Editorial: Towards economic reform
It is beyond the realm of dispute that the single most pressing issue currently facing our island home is that of remedying the precarious state of the economy. To this end, the governing administration has attempted certain reform measures of a fiscal nature; economists, both trained and untrained, have offered their individual solutions and the official opposition has played the electoral card by refusing publicly to air details of its reform strategy although basing some proposed measures such as the removal of the National Social Responsibility Levy and the return to taxpayer-funded state-provided tertiary education at the Cave Hill Campus for Barbadian nationals on what would clearly have to be a more vibrant, and hence reformed, economy.
But perhaps the most startling if not revolutionary prescription for the revitalisation of the economy so far has come in a recent paper from Dr DeLisle Worrell, the former governor of the Central Bank of Barbados. Dr Worrell recommends, in his tantalisingly named study, “The Barbados Economy: The Road to Prosperity”, the termination of the employment of some 4 500 public service employees and the entry into a 5-year structural adjustment programme with the International Monetary Fund (IMF).
In that one swoop, the former Governor has managed to confront the twin 500 lbs. gorillas in the drawing room of the Barbadian economy. No administration contemplating an imminent electoral struggle, as is the current DLP administration, would seriously consider imposing on the electorate the severe social and other dislocation that is likely to be caused by such significant job loss. That would be tantamount to electoral hara-kiri.
Moreover, these job losses will also come at a price, projected by Dr Worrell’s calculations to be some $270 million according to the report in another section of the press yesterday. Such a price tag should serve only to make the adoption of this strategy even more improbable, if not impossible in the current context.
In addition, the current governing administration has so far stoutly resisted the ostensibly cogent urgings of prominent regional and local economists to enter into an arrangement with the IMF. In this regard, a U-turn by it seems unlikely. The official stance might be owed more to a fear of the conditionalities traditionally attached to IMF facilitation, and especially one such -the dreaded spectre of devaluation- than to the necessity of our current economic circumstance that could benefit substantially from a cash injection. Yet, here again, we sense that an electoral consideration enters into the equation; no administration would wish to be known as the one that caused the nominal parity of the Barbados dollar as against the US dollar to fall below the current level.
And yet we wonder. Dr Worrell has a well-earned reputation as a professional economist and we have no reason to doubt that he is a patriotic citizen who wishes the best for his native land. We are therefore minded to believe that his prescriptions, as politically and electorally distasteful as they might be, are, nevertheless, the result of considerable thought and reflection by a globally recognised economist.
Of course, at the same time, he is not the one charged with managing the local economy at a policy level and, in that regard; these recommendations remain just that …and nothing more. The struggle continues…