen the option to invest less or put their money in the bank and earn very little to no interest instead of reinvesting in an uncertain economic climate.
The BPSA head said in order to restore confidence in the economy and welcome more local and international investment Barbados needed “a published recovery plan so that people know what is going to happen”.
He also reiterated his call for more discussion among the tripartite Social Partnership group.
“There is a high level of uncertainty. The reason for the Social Partnership is to have dialogue between Government, labour and the private sector to create an environment which everyone feels comfortable with. That is what we have been fighting for, for ages.
“But yes, when the environment is uncertain people don’t invest or they invest less. It is not good for anybody to put money in the bank for zero per cent interest, but that will tell you how worried people are. So he [Paul] is right, [but] he is just attributing the blame and the responsibility for changing it to the wrong group,” he stressed.
Herbert last week gave the Freundel Stuart administration a failing grade for its handling of the economy in 2017, saying there were no achievements to speak of.
In fact, Herbert pointed to the more than year-long sewage problems on the south coast, the abandonment of various economic recovery plans, the seeming inability of the authorities to correct inefficiencies in various Government departments, and the non-payment of income tax and Value Added Tax returns to emphasize his point.
“We don’t even have a recovery plan. A recovery plan that was started hasn’t been approved. We haven’t achieved anything. Nothing has come to completion,” Herbert had said, adding that to make matters worse, Government instead implemented the National Social Responsibility Levy (NSRL), which was not only a “bad” tax, but “the wrong measure” to correct the fiscal problems.
The Opposition Barbados Labour Party and former Governor of the Central Bank Dr DeLisle Worrell have also been vocal in calling for the removal of the NSRL, describing it as harmful.
Late last month Worrell had also outlined in his paper, The Barbados Economy: The Road to Prosperity, the need for public sector reform and cuts in Government expenditure.
He proposed that Government cut 4,500 public sector jobs over the next three years and enter into a formal structural adjustment programme with the International Monetary Fund.
However, in what seemed as a direct response to Worrell, Paul said those calling for severing thousands of public servants were hypocrites.
“I challenge people to tell me which private sector person is going to hold up their hand and say I will take the 4,500 people when they go home. Not one. So that is it. We need to stop being hypocrites.
“I hear sterling criticism of the NSRL from the Opposition. The problem that the Opposition must deal with and must address and all the critics of the NSRL is that, in its absence would they want this Government to send home 4,500 civil servants? That is the fundamental question we need to ask ourselves,” he stressed.