The share nature of the budgetary proposals and economic and financial measures presented annually by the Rt. Honourable Minister of Finance is such that the proper context within which the policies, programmes and plans of the Government for the upcoming financial year are outlined must be adequately explained to the general public to provide a basis for intelligent discussions of the contents of the budget.
Failure to adhere to this rudimentary principle could only lead to confusion on the part of all those with a keen interest in the policy debates and who genuinely desire to contribute meaningfully to national dialogue on the current and future state of affairs of the local economy.
But setting the proper context for the budget is apparently even as critical from the perspective of those actually making the presentations. And the basis for that inference is supported in many instances by recent budget presentations in several Caribbean countries, Barbados being no exception. For example, in his budgetary proposals for financial year 2011-2012, the Honourable Finance Minister in Barbados said this: “Barbados has its challenges but we are no worse off than any other country, and better off than most in the wake of the worse global economic and financial downturn in recent memory.”
Admittedly, I was shocked, to say the least, at that statement. Hence, I argued publicly that “unless the Minister of Finance has a somewhat vastly different framework that he uses to undertake comparative economic analysis, I cannot see how that particular characterisation of the current state of the Barbadian economy relative to other countries can stand the test of times.
In fact, even if I am prepared to give the Honourable Minister of Finance the benefit of the doubt today, I certainly have little choice but to disagree strongly with him when we take into account the medium and long term.” Today, I stand firm with sorrow in my heart because I was right then and time has proven so!
Why did I adopt that stance? In my humble opinion, an adequate response to the 2011 Budgetary Proposals in Barbados could not have been forthcoming without a proper contextual basis. That inference logically begged the following question: What was the proper context within which the 2011-2012 budgetary proposals should have been evaluated?
Sorry folks! I do not intend to answer that question in relation to Barbados. Instead, I will address the same question in reference to Grenada’s 2014 Budget which, by the way, was not yet presented at the time of writing this piece. And that decision of mine to pen the column just a couple of hours before the presentation of Budget 2014 by the Rt. Honourable Minister of Finance was deliberate. Can you guess why?
Let’s get back to the main point. To adequately address the critical question posed, one must make a comparison between the economic circumstances facing Grenada today and that which existed in the early 1990s when the country was forced to adopt its first home-grown structural adjustment programme (SAP) that subsequently stabilised the local economy, restored international creditworthiness, and put it back on a growth and development path.
Without delving too deep into the prevailing economic conditions then, it is safe to observe that in the early 1990s Grenada faced a severe economic crisis that featured weak government finances, high and unsustainable public debt, lack of investor confidence, and the inability to borrow especially on international capital markets.
Wait a minute! Am I confusing the economic situation in the early 1990s with that which exists in 2013? Absolutely not! You see, folks, Grenada’s economic woes are identical in many respects to those that existed at the time of the first SAP during the 1990-1995 period. And that similarity in the economic climate in the early 1990s and 2013 provides the proper context for the measures that should have been announced in Tuesday’s budgetary proposals by the Rt. Honourable Minister of Finance.
Specifically, the budgetary proposals should have contained bold, but creative measures, to grow the economy and reduce current expenditure more so than anything else. No amount of revenue-raising policies will resolve the problems the country faces on the expenditure side. That simple conclusion is the plain truth!
Hence, given what we have been told thus far, I expect our Prime Minister and Minister of Finance to miss the financial and economic boat during his budgetary proposals! Consequently, Grenada’s economic troubles would not have been helped much by the proposed measures in Budget 2014 and that would be a real shame!
You, my friends, have heard the budget presentation and all of the proposed measures. Was I right?