BUSINESS MONDAY - Austerity fatigue
A University of the West Indies, Cave Hill academic believes that by now Barbadians have reached the stage where they are experiencing austerity fatigue.
Dr. Alana Griffith made this observation while participating in a recent panel discussion sponsored by the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES), which looked at the current Barbados economic recovery programme.
In her presentation, the UWI lecturer remarked that the country had been going through austerity in the eight years prior to the signing of the current agreement between Barbados and the International Monetary Fund (IMF).
“By now people are mentally tired with seemingly unending austerity measures and, unfortunately, now we are hearing and understanding that this (current IMF programme) is not a short- term fix as the cuts will go for a longer period,” she told a large audience who attended the event at the UWI.
In fact, Dr Griffith reasoned that the cuts being instituted at this time will go on for a period that is longer than the life of the current government.
Under the previous Democratic Labour Party administration – which came to office in 2008 – attempts were made to fix the issues created as a result of the global economic meltdown which started that year.
Measures included a mix of increased taxation, foreign and domestic borrowings, money creation, temporary lay offs of public servants and cutbacks in some public spending on social services.
However, the problems were not fully solved and the incoming Barbados Labour Party went a step further by summoning the IMF, defaulting on a foreign loan repayment, adding new taxes and shedding well over 1 400 public sector jobs.
It is expected that these measures will be tightened in 2019 in order to access more funding from the IMF and other multilateral institutions, and which holds the possibility for economic growth to be elusive.
Dr. Griffith said she agrees with suggestions that there is a need in Barbados to reformulate social services, and that government is at the point where it has to make a decision as to what social services it actually will provide and how they are provided.
She also charged that the private sector in Barbados is not quite ready, something that is quite evident when it comes to pension reform.
The UWI lecturer recalled that some years ago, it was found that Barbados was in no position to pursue a pension reform model similar to the one in Chile, because “our private sector was unable to undertake that kind of reform”.
She added that there is also a role for civil society in Barbados to be more active in these issues, which are currently shaping the future of Barbados.