By Dr Isaac Newton

Minister of finance and economy, Harold Lovell took several hours, to outline the United Progressive Party‘s (UPP) vision for repairing the economy, two weeks ago. The minister’s speech reflected political Campbell Soup, full of ABCs for the gullible. It did not tackle the major economic hurdles facing the nation. Every facet of the budget implied that unmet social needs will loom larger in the next 18 months.

Dr Isaac Newton is an international leadership and change management consultant and political adviser who specialises in government and business relations, and sustainable development projects. Dr Newton works extensively in West Africa, the Caribbean and Latin America, and is a graduate of Oakwood College, Harvard, Princeton and Columbia. He has published several books on personal development and written many articles on economics, leadership, political, social, and faith-based issues.

A strategic recovery plan should embody principles for transformational decision making, and fiscally creative priorities for action. It should be a tool for the government, to respond to local needs, and to adapt to the new circumstances of the changing domestic economy and global market.

I decided to dissect the budget on the merits of its revitalizing potential. I sensed the minister was trying to communicate that something must be done. Something must be refigured. But, how to ‘fix the flaws’ was not made clear. The budget presented more opportunities for private gain over public enhancement. It contained fewer openings for higher efficiency and prudent management. Ironically, the budget served as its own critic, against the status quo.

Given the political climate, Lovell was on the mark in trying to garner widespread support for his recovery program. But the budget was ideologically contained in risky initiatives that will result in long-term social break down. With this trend, Lovell will find himself outside the circle of love.

Strategically, the public expected the minister to deliver a life-saving, recovery plan. But the 2010 budget underlying principles seem outwardly focused, not inwardly empowering. Whereas Lovell provided a selective historical review that identified financial mistakes of past administrations, he failed to account for a specific set of corrective actions that the UPP government pursued, to spur economic growth within the last six years.

I had high hopes that the 2010 budget statement would have stayed clear of last year’s unparalleled miscalculations (former finance minister Errol Cort). Flanked by promise and despair, there wasn’t any significant break from the 2009 budget statement except that the IMF’s prescriptions, served as its guiding light. The numbers and forecast were crystal clear. They failed to identify new and diverse job creation to match the direction in which the economy is going.

Promise

Nonetheless, the budget offered at least three sanctuaries built around pragmatism:

It highlighted plans to install better regulatory mechanisms within the financial sector. This is critical to avoid negative sanctions and cautionary red alerts. Antigua and Barbuda (A&B) suffered gravely, in light of the Standard fallout. If the nation is going to move from the black, to the grey, to the white list, stringent internal scrutiny and transparent tax data exchanges must be enacted. The harmonizing of local financial regulations and institutions within a single/central regulatory regional framework is perhaps the way to go. This will communicate more forcibly, that A&B is not a safe haven for unsavory investors.

Vital to its institutional, legislative, and structural undertakings, the UPP indicated that it will reform its statistics division. The complication of statistical data and the exchange of methodologies between institutions are critical to evaluate local market conditions. For too long, A&B has not used credible statistics as its eyes in its planning and decision making processes. If these reforms encapsulate the different roles of the private sector in data collection, they constitute a step in the right direction.
The desire by the government to establish a credit guarantee scheme to support small businesses is well meaning. By generating finance and economic activity while cementing its relationship with participating financial institutions, the government can help small businesses access more cost effective financing, thus increasing their chances of weathering this economic downturn.
These areas of promise however, indicate that the people should not take the beacon of hope for granted or underestimate the crisis ahead.

Despair

The budget deficiencies indicate a recovery pathway from the outside in. Lovell touted possibilities for foreign investments while detaching them from a strategic marketing profile designed to attract reputable investors.

In A&B, foreign investments have provided much needed jobs. Some investments folded due to inadequate regulatory oversight, and others did not encourage significant entrepreneurial spin off initiatives. The minister did not show how potential investments would bring felt prosperity, with the goal of vibrating specific sectors of the economy. The need for new job explosion and innovative local, regional and international investments was recognized. But the precise vehicle to achieve this overarching goal was only vaguely put forward.

On the issue of agriculture, Lovell did not go far enough. He provided tax relief for the purchasing of local produce. But this gesture would not expand the agricultural sector with significant ripple economic effects. In tough times, I expected the minister to begin the process of establishing mechanisms for food security and food independence. Investing more in agriculture would have led to standardized guidelines for local consumption and distribution, which would minimize unhealthy food import.

Most unfortunately, Lovell held up the IMF’s austere recommendations, as the watchdog for the government’s fiscal responsibility. This is a death sentence for proposed social programs. I was surprised that the government was not proactive in instituting a policy of meeting its financial obligations on time, especially in this depressed season. Despite the IMF roving presence, the economy is underperforming far beneath last year’s estimates. Yet, the gap between the government’s expenditure and revenue remains too steep for comfort.

A precondition to financial health is curbing expenditure to match revenue. In A &B’s case, this involves a delicate downsizing of the public sector balanced by an aggressive expansion of the private sector. A clear strategy of mitigating joblessness and mobilizing resources for investments did not come through in the budget. Plans aim at balancing the budget over a reasonable time frame was equally inadequate.

There seems not to be a dawning recognition that a single mother struggling to make ends meet is likely to view the 2010 budget as multiplying hardship and destroying sustenance. The government’s plan to subtract over 40 food items, from its tax shelter bracket would reinforce sentiments of widespread poverty. These items are basic food supply that the working poor, the dying poor and the poor rely heavily upon. I am left to wonder, what went so mournfully wrong with the preparation of the 2010 budget?

Conclusion

Those looking for glittering gold will walk away with a fistful of ashes. The 2010 budget did not hide our troubles. It simply did not show us how to fix them. It offered instead piecemeal recommendations. We know that the call to leadership accountability in these tough times will not produce easy answers. But we should at least expect the minister to deposit durable solutions. Yet, Lovell’s ‘patriotic response’ to domestic needs was short on homegrown remedies. As it stands, the budget needs a miracle to achieve articulated goals.

Overall, the sweeping measures that were recommended did not suggest a serious commitment to innovative economic growth nor reflect expenditure priorities that invite sustainable prosperity. Rather than the budget being done, it left the nation undone.

The 2010 budget projection point to a thousand setbacks. But our collective faith demands something of action from all of us---fearlessly reaching into the future by overcoming our present challenges. We must continue to be engaged with our larger mission in mind, of honoring our past achievements, and ‘believing in the impossible dream.’