Barbados PM says spending cuts coming

Prime Minister David Thompson says cuts in government spending are just around the corner.

Thompson said Sunday that he had already advised his Cabinet Ministers that they will be required to find ways to reduce expenditure in their various ministries.

“I believe that at some point shortly we would be approving that adjustment of expenditure,” said Thompson, who is also Finance Minister.

But he said that there are certain “critical policies that you have to continue to pursue because they enhance empowerment, which is an important contributor to economic activity or they may be socially necessary”.

The Prime Minister’s disclosure comes against the backdrop of a recent International Monetary Fund (IMF) assessment of the local economy in which it recommended a number of measures that the Thompson administration could implement to ride out the economic downturn.

Among those recommendations is to continue to moderate wages to lower the public sector wage bill, sell government assets, broaden the tax base and raise existing taxes.

Opposition Leader Mia Mottley said she was concerned about the state of the economy under Thompson’s management.

“Enough is enough. I don’t think the issues were handled appropriately. It is clear the Barbados economy is on a knife’s edge. If we slip, we will slide,” she told a press conference on Saturday.

“The precarious nature of where we stand today must be a concern to all Barbadians.”

But Minister of State in the Finance Ministry Darcy Boyce said on a local radio programme Sunday that the decline in the Barbados economy is not out of line with what has been happening in other parts of the world.

“This is not a case that things are being run in a way that is totally out of control. We have to make a choice – in this situation do you contract the economy so much by holding your fiscal deficit down….and call it a retrenchment economy or do you…keep people going,” he said.

In the meantime, Thompson said he remains hopeful of an economic turnaround late next year, while at the same time he acknowledging that may not happen fully before 2011.

“We would expect that towards the latter part of 2010 we will see some improvement for Barbados. One has to make the distinction between the improvement in the United States economy, the European economy and then what happens to Barbados because there will be a lag for as many as two quarters for Barbados,” he said, adding that government was “planning for the worst but hoping for the best”.

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BLP column – New oil industry

AS BARBADOS PREPARES to launch a virtually new industry, every effort is being made to ensure that its economic contribution to Barbadians is maximised and the skills needed to drive this “new” industry are provided locally. In this regard, two recent announcements by Minister of Energy, the Hon. Elizabeth Thompson, are instructive. During the Barbados Offshore Licensing Round 2007 at the Hilton Hotel last week, Minister Thompson clarified a number of issues concering the impending offshore drilling project. She stated that a draft of the new legislation – the Offshore Petroleum Act and the Offshore Petroleum Tax Act – will be debated in the House of Assembly today. Fully cognizant of the challenges this new industry would have on our social capital, the minister indicated that Government would be making an investment in the training and education of Barbadians to ensure that they are in a position to supply the skills, goods and services to this sector.

When one considers the importance of the oil industry to overall production and the massive well-paying job opportunities available within the industry, one can understand why this Government took the bold decision in 2004 when it sought clarity before the international tribunal of its boundary delimitation with Trinidad and Tobago. Three years later a “new” industry is set to take its place upon the social and economic landscape of Barbados.

We speak of an industry with the economic potential to completely wipe out this country’s current national debt in the shortest possible time and make unemployment a thing of the past. With the success that Barbados is already recording from its current limited resources, this new industry will make the Singapore model look like child’s play.

We are happy to report that already 50 miles off Tobago, a well was sunk in which gas was discovered. However, further exploration will be carried out in this area. Licenses and bidding blocks consisting of specific areas for exploration have been set aside for local participation. In other words, Barbadians are not excluded. In addition, in the event that petroleum is discovered, Barbados stands to earn substantial revenue by way of royalties and taxes. To this end a development fund will be established to facilitate future physical and other social projects for Barbados.

But how did the prospects of such economic fortune befall us? We must give thanks to the Deputy Prime Minister, The Hon. Mia Mottley. It took political forthrightness to first convince her Cabinet colleagues of her intention to engage the government of Trinidad and Tobago. The magnitude of the legal preparation to enforce dispute settlement procedures under the United Nations Convention on the Law of the Sea (UNCLOS) was absolutely staggering. Her victory at the tribunal will long live in memory.

Barbadians will recall that in the heat of the debate between Barbados and Trinidad, David Thompson was heard to have said that the issue could have been resolved over a bowl of cou cou and flying fish. In the recent past he has sought to give the impression that Minister Mottley does little for her salary. We ask Barbadians what victories has Thompson ever won for us? What does he do now for the large salary he receives as leader of the misguided Democratic Labour Party? It is a pity that after more than 20 years of political failure at constituency and national level, Thompson still sees politics as a bloodsport.

Barbadians are asked to follow the debate today live from the House of Assembly.

Source:Nationews