Caribbean & Central America - February 2013 (ISSN 1741-4458)

Barbados will hold a general election on 21 February, with the Barbados Labour Party (BLP) under former prime minister, Arthur Owens, seeking to oust the Democratic Labour Party (DLP) government led by Prime Minister Freundel Stuart. The usual pattern in Barbados is for political power to be held in lengthy alternating spells by the two main parties, but this time the DLP faces a struggle to secure a second term in power.

The DLP’s difficulties are not surprising. It came to power in 2008 with a 20-10 seat victory (later enhanced by a BLP defection) only to face the consequences of the global financial crisis. In the introduction to the DLP’s report on its 2008-12 performance, produced for the election campaign, Stuart says that the DLP came to power in January 2008 expecting to govern “in circumstances that were normal”. In the event, he added, “we were going to have to govern in the worst economic and financial crisis the world has seen in about 100 years”.

Nevertheless, Stuart argues that the DLP has governed well in the circumstances. He points to a “stable economy”, which moved from a 4.0% contraction in 2008 to 0.8% growth in 2011. In the same period, the fiscal deficit came down from 9.1% of GDP to 4.7% while maintaining public service jobs.

The DLP’s election strategy appears to be to argue that it has governed as well as it could have in the circumstances, and that there is no alternative. Following a downgrading by Moody’s in December, Finance Minister Christopher Sinckler said that Barbados must “stay the course on its fiscal consolidation programme” and that “to attempt to introduce counter-cyclical fiscal measures to stimulate domestically driven growth will reverse the gains made so far by the country to turnaround the situation and make matters much worse fiscally and economically.”

This is the key election battleground. BLP leader Owen Arthur told the party conference in October: “As the next government of Barbados we do not propose to simply return to the old policies or even the old familiar way of doing things.” In particular, Arthur attacked the IMF and its proposals for increasing VAT (which has been increased to 17.5% from 15%); the removal of tax-free allowances; new taxes on energy products; and “the pursuit of macro-economic policies to depress local demand, ostensibly to protect foreign exchange reserves…”

Arthur told his party’s conference: “There has to be a fundamental change in macro-economic policies being pursued by the government…an IMF-type model is unlikely to get the job done for us.” He pointed to BLP’s record of opposing IMF dictats when it came to office in 1994, and he said: “We seek office again to bring back a similar proactive can-do spirit to the management of our economic affairs”.

The essence of the BLP’s economic policy is to “go as far as possible, as fast as possible, to stimulate domestic economic activity in Barbados as part of the effort to put Barbados back on a path of growth and development”. Arthur is proposing a lower tax rate for middle-income earners, a reduction in land tax, and a reversal of the DLP’s energy pricing policies.

The DLP is also proposing a new constitution to coincide with the 2016 50^th anniversary of independence.