Barbados is Sinking
There is no room for hubris, arrogance, false pride and ignorance …
“Government’s chronic crises of excessive debt, high fiscal deficits, falling foreign exchange reserves and overstaffed and outdated institutions for delivering public services are only a part of the deeper problem.”
by Peter N. Boos FCA
Recent events and public pronouncements both locally and internationally have confirmed the very poor state of the Barbados Economy.
Government’s chronic crises of excessive debt, high fiscal deficits, falling foreign exchange reserves and overstaffed and outdated institutions for delivering public services are only a part of the deeper problem.
This is not a crisis like any we have ever experienced and it requires a response like nothing we have done before.
Waiting for recovery is not an option. Many countries already have strong growing economies. In Barbados all of our productive sectors are under-performing.
Barbados is in a deep structural vortex and it will take great leadership, courage, new thinking and teamwork to dig us out a step at a time and build a strong sustainable economy.
This crisis has been in the making for many years.
Whilst spending less is critical, our fiscal and monetary deficits are symptomatic of the many underlying weaknesses that retard growth and investment.
Our limited export sectors, our outdated education system, the dysfunctional Legal Justice System, our poor labour productivity, pitiful business facilitation, lack of private sector innovation, absence of good leadership and management skills are all areas needing significant improvement.
“Cutting costs by laying off people will not fix the problems and create a competitive economy. It could in fact do the opposite if the result is social unrest.”
Increasing taxes will create further corruption, unemployment, business failures, mortgage defaults and bankruptcies.
For those same reasons a devaluation will cause pain with little gain and will deliver a severe blow to our ‘national brand’.
The Barbados reputation for conservative, prudent, financial management has been decimated. Lost reputations are difficult to recover.
We must now focus all efforts on becoming competitive in all aspects of national affairs.
Innovation in areas such as new export services sectors (creative industries, education, sports, health, bioscience, ICTs, professional services), food production and renewable energy, lower taxes, competitive performance-based salaries and wages, higher productivity, ease of doing business and service quality must all be part of the solution.
We must deliver much greater value across the board at lower cost.
Structural adjustment is not arithmetic. It’s about attitudes and behavioral changes.
Most important now is that we use this opportunity to invent a better National Governance Model (one not based on self-serving political parties). We need a governance model that can deliver a recovery and growth plan that will ensure the economy recovers in a sustainable way and that will protect against similar future crises.
“We have a potentially terminal case of Implementation Deficit Disorder”
Confidence is the key to implementation and acceptance of the needed tough adjustments.
Our weaknesses are multifaceted. Let’s acknowledge them openly and work to build a Just Society for the Common Good.
There is no room for hubris, arrogance,false pride and ignorance.
Barbados has all the attributes to be competitive but we are failing to combine them appropriately.
A small island of 166 square miles and a population of less than 300,000 people is very manageable and can be very competitive.
Let’s agree to hold hands and get the job done. We have the tools.
Barbados can be an example to the world of National Governance Innovation. To build a NEW economy for a new age let’s start with a set of National Values.
How about integrity, caring, openness, justice, enterprise, teamwork, selflessness?
We also need a fresh National Mission and Vision. We have not seen nor heard much of either in recent times. What do we want to achieve as a Country?
What is the status with our national Strategic Plan?
We need a National Vision that represents all people and to which we can aspire collectively and use to build our plans and measure performance.
Like so many other people I feel a sense of impotence. Everyone is concerned yet feel that they can do little or nothing to change the situation.
The extent of our problems and the opportunity we have to create an exciting future may possibly be best tackled now by a National (non-political) Team of trustworthy experts,both local and international. This Team should be given a specific mandate by Parliament and empowered,subject to Parliamentary approval, to recommend the new path.
In 2008 our late Prime Minister appointed such a group of advisors led by Winston Cox. Following wide stakeholder consultations a detailed action plan was submitted and approved. Regrettably many of the proposals were never implemented. We have a potentially terminal case of Implementation Deficit Disorder.
Working closely with the IMF we can set in place the right solutions for Barbados. Without the discipline imposed by an external agency such as the IMF it is very likely we will once more fail to implement. 2014 will be a watershed year for Barbados.
We must use this crisis to build a NEW National Governance Model that will make us competitive and that is for the Common Good and just Society and lives up to the promises of our National Anthem-Firm Craftsmen Of Our fate.
Peter N. Boos FCA
This letter was also published at Caribbean360