Transforming The Economy In The Age Of Liberalisation: Mr. Owen Arthur Spoke

Former PM, Owen Arthur, has not let his time not being party leader and PM dull his appreciation of matters affecting the Barbadian economy, of which he is seen by many as the current master, position notwithstanding. He has also not lost his wit and ability to find the raw nerve, as the current PM and some journalists who asked questions would have found. But, all's fair in love and politics, and his kiss to Miss Mottley should not be ignored. [Photo from the lecture, courtesy of Bajan Reporter, http://bajanreporter.com/.)

Mr. Arthur had ample opportunities last night to strut his stuff as he gave a lecture entitled 'Transforming The Economy In The Age Of Liberalisation', at the Errol Barrow Centre For Creative Imagination at the University of the West Indies (UWI) Cave Hill Campus. Clearly, Mr. Arthur is a draw, as the full car park signalled that the centre would be 'standing room only'. He was eagerly listened to by a set of local dignitaries, who included Opposition Leader, Mia Mottley, as well as Cuban ambassador Pedro Garcia Roque. The auditorium had the feeling of a political rally as people cheered each dig at the current administration or hissed their teeth as figures how the economy had turned for the worse were listed. Groans were very loud when Mr. Arthur mentioned that the government plans to increase licences and fees.

The core of his lecture was to point out that current PM David Thompson's policies and his government's new medium term fiscal strategy were not "proportionate to the circumstances surrounding the crisis". He likened them to a vegetarian-turned-meat eater, who felt he had to revert to cannibalism. In looking at the crisis, its causes, effects, and possible solutions, he was especially concerned that little had been done by the government to take account of changes in world trade and business legislation that are already in train and would impact on Barbados over the next five year. They were especially the EPA with the EU, bilateral trade arrangements with Canada, and the need to bring national investment incentives into line with WTO guidelines. While the recession was wreaking a certain havoc, these other factors would also wreak damage when and if the recession is past.

In fairly clear language, Mr. Arthur, stressed that the current government was leading Barbados on a catastrophic path, economically, socially, and in terms of regional integration. The country needed immediate and urgent fiscal solutions because the private productive sectors and households of Barbados are facing catastrophic failure. To support that he gave an array of financial and economic statistics, including that which showed that the private sector is getting strapped for cash (reflected in its falling domestic bank deposits). That, while the public sector looks set to contract sharply: as evidence, he cited the medium term objective of an overall budget surplus by 2015. All of this would "bear heavily and adversely on the structure and performance of our economy."

He criticised the current government's apparent fetish with economic indicators and for what appeared to be taking moves from the IMF's play book, which he characterised as austerity based. Mr. Arthur noted that policies intended to correct fiscal problems could easily, and inadvertently, lead to more vulnerabilities like a deeper recession and rising unemployment. "The trade-offs, therefore, have to be carefully measured and calibrated," Arthur said.Overall, he felt that a counter cyclical approach to crisis was needed to ensure future development.

He gave a stunning array of data and I'm sure that no one could follow it all, but it showed his mastery of the finance portfolio. But his vision for Barbados came through without numbers. He was ready to pay a levy to ensure that future generations had access to tertiary education: one graduate per household was too conservative in his view. That said, he argued that Barbados needed to educate better for the next step up the development ladder: he saw that as being more 'knowledge based', so that the country could produce more competitive people on an international stage.

He talked passionately about regional integration. Barbadians who went to Panama to help dig the canal gave the country a big boost to help develop a middle class. In like fashion, it was churlish for the current government to ignore the role Barbados played in giving other countries in the region the chance to pull themselves up by taking in its workers and the same time keep its own economy thriving--a win-win situation, in his eyes. Citing the current PM, he wondered what would have happened if Guyana had taken an anti-Barbadian attitude in years past. In addition, he saw moves such as that by OECS countries to build common governance structures as the way to go, and Barbados not being part of that could later come to haunt the country. Linking to structures such as ALBA would not bring about a solid regional presence for Caribbean countries. On trade, he pointed out why CSME was important to Barbados, who exported over 50% of its goods and services to the Caricom region.

Mr. Arthur stressed the need for measures to bring industry up to the best international standards and cited how that had already been done by Mount Gay, much to his great personal satisfaction. He also stressed how Barbadian companies needed to gain regional strength before they could tackle a wider international field, citing how the Barbados Mutual Life Assurance Company had developed to being eventually quoted on the London Stock Exchange as Sagicor.

He dealt well with questions and questioners, however, one wants to interpret dealt. One journalist who was criticised for always having it in for the BLP, got short shrift when asking about the legacy of debt left by the BLP. Mr. Arthur listed the developmental assets that had been left by taking on that debt, and asked what could the current government show for the "mind-boggling" increase in debt over the past two years.

One questioner tried to sweet up Mr. Arthur by asking if legislation should insist on future PM's being trained economists, and certainly not mere accountants. Citing George Bernard Shaw, he remarked "If all economists were laid end to end, they would not reach a conclusion." I must say that I snickered: people seem to think that having an economist in charge of a nation's financial affairs will bring success, yet the world is littered with economic catastrophes in countries that have been led for years by economists. As Mr. Arthur said, it's important to have good advisers. To put it another way, an economist-leader can often be his or her own worst advisor.

There will be much to take from the speech. It should not be lost on many that this economic tour de force was made by a former finance minister, but not by his party's current Parliamentary spokesperson on economic affairs, Miss Mottley. It was clear that Mr. Arthur has no intention of disappearing from the current political scene and it was manifestly clear that this speech had elements of an economic manifesto. For what purpose? There, dear Watson, we will have to think hard if not long.