CHALLENGING TIMES

Aug 26, 2015 Editorial

For a week the budget debate has tested the boundaries of truth, honesty and Parliamentary decorum and while the approval of the estimates is in the homestretch, the public must be told of the economic and fiscal reality facing the country, and must be prepared to make the necessary adjustments.
No one can deny that there are tough times ahead. With the passage of the 2015 budget, there could be no better time than now to point out that the government must come to terms with the fact that the sugar industry is essentially bankrupt and will remain so in the foreseeable future.
The current government must assess the impact of the sugar industry on the economy, evaluate the options available, and adopt the course of action most beneficial to the future well-being of the country and its people.
Those in authority need to level with the people on the challenging times that lie ahead and not raise the public expectations to heights that cannot be fulfilled.
While announced increases were deserved and welcomed, the government needs to be forthright. Unless it does so, it runs the risk of triggering a backlash similar to that incurred by the previous administration which had lost the confidence and trust of the citizenry.
This is not to say that subsidizing the sugar industry or providing subsidies or grants to other industries, necessarily have to be cut.
However, the government’s fiscal and economic policies ought to be clearly laid on the table, since logic would suggest that the country will be severely tested if it has to continue supporting the non-performing industries indefinitely.
This will no doubt put a severe dent in the country’s finances and its economy. The reality is that something will have to give. The only question will be what.
Will the government bite the bullet and solve the problem it faces or merely nibble at it? Where will it find the resources to meet all its financial obligations, given the fact that the price of gold continues to fall on the world market, and the bauxite industry is barely surviving?
Rice is the only other major source of foreign currency. In addition, the country’s imports far exceed its exports and if this continues, its foreign reserves will decrease sooner rather than later. So the only answer would be to borrow which of course will only increase the already unsettling debt.
The public can rest assured that whatever strategy is adopted, it will not please everyone.
This is why it is so important for the government not to build-up unrealistic hopes and it should prepare the people for some level of downward adjustment, especially since the country’s GDP has fallen below one percent and is likely to dip lower.
The people are not ignorant to the challenges that lie ahead; but what they would want to know is whatever burden has to be shared is done equitably and in proportion to the capacity of the respective sectors to carry it. It should not be carried by the people alone.
However, before any fiscal adjustment is made, the government’s first move should be to eliminate whatever wastage exists, reduce unnecessary expenditures and improve efficiency.
The coalition government can cushion the impact by increasing revenue and eliminating the large losses caused by poor management and corruption, as most recently evidenced by the alleged unlawful activities involving several government vehicles following the change of government on May 11, 2015.
After all, it will take time for the government to tackle and solve the tough issues, including a definitive decision on the sugar industry. These are indeed challenging times.

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