A call by Barbados Prime Minister Freundel Stuart to his Democratic Labour Party supporters not to “jump ship”, and advice to voters to rally once again in the party’s support, suggest that he is beginning to feel confident that the difficult days of economic reform for Barbados are coming to an end, and that his party can begin the task of pulling back those alienated by the harsh economic policies which his government, on the advice of the international financial institutions, has felt it necessary to pursue since the last elections of February 2013.
Prior to those elections, the economy of the country had been experiencing negative growth in a context of persistent stagnation, during which period the government felt itself to have little recourse but to go through the phases of an IMF-type programme, while resisting any temptation to devalue the country’s currency.
And clearly, now, Mr Stuart must feel that with the threat of devaluation, a matter deemed by both his party and the opposition Barbados Labour Party to be unacceptable, apparently out of the way, and the major initiatives towards economic reform taken, he can appeal to his party’s supporters to accept that an objectively reasonable basis for economic recovery has been established.
Yet neither the government nor the opposition, during the present term of office, have been able to ignore the severity of the economic situation, and the need for strong measures to remedy it, and it will probably be difficult for the Barbados Labour Party to convince the electorate that feasible alternatives to those undertaken were possible.
The Central Bank reported that in 2013-14, the fiscal deficit for that period was 11.3%, compared to 8% the previous year, and the debt to GDP ratio 70.2%, more than double what it had been five years previously. And in 2014, the unemployment rate had reached almost 12%, compared to the rate of 8% five years previously.
As reparatory measures have been taken, a substantial portion of the popular umbrage taken towards them appears to have fallen not simply on the government, but on the Central Bank and its Governor, Dr DeLisle Worrell. The Governor, an individual well-recognised in academic, international financial institutions and government circles, has insisted on the necessity for the measures, essentially those recommended by the International Monetary Fund, and he has continued to advance the view that they have been the only course of action possible. The consequence has been that the Central Bank has been exposed to a degree of criticism not generally experienced in Barbados.
The last general elections gave the DLP 16 of the 30 parliamentary seats, with the DLP obtaining 51% of the votes of the electorate to the Barbados Labour Party’s (BLP) 48%. So an assumption on the part of the BLP would be that the electorate is now tired of austerity, including a decline in employment, and would wish to have recourse to a better situation.
Yet, there would appear to be a general consensus that the measures taken by the government have been necessary, in the context of an apparently widely held view by the electorate that a devaluation of the currency was to be avoided at all costs.
While the DLP has been careful to follow this popular prescription (seemingly accepted by the BLP opposition) of maintenance of the value of the currency, feeling that it will redound to its credit, that must be weighed against some sentiment among the population that the time has come for measures aimed at a resumption of economic growth. And it would appear that the electorate will be concerned to see whether the measures taken in that direction will have the desired effect, at least by the time that the general elections come due in early 2018.
In 2014, the Central Bank indicated that over this period of harsh current economic and financial policy, the country should receive substantial investment “in tourism and infrastructure and other financial flows”, but there has been a certain degree of scepticism about this prescription. Yet there are indications that an interest in tourism investment by, in particular, the Sandals group lends some credence to it.
While there appears to have been a certain scepticism rising within the population about the imminence of the recovery, there also seems to be much doubt in the minds of the BLP opposition that any recovery can be substantial enough by the time the next elections are called, to satisfy the electorate.
Yet, the party, led by Ms Mia Mottley who succeeded Owen Arthur, generally recognized as having had a relatively successful tenure of office in economic terms, appears not to have made up its mind as to the extent of the likely impact (positive or negative) of the measures taken by the government on the basis of IMF recommendations, including the maintenance of the value of the currency, and whether they will have sufficed to meet the approval of the electorate.
On the other hand, however, the BLP, at a crucial time for concretising its opposition to the government, seems to have had some difficulty in consolidating its own ranks completely behind Ms Mottley. The display of a negative relationship between Mr Arthur and the BLP leadership appears to restrict the party’s efforts at full-blown resistance to the DLP, though there does not seem to have been any public estimation of the cost of the split, even though Ms Mottley appears to have the substantial support of the party.
So the state of political relationships within the BLP would appear to be likely to have an impact on the minds of the voters, even though they may not be completely satisfied with the results of the DLP’s policies. And there are increasing signs that Minister of Finance Chris Sinckler will be playing a substantial role in the conduct of the general elections, his own reputation being obviously at stake, underpinning the appearances of the relatively dour Prime Minister Freundel Stuart.
