EDITORIAL – Cautiously optimistic
There is no denying the last few years have been tough, and while relatively good progress has been made in respect of the implementation of the Barbados Economic Recovery and Transformation (BERT) Programme, the economy in 2019, according to the Central Bank Governor Cleviston Haynes, remained subdued.
It is likely that this was the case given the heavy focus placed on fiscal consolidation, which has been necessary to address the macroeconomic challenges we face. To date, the domestic debt has been successfully restructured and now with the external debt restructuring also complete, it is expected that investor confidence is well on the way to being restored. Indeed, it is hoped that this is the case, as the Central Bank has said that the while the economy is forecast to see modest growth in the region of 1.25 to 1.75 per cent in 2020, that is effectively dependent on continued growth in tourism and recovery of private investment.
As it relates to tourism, while the sector has been holding its own, with 2019 being its fifth consecutive year of growth – three per cent to be exact – we cannot continue to put all our proverbial eggs in that basket. We have over the years seen what the threats of global pandemics, terrorism and the destruction caused by natural disasters, be it hurricane or earthquake, has done to tourism. The sector is vulnerable and while it tends to bounce back relatively quickly, we can take no solace in that. Also, we cannot ignore the impact that increased taxation and fees introduced in that sector could have on the decisions of potential tourists to visit these shores. We must be mindful not to price ourselves out of the market and so impact their spending power, even before they get here.
It was not too long ago that we were being warned of the risk of inertia in the economy if we continue to rely on tourism. So the need to diversify must remain foremost in our minds, as we continue to seek ways to grow our economy. But for all intents and purposes as it relates tourism, we should see growth greater than three per cent, as a result of the upcoming UNCTAD conference taking place here October, which is expected to attract more than 3 000 persons, and the We Gatherin’ initiative, which will likely bring even more persons here around the summer months than is usually the case.
Now on the topic of private sector development to spur the economy, we must keep our fingers crossed and hope for the best, as our ability to meet the projected forecast is also highly dependent on those projects actually coming to fruition. Certainly, it depends, too, on what point within the year those projects commence. Should these projects continue to be delayed, as has been the case in the past, and get going late in the year, it could result in the expected gains perhaps not being realised until 2021.
It was not too long ago that projects like the refurbishment of Sam Lord’s Castle and the construction of Hyatt, among others, were expected to help grow and develop the local economy and we know all too well what happened there. So it is imperative now that the planned construction in both the private and public sectors are advanced, as these are needed to increase employment and ultimately boost consumer demand and spending.
In this respect, we agree with Governor Haynes that the country must do better to address any deficiencies in the business climate which can in anyway impact the above, as it is vital that we establish the environment and conditions that would allow for sustained growth to occur.