Dennis Jones is a Jamaican-born international economist, who has lived most of the time in the UK and USA, and latterly in Guinea, west Africa. He moved back to the Caribbean in 2007. This blog contains his observations on life on this small eastern Caribbean island, as well as views on life and issues on a broader landscape, especially the Caribbean and Africa.







**You may contact me by e-mail at livinginbarbados[at]gmail[dot]com**

Thursday, January 17, 2008

New Prime Minister sworn in: Some issues to consider

Barbados' new PM, David Thompson, was sworn in on January 16, and gets ready to lead a (Democratic Labour Party) DLP government for the first time in about 15 years. He has not yet named his Cabinet.

Yesterday's events were clearly filled with pride for Mr. Thompson and his family. (Pictures courtesy of the Nation.)

The country is moving onto a new political era. The electorate's desire for a change of government is reflects many things, personal to voters and philosophical for the nation. The sense I have from living here for nearly a year is that a new government will be expected to deal with a number of important and sensitive issues.

First is the broad issue of accountability and governance. I will not go into the details of what legislation is needed but Barbados needs to impose on its elected officials a "code of conduct" that shows clearly that public life is not about personal gain. As part of the process of maturity the time has come to ensure that information about the source and size of politicians' personal wealth should not be taboo; and it is arrogant of any politician to think that this is not for the public domain. In the conduct of government business the public also needs greater assurances that government financial and physical resources are properly used and for general public purposes. A public accounts commission needs to be effective and take ministers and public officials to task for the misuse of government goods and services. I have no information that any politician is corrupt, but my personal belief is that no politician should even be associated with that suspicion.

Second is the issue of mature discussion and decisions about the country's economic future. The DLP were voted out in the mid-1990 after the country went through a calamitous set of economic problem and had to seek financial support from the International Monetary Fund a period that stands as a dark cloud over this island's proud history. However, this is a terrible time to come to power, especially leading a small nation that has few means of making its own way in the world.
  • A global recession may be near; and certain financial crises have the potential to make it more difficult for individuals to find resources for luxuries (and that may affect tourism--see below). The USA, that major economic neighbour to whose currency Barbados has fixed its own, has seen the value of its dollar plummet over several years. Barbados has been obliged to adjust to that with very few options. It has brought certain benefits, not least in making it cheaper for British and Canadian tourists to visit and have a jolly time on the island. But it means that the Barbadian dollar buys much less and with the bulk of goods being imported has been one of the reasons behind higher living costs, a subject that ranked highest by far (over 50%) among public concerns a shown in polls ahead of the elections.
  • Oil, upon which the country spends the bulk of its foreign exchange, has seen a wild rise in its nominal price over the past few years and flirted with the magic number of US$100 a barrel just a few days ago. Barbados can hope that oil exploration generates a big find, but even so it would be years before it comes on stream.
  • Tourism, on which the country depends for most of its foreign exchange, is a very fickle industry, and one that has become very competitive. It's not clear to me that Barbados has really developed a product that is competitive and I feel that the industry will face some stiff tests if the dollar regains some strength and if the world economy's growth slows. As mentioned above, it may also be adversely affected in the near term by the impact of financial problems in developed countries that are likely to greatly reduce or limit households' freely disposable income.
  • Finally, the country will have to deal with the legacy of Cricket World Cup. My view is that this was not a stellar success in any sense for the region. Barbados might have done better than most countries out of the event, but it has a huge potential millstone around its neck with the costs and possibly few really good uses for the new stadium. I would have been impressed had I seen or heard about a clear set of plans for Kensington Oval after the cricket, but it seems that there is just scratching of heads to come up with ideas. That is not how you get the best out of an investment.
Other issues will raise their heads including how the country can deal with its sense of being overrun or taken over by "foreigners" and whether the population is at one over the Caribbean Single Market and Economy. It will be a tough time to have the mandate of national leader, but I wish the new PM and his government all the very best. You have what you wanted so now do well with it.

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