The Tribune

By NATARIO McKENZIE

Business Reporter

nmckenzie@tribunemedia.net

MOST Caribbean countries cannot sustain their existing size of government, a regional economist telling Tribune Business they needed to look at facilitating greater investment across the region.

Clyde Moscoll,economics spokesman for the opposition Barbados Labour Party (BLP), led by former prime minister Owen Arthur, told this newspaper that governments in the region should step back and allow for more private sector involvement.

In comments that could easily apply to the Bahamas, he said: “Most of the economies in the region can’t sustain the existing size of government. It does not mean getting rid of people; it means simply getting better value for the dollar spent.

“There are statutory boards that you have to look at in terms of functioning. There are some where, for example, the government sets certain agencies to market. In the Bahamas, the truth is the private sector should be involved intimately with that process - not only in terms of dollars but decision making - so government could start to step back and allow for that money to be better spent.

“Eventually you are talking about reducing government’s role, getting more value for money and looking at the efficient way that can be derived. There can be several methods for divestment.”

Mr Moscoll, a speaker at the 22nd annual Caribbean Acturial Association conference, said Caribbean countries need to come together to foster greater CARICOM interaction,cooperation and facilitate greater investment across the region.

“We have made some errors in the past,” Mr Moscoll said. “We want to be a region yet we still want to determine who travels where. The reality is if we get the pie bigger by great CARICOM interaction, greater education and better governance, it means you can have a larger pie that can be shared.

“The existing pie cannot be shared the way we want it to be shared. The truth is cooperation is important. You don’t have to run to the more developed countries. What the more developed counties have to is to facilitate investment and other things across the region that will keep people where they are.”

The key to tackling the growing fiscal deficits facing many Caribbean countries, Mr Moscoll said, was economic growth. “You have to produce an environment that accommodates business facilitation. You have to get the cost of certain elements, energy, right,” he added.

“If these costs are right then they facilitate a platform for investment. Once that growth is created the government gets its revenue. In the last 10 years or so economies have not grown sufficiently to allow government to grow its revenue base, so what government has done is increase tax rates in the depressed economy, which is burdensome to the middle class,” Mr Moscoll said.

“You want those people to spend. When you have to choke them off via taxation it compromises your economy. Ultimately, the only way out of this predicament is growth, and that growth cannot be confined to a country but must be about growing the wider economy in the region.”