Barbados Economists Consider Government Proposals for Economic Renewal

Priorities, timelines not made clear – Nation News

Barbados Economic Society (BES) president Dr Simon Naitram is concerned that Government’s proposals for economic renewal are so vast that it will “take an enormous effort” to get even half of them done.

The economist is therefore advising the Mia Amor Mottley administration to establish a clear list of priorities “based on which policies will generate the largest benefits to Barbados, rather than simply picking the low-hanging fruit first”.

His view about the vast nature of the policies and programmes outlined in the Throne Speech were shared by economist Professor Emeritus Michael Howard.

The former University of the West Indies (UWI) lecturer said not only was the Speech “too long and overburdened with details”, but there were “a myriad of things to be done without a feasible and definitive timetable”.

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Naitram and Howard, however, told the Sunday Sun they agreed with the decision to suspend the debt reduction portion of the Barbados Economic Recovery and Transformation (BERT) programme for the next two years.

Main concern

Giving his assessment of the Throne Speech, Naitram said the main concern with the plan as outlined “stems from the sheer breadth of the policies proposed”.

“A Government in a small country like ours necessarily has limited capacity to implement new policies. It will take an enormous effort on the party of the Government – both elected officials and bureaucrats – to get even half of these things done.”

The economist, who lectures at UWI, Cave Hill, added it was clear from the economic plans announced that Government continued to pick tourism as its “preferred horse”.

“The Government is assigning $300 million to the BEST (Barbados Employment and Sustainable Transformation) plan, intended to support the tourism industry. In contrast, $70 million is being assigned to an Industrial Transformation Fund. Fund Access and the Trust Loans Programme are getting a combined $30 million to support small entrepreneurs,” he observed. “It is unclear whether this choice of how to allocate funding is because the Government sees tourism as our way to a brighter future, or whether it is simply because we have already invested so much time, energy, and money into the tourism industry.” Naitram said the conditions to be imposed on the BEST plan were critical to instigate significant structural change in the tourism industry, and he believed Barbados “cannot continue to socialise the losses from tourism while privatising the profits”.

“We cannot continue to leave the ownership of our largest industry in the hands of a small elite. And we cannot continue to promote a tourism product that has little to do with the lifestyle of Barbadians. These are key areas of change which the BEST plan can demand in return for the taxpayers’ enormous financial support,” he said.

“The fiscal costs of this plan are high, and the question has to be raised about the sustainability of a tourism industry that requires near permanent Government support.”

While noting that the jobs created by the 12-month COVID-19 Relief Programme would be beneficial, Naitram found that “the only real concern with the project is how it will be scaled back once the 12-month period is over”.

He also pointed to some “critical elements” that the BEST was recommending to be prioritised.

These were “an emphasis on digitisation of Government services, new ways to finance business, eliminating barriers to doing business, and a clear look at new immigration policies to boost our human capital and population size.

“We hope these policies do not get lost in the pipeline. These proposals are critical to the success of the Government’s plan to make Barbados a modern and prosperous society,” he added.

$300 million plan

Regarding the economics of the Throne Speech, Howard said he wanted more details on $300 million plan, calling the sum of money “quite large in a time of uncertainty”.

“Although this industry is highly important, I would have liked to see details relating to the source of the funding for the programme, the specific nature of the contract obligations between the businesses in this programme and Government, and the obligations of workers.

“One wonders whether a plan like this would succeed in rescuing the tourism workers, given the possibility of a second wave of COVID in the major source markets. I await details before making further comment.”

Howard added: “Further, I do not believe it is possible for Government to give similar sums of money across the board to all other businesses. Government still needs to be mindful of the country’s scarce financial resources at this time, and the possibility of further economic decline.”

He said that debt reduction under the Barbados Economic Recovery and Transformation [BERT] programme could not be a priority now when “the Barbadian economy is in distress”.

“I agree with the decision to suspend the BERT plan with respect to national debt to give some elbow room in a time of uncertainty, and the suffering of many Barbadian people.

“Although structural economic diversification has been recommended for years, this is a medium-to long-term task, and cannot solve our problems in the very short run. We have to concentrate on our present realities,” he said

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[Photo – Barbados Parliament building – Loop News Barbados]

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