#BTEditorial – Throne Speech of great expectations

When the new session of Parliament commences in a matter of hours, it will mark the second Thorne Speech delivered by Governor General Dame Sandra Mason under the Mia Mottley-led Barbados Labour Party administration. Unlike the last occasion when the Governor General laid out the newly minted Government’s plan for the island from the ornate setting of the Upper Chamber in our historic Parliament Buildings, the 2020 version, like most things will be heavily influenced by the COVID-19 pandemic and presented from the convention space at the Lloyd Erskine Sandiford Centre.

Back in June 2018, Dame Sandra spoke of Government’s 20 mission critical issues that had to be tackled as a matter of urgency. The mandate at the time was to address what was described as the “unprecedented economic and social uncertainty for Barbados and its people”, characterised by a stagnant economy, excessive taxation, unsustainably high levels of debt, decaying sewage systems, and inadequate foreign reserves to safeguard the value of the local dollar.

Two years on, Barbados’ economic and social landscape can be described as teetering. However, Miss Mottley and her 28-member team should still be complimented for their successful renegotiation of the national debt which created more space for Government’s revenues to be applied to things other than paying back lenders. The debt restructuring process paved the way for the island to access additional financing at much friendlier rates. The International Monetary Fund (IMF) maintains us in its good graces, commending the administration for continuing to meet the targets established under the Barbados Economic Recovery and Transformation (BERT) Programme.

Government and its various state actors must be commended for steadying the ship of state. Having being relied upon by a record-breaking number of Barbadians for near 26 weeks, the time is running out for the National Insurance Scheme (NIS). With unemployment running at almost 40 per cent, this has resulted in contagion in the informal sector as sales have been reduced to a trickle as much less money is circulating in the economy. The NIS needs to have people working and contributing to its various funds or the social security structure will be greatly undermined.

We do not expect that Dame Sandra will lay out any grandiose plans by the administration, for there are too many unknowns and factors that remain completely out of the hands of the political leadership. For to make promises of a dramatic turnaround, would be to give false hopes to the population.

Noted regional economist Dr Justin Ram, has worked throughout the Caribbean and for the British Government. His last posting was as director of economics at the Caribbean Development Bank. He knows Barbados’ and the region’s economies well. The apolitical economic expert warns that the unprecedented disruptions brought on by COVID-19 are going to be around for a while and so planning around expectations of 12 or 18 months recovery period might be overly ambitious.

In the absence of a successful, safe, effective and widely available COVID-19 vaccine or treatment formula, people will continue to fear travelling too far from home and the balance sheets of corporates will continue to be challenged.

In an attempt to offer a reality check to those who may be tempted to place their heads in the sand, or worse yet, gorge themselves on political rhetoric, the economist advised our population to prepare for the possibility of even tougher times ahead.

Barbadians were reminded that it took about 14 months for the island’s economy to recovery after the September 11 attacks in 2001, while it took a staggering five years to begin recovering from the global financial crisis of 2007/2008.

A five-year recovery from the COVID-19 pandemic is not something any political or business leader wants to hear at this time. We know that many households will have great difficulty wading through five years of a depressed economic state.

In fact the goodly economist said many households may start to feel a real pinch after the moratoriums on loan payments end and people experience difficulty making their monthly mortgage payments to financial institutions.

And so, the much anticipated Throne Speech should be a sobering message to the country that prepares the citizenry for the realities of what could confront them and not an exercise in coddling the population into a false sense of security.