Barbados, the Caribbean’s newest republic, held a snap election last week. The ruling Barbados Labour Party (“BLP”) won all thirty seats in the legislature’s lower house, wiping out the opposition. This took even seasoned pundits by surprise – there had been murmurings that the government’s handling of the pandemic and the timing of the election could strengthen the hand of the opposition.
The victory means Prime Minister Mia Mottley will continue to dominate island politics. Looking ahead, a political strategist observed, “Mottley will use her last term to progress legislative changes to the Constitution and make sweeping reforms to the public sector which is too large in Barbados.”
“Mottley will use her last term to progress legislative changes to the Constitution and make sweeping reforms to the public sector”
Political strategist, Barbados
The country is one of the region’s more prosperous economies but even it has not managed to weather the Covid pandemic unscathed. The country is critically dependent on its tourism industry. Battered by lockdown restrictions, revenues from the sector have fallen by some 90%. This will hit fiscal policy hard.
A senior business executive in Barbados said, “Fiscal manoeuvrability will be tight, but the administration has done a good job in stabilising our finances because three and a half years ago, we were right on the verge of default, but the public purse was well managed.”
The business leader also emphasised other areas where the government has had notable successes including “ … improving the judiciary, hiring more judges, trying to move the Revenue Authority and other government services to a fully digitised system.”
But is the lack of any political opposition healthy for Barbados? The political strategist opined, “While Mottley won all 30 seats, we only had approximately 40-50% of the electorate at the ballot box. This is less than the previous election which was around 60%. This points to increasing disenfranchisement at a time when we need citizens to be politically engaged.”
The administration will be under pressure not to spend irresponsibly. The senior business executive said, “On the economic front, I believe we are going to have to increase VAT. Don’t forget, Barbados is still party to an IMF programme which stipulates that the government needs to run a 6% primary surplus. Covid has made that difficult. We will likely continue to run a deficit.”
“On the economic front, I believe we are going to have to increase VAT. We will likely continue to run a deficit.”
Senior business executive, Barbados
To better manage that deficit, Mottley will have to address Barbados’s ageing population – and increasing pension payments – through immigration among other measures. She also wants to attract more “digital nomads” to the island and lure back the Bajan diaspora – more feet on the ground means more revenue to the treasury.
The main opposition, the Democratic Labour party, which ruled Barbados between 2008 and 2018, campaigned against the BLP, characterising them as a “one-party state”. Whilst the party was weak and ineffective in opposition, they do have a point. Mottley runs the risk of losing public goodwill, for the moment, substantial and sincere, if Bajans start to feel that legislation and policy is simply imposed rather than debated.