At the end of the day, it’s all about foreign exchange, because if you don’t have enough, or if it’s slipping through the Treasury’s coffers like sand through the hourglass, your economy is heading for a brick wall.
So the entire basis on which Prime Minister & Minister of Finance David Thompson’s budget was presented last Monday was on an expectation of continued, if slower, growth this year for the Barbados economy, and due to revenue inflows for real estate and capital projects, of an actual increase in the Net International Reserves at year end.

Barbados’ GDP growth is projected to slow somewhat to between 2.0% and 2.5%, noted the prime minister, and next year we could be seeing declines in both long-stay and cruise arrivals.

Looks like next year is going to be tough.

So, in the meantime, in announcing the impending storm, Mr. Thompson has decided to batten down the hatches of those least able to help themselves, and to pay the bill by increasing annual fees on professionals as well as “sin” taxes, and the cost of licences relating to financial institutions, vehicles, bars and restaurants.

Borrowing a phrase I read last week, it seems that the prime minister realises he has no time to lose and is therefore going to implement these measures with a “heightened mobility” in weeks to come.

The phrase comes from a quote attributed to Roger Hercules, said to be a member of the ZR Association, who complained that the PM was treating the PSVs “like dogs” (NATION, July 9, page 39A), by abolishing fares on Transport Board buses for school children and further threatening to ban them riding on PSVs entirely if the ‘minibus culture’ did not clean up its act.

Concluded Mr. Hercules: “What we will have to do is fight to get what we want...We create such a heightened mobility that the Transport Board would not be able to match it. The prime minister has decided what he will do with his buses and we will decide what we will do with our units. It is as simple as that.” (My emphasis.)

To quote the Phantom of the Opera when he realises that Raoul is now his competitor for the hand of Christine: “So, it is to be WAR between us.”

The ZR commentator’s ability to coin such a pithy phrase proves the point that all writers already know: It is a Herculean task.

I dwell on this bus fare abolition initiative because it showcases the almost Zen-like ability of David Thompson to sometimes do a simple, organic thing in the economy which achieves multiple goals at the same time, sort of like pitching a flat pebble on the water and creating a long-pulsating ripple effect.

It highlights not only the almost artistic way he fashions policy using ordinary materials but also the way this approach to governing could change the entire economic landscape in the coming years, hopefully for the better.

Whether it works or not, it indicates to me a whole new way of thinking about the economy and social interaction than we had grown accustomed to under the previous administration. Then, it was all about the numbers and percentages, a push-pull system that seemed so precise on paper, but eventually led to the massive social impotence of the Arthur administration which, I think, brought it down. What seemed like brilliant management of the economy by careful pruning and subtle shaping of tax measures later looked more like ceaseless tinkering and use of taxation as a punishment which did not fit the crime, as in the case of the Notorious Mr. C.E.S.S.

But like a gift that just keeps on giving, the abolition of TB bus fares for school children does the following:

It reduces the cost of living for thousands of families, said the PM, by about $400 per year (one child, one bus per day to and from school), or $750 (one child taking two buses per day to and from school)

It boosts the image of the Transport Board in the community as student-friendly, and while it will cost the Board (of course, more buses may have to be found and therefore more fuel and other operational costs incurred) there is no administration cost (printing of special tickets, etc.)

It sends a powerful economic and social message that PSV intransigence to its negative impact on the community at large will no longer go unchallenged

It reclaims government’s social responsibility to see that those on whom it spends so much to educate arrive at school in a more settled frame of mind and thus more accessible to receive that education (Caution: you may need to put monitors on the buses to keeps spirits at manageable levels of youthful enthusiasm).

Another Zen-like initiative, assuming the money is actually segregated and used for the purpose, is to plough back the new $4 per month cell phone tax into textbooks, and still another was to raise all of those annual road taxes and other fees, long in need of raising if only to keep up with inflation, and use the money to pay weekly or monthly recurring stipends to those least able in society to help themselves.

However, as I noted at the start of this article, none of this re-carving of the economic pie will be sustainable in years to come unless our economy is bringing in more foreign exchange, and while he might get away with it once, the prime minister would actually do serious harm to the economy is he added on $100 million, or even half of that, in new taxes per year on the backs of any class of society. The new revenues will have to come from abroad, otherwise the impact on inflation would be much too great. Yes, that $104 million will be inflationary, but if used in the ways prescribed, the positive of saving many who can’t help themselves from drowning in the rising tide of recent inflation should far outweigh the negative of a slight increase in prices for the rest of us.