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through Ralph jemmott
The 1960s are considered the decade of independence. The Caribbean states, in relatively rapid succession, gained political sovereignty. It was good to be young and caught up in the turmoil of intellectual and pseudo-intellectual discourse. Young undergraduates dreamed of changing the world or at least the region.
Ideologically, we were inclined not to stray too far from the left of the center, for fear of being caught on the wrong side of “The Revolution” which some believed was imminent.
I recently came across a “New World” publication called “Readings in Caribbean Political Economy”. It contains articles written by a number of thinkers whose work was considered compulsory in the 1960s and 1970s.
An article by Alister McIntyre, titled “Some Issues of Caribbean Trade Policy,” examined the nature of regional economic dependence. He said that “political independence has not been accompanied by any parallel progress in the economic field”.
In fact, he said that in the 1960s, the Caribbean territories were described in a non-charitable manner by some commentators. as “beggar savings”. He quotes a major London newspaper which describes a West Indian delegation to Britain as constituting “a beggar’s opera”.
It is astonishing how much the regional economies have remained dependent more than fifty years later. But the reality is that we live in an increasingly interdependent world. At the time, we depended on foreign markets for the sale of commodities and access to capital.
Selwyn Ryan estimated that in Trinidad and Tobago in 1959 the imported share of capital formation was 53 percent. We are even more dependent today. With most of our eggs in the service basket, the Barbadian economy has become extremely dependent on tourism, which accounts for almost 40 percent of GDP.
In the global market, we remain heavily dependent on foreign capital investment and transfers for banking and financial services. In a number of articles, Harry Russell has pointed out how much we are in the grip of foreign banks.
He also hinted that we may not get as much tourism investment as we should and that much of the income stays overseas even as foreign investors seek generous tax and other concessions. Likewise, in a knowledge-based economy, we remain heavily dependent on foreign technical expertise.
Barbados remains a big importer of a wide variety of goods, including food, especially as we have developed a first-world mimicking lifestyle with an insatiable appetite for expensive foreign goods. A Canadian born in Barbados once expressed his surprise that everything you might find in a mall in Montreal or Toronto is now in Barbados. She warned that the Barbadians were living beyond their means.
Champagne tastes with mauby pockets have led to excessive indebtedness. For small developing states like Barbados, economic sovereignty does not exist. It’s easy to talk about rejecting the neoliberal capitalist order, but it really is the only game in town.
McIntyre distinguished between structural dependence and functional dependence. The first, which he defines as “the dependence which results from the size and structure of the economy”. This level of dependency, he says, “cannot be helped.” It is an existential reality.
Functional dependence, on the other hand, is a consequence of policies pursued or not, and is largely preventable if the right initiatives are followed. Of course, it is not always possible to know what constitutes the right policies that can guarantee the right results. There are two strategies that could help reduce Barbados’ current level of dependency. The first is the overwhelming dependence on fossil fuel imports and pre-replacement by solar and wind power.
Figures from the Central Bank show that Barbados spent $ 728.1 million on imported petroleum products in 2019, $ 16 million more than what was spent in 2018. We are working to change that, although this is rather slowly.
The second strategy is to produce more of our own food, in part to prevent the outflow of foreign currency. In 2018, Barbados’ food import bill was exactly $ 685 million, of which fruits and vegetables accounted for 10 percent or some $ 66 million. We can never produce all the food we eat. However, we must strive to produce food at a price substantially close to that of foreign imports.
It is clear that some businesses will continue to be the engines of Barbados’ economic growth. We are linked to tourism in which we have a comparative advantage and in which, in terms of infrastructure and otherwise, a lot has been invested. COVID and its variants may ultimately determine tourism outcomes. In this regard, we must be careful.
Despite the ostensibly outrageous assaults by the OECD and the European Union on blacklisting, we must continue to attract international companies.
It remains a major source of corporate tax revenue, amounting to some $ 612.9 million between April 2020 and March 2021. We need to stop talking about the ease of doing business and actually doing what needs to be done. . The pandemic has shown our dependence and vulnerability to external shocks. The reality may be that whether we like it or not, we may need to retreat from the high consumption lifestyle that we may be ill-equipped to support.
Barbados must make a living if the economy is to remain viable. We cannot continue to borrow, even when the terms are more favorable and apparently cheaper. Eventually, the creditors will come with a “call”. We cannot continue to be caught in a revolution of ever increasing material expectations. But no politician will tell the people. It won’t elect them and people like the Little Boy in Charles Dickens’ novel keep asking for MORE.
Ralph Jemmott is a respected retired educator.