Posted on

Coming to terms with our economic reality

Share

I am pleased to see that the debate about our economic reality is beginning to touch on some of the serious issues that many of us have avoided for quite a long time. I make reference here particularly to the Vincentian editorial of last week and to Nilio Gumbs’ piece in last week’s SEARCHLIGHT entitled “Managing small states: It’s not easy.” For too long we have avoided some of the real issues and have skirted around the realities of our economic situation.{{more}} While this is happening we have once again gotten a taste of our Prime Minister’s love – hate relationship with the IMF, that schizophrenic body that “tends to underestimate the performance”. We are warned that “… if anybody say -0.4 percent for this year say that is the IMF estimate and our actual numbers are that we are having growth of 0.8 percent.” Our Prime Minister disagrees with the IMF figures since figures from the local statistical office and the Eastern Caribbean Central Bank point to a positive growth. (By the way, out of which hat did the IMF pull those figures?) It doesn’t matter, however, because the IMF doesn’t run this country. Our PM, however, glories in the applause given to his government for its commitment to provident macro-economic policies and its intention to generate primary fiscal surpluses in the range of 2% of GDP by 2016 and to avoid external commercial borrowing to ensure debt sustainability.

As one has grown to expect our Prime Minister puts a positive spin on anything and conveys the impression that this country is doing much better than it is actually doing. After all, according to the report in the SEARCHLIGHT newspaper SVG performed better “than the average of all the ECCU member states for the two-year periods which stood at 3.55 percent and would have performed better than the individual countries except Dominica and St.Lucia.” After all of that, he interjects a notion of caution for “…everything is not rosy; my message to you is about the challenges and how we are going to meet those challenges.” But in order “to build capacity to withstand shocks such as those felt thus far, needed a special people and a special leader.” One assumes that the special people were those sitting in the audience, and, of course, the special leader was the one addressing them and making that declaration. So should we worry once we have a special leader surrounded by a special people? This year’s budget will perhaps be the most carefully looked at and debated one for some time. That should give us a picture of the real state of things and the road our special leader will be taking us.

Let us, however, get behind the political posturing, and for this I turn to Nilio Gumbs and his discussion of small island states and their management. Gumbs introduced some issues that have to be central to any discussion of our economic situation. While it is true that we are victims of the global economic downfall, Gumbs argues that many of the problems small states face are of their own making. He lists some of the shortcomings that are responsible for that; Placing political expedience over economic prudence; Our leaders have created a system of political patronage resulting in the wastage of scare resources as cost/efficiency is not the overriding consideration in tendering process- if such is ever held.” He argues, too, that a few of our leaders have created “…a rapacious culture of dependency which amounts to nothing more than wholesale bribery where poverty reduction programmes have been transformed into instruments of vote buying rather than social intervention.” Gumbs goes on to make the point that some of our leaders have “marginalised a large segment of their populace because of their perceived political disloyalty, which only leads to a loss in productivity and output in such micro states.”

He continues by referring to the ‘irrational exuberance’ of one Caribbean leader who “in his quest to rewrite the wrongs of history compensated estate workers deemed to be exploited by a colonial planter class.” In trying to point out the policies of some of the governments in small islands states that have helped to create the economic mess we are experiencing, he states that “one Caribbean Island has shown that you do not need to have oil money or be rich to shower or hand out money to at least one-third of the population.” Clearly, I agree with the issues raised by Gumbs since I have always made the point that while acknowledging the global economic situation, we have to judge our politicians by the manner in which they utilise the space that is given to them. And this is really how we have to judge our leaders. Gumbs’ article dealt with small island states and made particular references to the Caribbean countries and leaders to which many of these will apply. He, however, singled out a Caribbean leader and a Caribbean country in building his argument that many of the economic problems encountered by small states are of their own making. I am glad that Gumbs has taken pains to identify some of these problems because we have been avoiding them and pointing largely to the global economic situation as being primarily the cause of our economic downturn. This needed to be put on the table to provide a better context for any discussion of the economy.

The editorial of last week’s Vincentian touches on the drainage caused by the building of our airport. It states, “…we have become preoccupied with channelling whatever foreign aid we have been able to attract into the multi-million dollar airport construction project, selling this undertaking as a seeming panacea, a guarantor of future economic growth.” The editorial sees the private sector as vital to any effort aimed at “returning this region, this state, to any semblance of productivity and competitiveness.” What that editorial needed to add is that the government will have to create the environment that will stimulate the private sector and allow it to play the role that it should play. This includes government getting out of activities that can better be done by the private sector, while not allowing the market to function totally unregulated. The other dimension that has to be continually emphasized and which that editorial and last Tuesday’s editorial in the SEARCHLIGHT touched on is the regional dimension, the need to tackle our economic issues as a region rather than as individual countries. Hopefully, others will take their cue from these and the debate on our economy will become richer, and we will begin to look beyond the platitudes that parade as serious debate.

Dr Adrian Fraser is a social commentator and historian.

LAST NEWS