#BTColumn – A difference of vision

Disclaimer: The views and opinions expressed by the author(s) do not represent the official position of Barbados TODAY.

By Ralph Jemmott

The subheading on the front page of one of our daily newspapers  of October 5, 2022 read: “Greenidge optimistic but Howard cautious about the future.” The Greenidge in question is Dr. Kevin Greenidge, Senior economic advisor to the Government of Barbados and (Michael) Howard is retired Economics Professor Emeritus at U.WI. Cave Hill, author of a number of books and papers on various aspects of Caribbean economic development. However in spite of their vast knowledge of the ‘dismal science’ their visions about our country’s economic future is considerably at variance.

Professor Howard is not alone in his caution. At least two other economists, Professor C. Justin Robinson and Mr. Anthony Wood have had cause to question Dr. Greenidge optimism. Wood was himself a Lecturer in Economics, and is an apostate form the Barbados Labour Party where he was a Cabinet Minister. As one of the architects of Barbados Economic Recovery and Transformation (BERT) program, it could not be expected that Greenidge would express gloom about its prospects. The viewpoints on both sides are about a future that no one truly knows. As someone once joked “one should never make predictions, particularly about the future.” If for example Mr. Putin of Russia or the President of North Korea should start a nuclear conflict, all our futures may be in doubt.

In his interview on CBC’s ‘In the Know with Crystal Hoyte’ (Tuesday October 4), Dr. Greenidge was at his optimistic best. Among other aspects he noted: 1. that in transforming the State Owned Enterprises, there would be no substantive loss of jobs as most workers would be redeployed. 2. The new three-year Extended Fund Facility (EFF) and the Resilient Sustainability Fund (RSF) would unlock some $U.S. 293 million in funding. It secures cheap financing at about 1 percent compared to 6 to 8 percent obtainable on international markets, offering the government greater fiscal space. 3. Greenidge was in praise of P.M. Mottley’s ostensible securing of access to Climate Change financing. 4. At the end of July 2022, Barbados’ debt to GDP ratio stood at an apparently manageable 123 percent. 5 The noted Credit rating agency, Standard and Poors had recently reaffirmed the country’s positive rating and the World Bank itself has stated that Barbados was on course for double-digit growth this year, negating lingering fears concerning the country’s investment grade. The signs, says Dr. Greenidge, suggest that Barbados’ finances were generally speaking “in a good place.”

Like Professor Howard, every right-thinking Barbadian would hope that Dr. Greenidge’s projections hold firm. However, wishful thinking is one thing, existential reality may be another. Recently the British Chancellor of the Exchequer Kwasi Kwarteng announced a mini-budget which he was assured would lead to economic growth and solve the myriad of the U.K’s socio-economic problems. The market resounded with a categorical No to the Chancellor’s proposals and Prime Minister Truss and her Chancellor had to do an ignominious U-Turn on the 45P tax which they had rigorously defended. A commentator on Sky News with an obvious affinity for Labour, described Chancellor Kwarteng’s  certainty about the correctness of his proposals as “almost pathological.”  The whole affair left the British Conservative Party deeply divided.

My point is that today we live in a world in which certitude is not a given and we have heard many sureties offered before. One recalls when we were assured that the local economy was “geared for take-off.” Buffeted by headwinds the aircraft never crashed and burned, but certainly it never soared. We are apparently geared for take-off again. Buckle your seat-belts. Hopeful expressions are expressed almost every year. The Barbados Central Bank projects growth at 10.5 percent while the World Bank calculates that the local economy should return to pre-COVID-19 levels in about two years.

While optimism is good and hope springs eternal, there are circumstances that cannot be ignored even by the most wishful of thinkers. On September 9, 2022 it was revealed that for the period 2020-2021, Barbados had fallen 14 places in the United Nations Human Development Index (HDI), falling from 56 in 2019 to 70 in 2021. It is cold comfort that human development had fallen in 90 percent of countries over that same period.

The Barbadian economy will continue to reflect certain structural deficiencies and remains extremely vulnerable to exogenous shocks. The Prime Minister herself has cautioned Barbadians that they should brace themselves for the possibility of further external shocks. Tourism our main foreign exchange earner remains highly susceptible to external interferences. Recently Lufthansa cancelled its flight to the Caribbean in favour of its ostensibly more profitable North American routes. The instability of the British Pound vis a vis the United States dollar if it continues, could harm our tourism prospects in the British market which accounts for an estimated 40 percent of Barbados tourism. Perhaps more importantly, no one knows how or when the Russia-Ukraine war will end. None of these factors would appear to suggest that Barbados’ economic prognosis is as heathy as the optimists would want to assure us.

Anthony Wood has noted that Dr. Kevin Greenidge’s projection of growth is not quantified. It is not quantified because it is not knowable, at least not with any degree of certainty. Predicting growth is easy, devising a growth plan is far more complicated. A country like any ordinary individual can stabilize its finances in two ways. One is to earn more revenue through growth, the other is to cut spending. Politicians generally speaking, are reluctant to do the latter in part for political reasons, they want to be elected or re-elected. Perhaps speaking more kindly, they may opt to spend out of a genuine concern for the people, particularly the less fortunate in society.

Apart from growth, the imperative is improved productivity, doing things differently, more efficiently and simply better. This include real Civil Service reform and a real National Initiative for Service Excellence, not just another nicely coloured picturesque booklet. However a new improved prospectus may come up against certain retarding factors in the culture that holds most of us in thrall.    

Add to the economic distress there is a growing sense of social anomie, societal ill-health. As a country with relatively few natural mineral resources, Barbados has always relied on its social capital… the quality of its people. One would have to be blind or unconscious not to realise that we are witnessing a deterioration of that social currency. A Canadian tourist who has been visiting Barbados regularly since 1975 told of a deterioration of behaviour on the Accra Beach over the last few years….. more vulgarity, aggression and a general disregard for social civility. Tourism we should be reminded is a social product.

More persons seem to be falling into poverty, forced to seek assistance from various charitable organisations. A new form of crime seems to be brewing, the phenomenon of car-jacking. Meanwhile Barbadians appear to be becoming increasingly desensitized to the prevalence of crime and violence. Professor Howard who arguably takes a broader view on economic matters than most, has warned of the possible deleterious effects of social decay on the island’s tourism sector.

One idea that both the optimists like Dr. Greenidge and the less hopeful like Howard, Wood and Robinson agree on is the need to grow the Barbadian economy, the imperative of what Robinson terms “growth catalysts.” But he himself has written that in real terms and I might add, in better circumstances, at the end 2021, the Barbadian economy was essentially the same size as it was in 2000.

One idea conspicuous in its silliness is the notion that we should increase the population of an already crowded 166 square mile island by some 80,000 persons. The idea is that we need more consumers, presumably to consume more imported food, more imported cars and  large flat-screen TV sets. Population size must always be related to resources, that is common sense or what Bernard Shaw called linear logic.        

Ralph Jemmott is a retired educator and regular contributor on social issues.