Notes Of A Native Son

Introduction: Barbadians are now coming to terms with the urgent need for fiscal discipline. But the recent public spat between Sir Hilary Beckles and Professor Michael Howard regarding Mr Howard’s call for a cut-back in student numbers at Cave Hill and Sir Hilary’s rejection of this as ‘anti-intellectual’ are arguments that are interesting, but both wide of the mark. First, by definition, it suggests that Professor Howard does not share his leader’s call for a graduate in every home. If that is the case, then he should make that clear. At most, Sir Hilary’s call is aspirational and not based on any strategic thinking since an overall increase in the number of university graduates in itself cannot be a good thing. There must be more to being a graduate than having a bit of paper. What is needed is a clear analysis of the quality of those graduates and their eventual contribution to the development of the nation. But even this is putting the cart before the horse since the first discussion should be on the role of a university in a developing society. As a teaching institution UWI has a long way to go; as a research body it is still at home base. It is this, rather than providing a growing number of semi-educated young people with worthless qualifications, that UWI should be concentrating on. Sir Hilary should put all his teaching staff on new contracts, which should include having peer-reviewed extended essays published annually, and a book at least every five years. In simple terms, many of the dons at Cave Hill are as under-educated as the students. Professor Howard is right on one thing, that the massive expansion of Cave Hill has nothing whatsoever to do with spread of education to young Barbadians and Eastern Caribbean people, but it is more a monument to vanity. If it is true that people can get in to UWI on GCSEs/CXCs alone, and without A levels or their equivalent, then that is scandalous. But the problem goes much deeper. It goes right to the heart of the need for radical reform of the educational system in Barbados. Why should a university have a top rate restaurant? Why is the cricket ground at Cave Hill a much better site than the National Stadium? More importantly, why is the bookshop at our only university so poorly served? Having not studied there, but being a former bookshop owner, and a regular visitor to the UWI bookshop, I can say with a certain amount of authority that the bookshop at Cave Hill is one of the poorest academic bookshops I have ever visited. And, much more, if it is a reflection of what is going on in the lecture halls, then we are in serious trouble. Once we have cleared the air on that, then of course we have to look at the cost of education as a percentage of GDP. At present we spend about 7 per cent of GDP on education; I believe if the long-term, post-independence objective is to grow our knowledge-base, then this is far too small. Government should commit itself to a gradual increase in overall spending every financial year to a reachable target of about 16 per cent of GDP. Which brings us back to the original question of fiscal discipline: the reality is that Barbados cannot afford to send 50 per cent of its school leavers to university, while at the same time develop the university to a top 1000 standard over ten years on the Shanghai rating, which is the very least demand the funding authorities should impose on it. The only way round this is by abandoning the idea of free higher education and introducing a policy of tuition fees. Two good models are the US and UK: fees paid by the state while the young person is studying and on graduating and getting a job then a steady repayment of that money. If that money is hypothecated, then it could be turned back in to education, funding future generations of students. Those young people who want to join the brain drain and work outside Caricom should be compelled to repay – or make proper arrangements to repay – the loan before leaving the country. This will leave the taxpayer contribution to education free to fund from pre-school to school-leaving age, improving the quality and re-arranging the management structure and curricula. So, while Professor Howard might be wrong on calling for broad restrictions on the expansion of higher education, Sir Hilary is equally wrong for suggestion the call is driven by an ‘anti-intellectualism’. Mr Howard’s idea is just bad social policy and macro-economics. By the way, what about a UWI research campus in London? This would be very attractive to London students interested in doing Caribbean-focused research degrees. Fiscal Discipline: I have said before, this government, indeed all the Caricom governments, seem to be sleep-walking in to an irreversible economic disaster the like of which we have not seen since Europeans wiped out the indigenous peoples of the New world. Despite the worst economic recession since the 1930s and may be even since the discovery of the joint stock company, and despite being unable to pay its bills, the government (and the leading corporates) still seem to be acting as if there will always be the Barbados we know and love. At some point, sometime soon, someone must convince the government that it must start cutting back on its exorbitant spending and hording hotels and land as if it is the only guardian of these assets. By now the government should have had a programme of a sustainable long-term deficit reduction, which should have at its heard the shedding of most, if not all, of those assets peripheral to carrying out the role of government and offering citizens a high-quality service. Anything else is a humbug. The great fear is that, like previous administrations, this government would be selling the family silver. But that is narrow thinking. The governments ought to think of new and inventive ways of dispersing of its unwanted assets, such as through workers’ cooperatives, social enterprises, worker-ownerships, the number of models are endless. The reality is that to reduce the mammoth public sector deficit the government must cut spending, increase taxation or generate inflation – or a combination of the three. It should also give serious consideration to decoupling the Barbados dollar from the greenback and allow the currency to float. While on the point, Barbados should campaign for a Caricom-wide single currency – the Caribe – thereby simplifying parity and making the money markets understandable for all Citizens. Government should also review its attitude to turning the 17 or 18 existing post offices in to basic retail banks, dealing with on-balance sheet savings, investments, mortgages, life and pensions and credit cards. Rolling out such a proposition could be done by providing office by office training with a ‘soft’ launch. With a cautious risk-management policy and a product development strategy, along with a sharp eye on capital, liquidity and leverage an independent post office bank will provide a service for small businesses that is not at present available. All this could be funded by selling the government’s shares in the moribund BNB. The reason for this, apart from the fact that it makes good commercial sense, given the geographical reach of the post offices and the simplicity of just installing up-to-date back office technology, is that if all the commercial banks on the island are answerable to Port of Spain or Toronto head offices, then they focus will not be on the Barbados economy and the needs of the local business sector, but the next memo or email from the suits at head office. Government should also impose tough new tax increases on alcohol, tobacco, unhealthy food stuffs such as sweet drinks, and motor vehicles, incentivising those vehicles which are environmentally friendly such as electric cars and imposing punitive taxes on 4X4 and other gas-guzzling vehicles. On the environment, the country is crying out for a massive recycling policy – a space that could be occupied by the NIS or BIDC - and an environmental protection programme. Churches and charities should be brought in from the cold and compelled to account for all their collections and other income and have it invested in a tax-free ethical investment fund. Government should also widen the savings and investments market through fiscal mechanisms such as tax-free periods or reduced taxation on certain products. For example, to encourage the development of a venture capital and business angel sector, government could introduce a tax structure for such approved enterprises based on the investment of taxed income, tax-free growth and tax-free drawdown of dividends for the first five years. Such a fiscal framework would encourage high net-worth Barbadians to work collectively to set up venture capital/business angel firms, thereby creating funding opportunities for small businesses and entrepreneurs and, in so doing, widen the job possibilities. Finally: One of the big public discussions in Barbados at present is the freezing of wages. But, like most things, it is only half baked. What the government should have done within days of coming to power was to freeze both wages and prices. Instead, it gave the civil servants a whopping pay rise, which they neither expected nor deserved, and then allowed the utilities to increase prices way above the rate of inflation. At the same time, supermarkets were raising the price of basic food stuff – most of it imported, of course - at dartboard prices. The result is that the impact on the poor has been frightening. So much so that those of us visiting the island – black and white - have wondered how local people could afford such prices. Had the government frozen prices on coming to power it would have been more just. And, as a bonus, by the time of the next election voters would have forgotten.
Hal Austin, London Feb 17