Asset Rich and Cash Poor

ASSET RICH & CASH POOR

How serious is the government about changing direction and digging Barbados out of this hole. The year’s estimates debate disappointed because it did not present a way forward. Rather it was another in the series of the game ‘tell us what to do?” as was played in the last election so that the gov’t can use words to make false charges and create fear as was done on the issue of privatization. Yet we see an indecent and desperate haste to dispose of national assets in ways which is not driven by a wholesome philosophy or a thoughtful strategy, but rather will end in a rape of the country. This will injure the future of our youth. The disposal of Light and Power shares went to a single entity giving total control over the energy grid and thus stymies the future broad participation of young Barbadians in the alternative energy sector. The proposed sale of BNTCL to one entity creates an unnecessary monopoly that disadvantages the ordinary Barbadian as energy costs will soar unbuffered by gov’t policy to protect. This exposes business and households to the blast of inflation in relation to food, electricity and transport further deteriorating the viability of businesses, push job losses higher and increase stress on households as the cost of living rises.

The assets are held in trust and policy manages these assets – water, transport, energy, sanitation, ports, health in a way that ensures maximum access to all, and if organised around a profit motive ensures broadest participation so it widens the wealth base in the country while retaining some policy control to protect the social policy side. Ownership is the last phase of the economic maturity of a people. Our trajectory started from slaves, and moved to the opportunity to get work; then getting fair wages and conditions; then job protection and opportunity for fair advancement. The final phase is ownership where wealth is created. This is extremely beneficial to the society, as it promotes a sense of ownership and vested interest in the well-being of enterprises and the functioning of the country. Families then have wealth to pass to their children and provide a base from which they can pursue their best life. Worker-owners will gradually change their attitude to work and raise their productivity.

Why has this coming of age on wealth taken so long. Barbados is finding itself in a perfect trap where our people are risk averse; resent others buying companies or state assets but are not prepared to invest themselves; and currently the gov’t is failing to advance this wealth-owning strategy by selling our assets in a way that is damaging to our well-being. We have a gov’t who when in opposition opposed and incited the public to not participate in public offerings of the family silver; and in office have delayed taking quick proactive steps, and now under pressure is selling our silver in the worst possible way, below value and offering no opportunity for brad base participation even if just via credit unions, and insurance companies.

Our strategy for the way forward should address first the issue of investment training to be included in our schools at the tertiary level to build the knowledge and gradually shift the attitudes of people towards investment. Secondly we need a programme of support that helps to strengthen corporate governance in our enterprises to build public confidence in the stability of our local enterprises and provide technical assistance to help viable businesses to use the stock exchange as a means to raise capital. Concomitantly we need to provide incentives and ‘training wheels’ such as preferred shares and shareholder training etc to help Barbadians to invest on the stock exchange. Barbados does not have a lot of land and our enterprise base is small which are relatively closed shops. But the government state assets provide a meaningful avenue for persons not necessarily interested in starting a business to gain the opportunity to be owners via investment at state enterprises. The credit unions can encourage its members to form investment cooperatives which empower members to get involved in opportunities to own state assets. This puts domestic savings capital to use for the benefit of the citizens in achieving wealth, it puts our capital to improve our country which gives value to all citizens.

It is time to move beyond using divestment in an emotional fashion to score political points and dumb down the population. A responsible government in the position of this current administration should develop a serious policy and bring the necessary legislation to assist potential holders of capital to participate in ownership. To date we have not done ourselves proud in this matter but we can change this in the future and do better in leading our people.