All Eyes On The Economy

Eyes have been on economic issues a bit more keenly in recent days, as politicians and technicians have spoken openly about some of the harsh choices that face Barbados at the current time.

It is encouraging, therefore, that on March 1, the government's economic programme 'will be set out in detail' when the Minister of Finance hosts a Public/Private Sector Consultation on Economic and Related Issues, at the Lloyd Erskine Sandiford Centre, from 9am till 5pm. This will also be broadcast live on CBC TV8. The addresses will be from the Minister, the Central Bank Governor, on Economic Policy and Development, and Geoffrey Bell, an international consultant, on The World Economy: What Next? There will be presentations on The Response to Government's Strategy by the President of Congress of Trade Unions and Staff Associations of Barbados (Sir Roy Trotman) and by the Private Sector Association (Ben Arrindell).

I was heartened to read this morning a piece by Hal Austin, Managing Editor of the Financial Times, and a Barbadian, under the heading 'Public sector overhaul' (see Nation, page 8A). He makes the bold statement that 'Recessions are a period when good governments look microscopically at the way public services are delivered and seek innovative ways of improving productivity and efficiency'. My caveat to that would be to stress good, and to add should look. He talks about the efficiency of VAT as a sales tax and highlights shortcomings in tax collection and in tax payments, both of which reflect incompetence, but could also reflect malfeasance: my own working experience has unearthed many creative ways of not paying VAT and/or getting VAT refunds that were not really due. It's ironic that the same edition of the paper highlights how a 'glitch' has meant that the Department of Inland Revenue has just mailed out incorrect income tax refund cheques (see Nation report, page 5A): things like that have also been known to be shady, and a funky way of managing a cash shortage. Incompetence?

Finally, Dr. David Estwick, the Minister of Economic Affairs (and too much else to list), clearly feels that once the matter of wage freeze had been broached, he might as well tack on another thorn, and has stated to Parliament that the remaining properties within the 'controversial GEMS hotel chain' should be sold (see Nation report, page 3A). He noted yesterday that the GEMS parent, Hotel & Resorts Ltd. (HRL), which has benefited from Government loans totalling B$145 million, now had accumulated debt of B$229 million, while the book value of the properties was only B$74 million. That debt, he added, comprised a principal of B$160 million and accumulated interest of B$69 million, while it also owed the Barbados National Bank another B$2.3 million. A sad litany, indeed. In addition, Dr. Estwick disclosed that HRL had requested B$6 million in support from Government for this year because of the dire financial situation of what he termed "an ill-conceived project". In a time of crisis, he noted, this administration has to look for B$6 million - B$3 million in this supplementary resolution and another B$3 million in the next financial year starting April 1.The doctor recalled that it was the Barbados Labour Party, which, during a time when there was no crisis, started to sell off the GEMS properties, including Silver Rock, Worthing Court and Eastry House in 2005, and was looking for a buyer for the Savannah Hotel, Time Out and the Hilton Hotel. Time for some much needed surgery, dear doctor, is what I would say.