Harold Macmillan, the British Prime Minister from 1957 to 1963, when asked what was a statesman’s greatest challenge, famously replied: “Events, dear boy, events.” No doubt he was casting his mind back to the Suez crisis that led to the resignation of his predecessor, Anthony Eden, only a year earlier. In sum, stuff happens.
Many things are at stake when world events occur: the lives and livelihoods of nations near and far are touched, particularly those least able to alter the course of events.
And so, soon and very soon the Mottley administration will have to respond more cogently to the events in Ukraine. For like it or not, the Russo-Ukrainian conflict is even more of a Third World War, given the intricate intertwining of relationships in a globalised world.
It is said that several times a year, a cargo liner operated by the Russian-based Volga-Dnepr Airline – the Aeroflot of air freighting – stops here to refuel for its Transatlantic voyage from Latin America back to Europe. We gather that it pays actual US cash – so the Barbadian economy is not immune to its dealings with an economy that is propping up a brutal and merciless war. It’s complicated this global geopolitics thing; not as malleable as clever rhetorical flourishes at global conferences or in front of television screens.
Energy supply disruption and the sanctions imposed by governments and oil companies on Russian oil and gas imports will almost certainly have an impact on prices here. Global crude oil prices shot up to a 14-year high of approximately US$145 ($290) a barrel and we are already paying four-dollar-a-litre petrol. Only in the last several hours have world prices dropped some 13 per cent – the biggest single-day fall in 30 years – after the United Arab Emirates stepped in to boost oil production.
Expect then, the electricity prices here to also rise as Light & Power enters into future oil contracts. That Ukraine thing again.
Great power politics therefore affect nations large and small and only the more cynical realists would wager that wars and rumours of war abroad can have little to no impact on our peace-loving nation.
A freighter can be stuck in the middle of the Suez Canal and the availability and price of goods here at home are immediately affected. What expectation can we have that a hot war raging so far east will not cool economic growth here as we dig ourselves out of a pandemic?
We say now’s the time for the Mottley administration to be more quickly proactive, rather than slowly reactive to these developments, ever cognizant that even the very best laid plans can be upended by events elsewhere
We have already had several inflationary shocks in the last two years. Too many Barbadian households are still reeling from the impact of COVID-19. Inflation has taken a huge bite out of our spending power.
Our main concern here is not so merely about prices themselves, but their impact on those least able to weather these shocks, almost always the poorest and most vulnerable – just as it is in a Ukraine at war. Here at home, it is axiomatic to expect that the cost of transport will rise, particularly as private operators of public transport complain of the dent that high fuel prices is making in their operations.
But proactive and pragmatic policies addressing the fallout of the “Ukraine energy crisis” must be immediate, comprehensive and long-lasting. For one thing, now is the opportunity for the administration to put its money where its mouth recently was on the climate change phenomenon and begin to retool its economy for a more sustainable future. Never mind that the high price of fuel imperils that progress.
Equipping the Transport Board with electric buses has, from all accounts, been an unqualified success. Lower maintenance and fuel costs now threaten to put the state bus corporation back in the black.
But the same opportunity to green our blue and gold buses should be offered to private operators. The economies of scale demand that our ZR van operators, for example, gravitate to the electric buses that can carry more passengers in greater comfort. It is in the medium and long-term interest of the government to facilitate the importation of electric vehicles by the private concessionaires. This should have an immediate impact on the cost of transport for our poorest and most hard-working Barbadians.
In the short term, however, Government must turn its attention to the excise tax it currently charges on fuel. Tax cuts must surely not be a dirty word for this administration: witness the precipitous fall in corporation tax imposed in a bid to compete with the OECD as a low tax jurisdiction. It must also therefore recognise that it may be more advantageous to reduce the taxes on fuel and spur additional economic activity that will in turn make up for short-term shortfall in tax revenues.
Now, surely, the Government must be more clear about its climate change stance. It must accelerate the push to 100 per cent renewable energy by 2030. Given the events of the last several weeks in the Ukraine, fuel prices are but a small part of an overall strategy the administration needs to develop to turn the current crisis into an opportunity and by so doing, deliver the greatest good for the greatest number of Barbadians.
Events, dear Prime Minister, events. Start with a fuel tax cut now.
