SAVING BARBADOS FROM RECESSION (PART 5)

At the very core of the plan to save our country from recession must be a strategy to re-energise production in Barbados’ agriculture, construction, manufacturing and tourism sectors!

It goes without saying that we have to be realistic and practical, and that we must therefore start with the enterprises and production capacity that currently exist in these four crucial sectors of our economy, and bring to bear state sponsored initiatives that will lift them to higher levels of performance and cause them to multiply.

The state sponsored initiatives that we have in mind fit into two broad categories.

The first category would consist of efforts by the governmental administration to establish a close and intimate ‘partnership’ between Government and these four sectors - a ‘partnership’ in planning; a ‘partnership’ designed to literally invent comparative advantage for enterprises in these four sectors by extending to them a wide range of incentives, priveleges, assistance and institutional support; and a ‘partnership’ in ensuring that the plans jointly constructed by Government and the representatives of these sectors are carried out and actualized.

The second category would consist of a governmental programme to make available long term credit at extremely low interest rates for productive investment in agriculture, manufacturing, tourism and construction. Essentially, we are talking about farmers, hoteliers and manufacturers being able to secure loans for productive investment in their enterprises at nominal interest rates of 1 or 2 per cent per annum!
When we speak about a ‘partnership’ between Government and these four sectors of the economy we are contemplating a relationship that is much more profound and intimate than the Social Partnership or than the manufacturers association or the Chamber of Commerce meeting with the Minister of Finance and presenting him with a wish list two or three weeks before the annual Budget presentation!

Rather, we are talking about a process of intimate and institutionalized planning, in which the two parties routinely sit down together and work out in detail an expansionary and developmental strategy for each sector, undergirded by the deliberate and conscious use of the formidable power of the State.

In the Peoples Empowerment Party’s 2008 general election manifesto we provided brief sketches of the developmental prospects that exist in these four productive sectors of our economy. In manufacturing, for example, we visualized a range of possibilities for Barbadian manufacturers in such fields as garments, furniture, metal fabrication, food and beverages, office equipment, scientific and medical instruments, solar technology, pharmaceuticals and plastic goods, provided the state played a leading role in encouraging, directing and supporting the relevant initiatives.

Limitations of space would not permit us to provide similar outlines of the prospects in agriculture, tourism and construction, but these details may be found in the PEP's 2008 election manifesto, and they all hinge upon a process of joint planning and the articulation of state support and power.

We now turn our attention to a possible source of financial resources to be used by the Government in providing long term credit at nominal interest rates.

The most obvious source is Venezuela’s ‘Petro Caribe Energy Cooperation Agreement’. If Barbados was to participate in and to purchase its petroleum supplies under this arrangement, we could convert almost one-half of our annual petroleum expenditures into a 25 year loan at a nominal interest rate of 1 per cent per annum. Our Government would therefore be in a position to utilize this deferred expenditure by using the freed up funds to make sound long term loans to local farmers, manufacturers and hoteliers at a similarly low interest rate.

Once the loans made by Government are sound loans which will be repaid to the Treasury over a period of years, there will be no danger of a national accumulation of debt!

This helpful Venezuelan offer has been available to us since 2005 and we have failed to take it up. If it is that we do not intend to shift our petroleum purchases from Trinidad & Tobago, then we should at least be pressing Trinidad & Tobago to extend similarly attractive credit arrangements to us!

With such planning and credit provision mechanisms in place, Barbados would be in a position to forge ahead with such new developmental initiatives as:-
(1) Substantial investment in collectively owned national agro-processing facilities designed to exploit the commercial and export potential of our locally produced ground provisions, fruit, vegetables and fish;

(2) A new thrust in "Cultural Tourism’, centred on properly developed locally owned hotels and guest houses that radiate the unique culture and hospitality of Barbados and Barbadians;

(3) A major investment in the retooling of our manufacturing sector, and the provision of critical international market research services for export oriented enterprises.

(4) A major ‘national’ lower income housing construction and urban renewal programme that pulls together and synergizes inputs from the Ministry of Housing, National Housing Corporation, National Insurance Scheme, the Credit Unions, Churches, Mutual Funds, Insurance companies, the trade unions and building contractors.

(5) The facilitation of the overseas expansion of Barbadian companies that possess the potential to spread their wings beyond the confines of our island nation.