Our economic realities must be grasped by all

28.JAN.11

The 2011 Budget debate in the House of Assembly is expected to wind up today.

No matter what we as a people think of the management of our affairs, the first reality that we must let set in is that our economic situation is grave. Whether some of our neighbours are better off or worse off than us is besides the point, for except for Trinidad and Tobago with its petroleum reserves, every other CARICOM country faces very serious economic difficulties.{{more}}

External factors, specifically the state of the global economy, are at the root of this, but how one reacts to these difficulties and prudent management of scarce resources has important bearing on what progress a country makes and the degree to which the needs of its citizens are satisfied.

The sobering realities of life in 2011 are best reflected in, first of all, the reduction in the size of the Budget. This is not the first time this has happened, but many of us have gone along all these years thinking that the size of the Budget dictates its efficacy. Even up until last year, the claims of “biggest Budget ever” were used to indicate supposed progress. The danger is that if one uses such a yardstick, the contrary would apply in relation to the reduction in the size of the Budget. Neither is necessarily true and can help to mask a correct analysis of our situation.

In the 2011 Budget, the Leaders on both sides of the House, the Prime Minister and Leader of the Opposition, were at one in pointing to such facts as the reduction in growth rates, the severe impact of the British American Insurance/CLICO fiasco, the problems increasingly faced by the National Insurance Services and its implications for pensions and meeting its obligations, and rising petroleum and food prices globally. They were not at one in the approach towards solving these, just as they differed on issues such the management of the economy, the state of employment and unemployment and the Budget deficit.

The pity is that the nature of Parliamentary politics and political practices in our country as a whole do not make Parliament the best place to arrive at national consensus as to the way forward in such trying circumstances. Clearly, our country is in dire need of investment, foreign and local, in order to generate employment; and is required to provide greater levels of resources than ever before, both to meet the needs of the elderly and indigent, as well as to match the expectations of the young and upcoming.

Prudent, resourceful, innovative management of our scarce resources is today more vital than it has ever been. But all of this must be premised on an increasingly knowledgeable, aware, alert population. Our economic realities must be grasped by every citizen, for charting these perilous seas successfully would depend not only on the skill of the captain, but moreover on the cooperation of all the crew and the degree to which they, too, understand the waters through which they must pass. That may prove to be our biggest challenge.