An interview with Erskine SANDIFORD, Prime Minister of Barbados
My particular objective is to have balanced
After several years of various ministerial responsibilities
in the government of the Democratic Labour Party, Erskine Sandiford became
Prime Minister and Minister of Finance and Economic Affairs of Barbados in June
1987, following the death of his predecessor Errol Barrow. He had been Deputy
Prime Minister for almost a year. Since then he has presided over the highest
rates of economic growth Barbados has known. In this interview with The Courier,
he talks of his objectives.
· Prime Minister, Barbados ambition, as revealed to
The Courier nearly six years ago in an interview with the then
Prime Minister the late Tom Adams, is the achievement of a standard of living
more or less comparable to that of western Europe within 10 to 20 years.
Are you on course to achieving that objective?
- There are certain situations which relate definitely to hopes
and to ambitions, but these have to grounded in terms of what are the realities
of the time - and also they are influenced by certain imponderables and
uncertainties over which a country has no control. And if you are a very small
country with limited resources, you tend to be a taker of situations,
particularly economic situations, rather than a creator or influencer of those
situations. And I think that is where Barbados finds itself. We have been
improving our standards of living and, given a beneficent set of
conditions they will continue to improve. We will certainly hope that this
will mean better prospects for our people and better prospects for the world. So
we are working along the line of continued improvement in our standards of
living. Realistically we have a long way to go to catch up with Western Europe.
· Tourism continues to dominate the economy. Your efforts
at diversification have paid dividends. Are you satisfied, though, with the pace
- To be satisfied may indicate a certain measure of complacency.
I do not think that we are satisfied, we always believe we can do better even if
we have had considerable progress in terms of tourism and in terms of the
diversification of our economy. My particular objective is to have balanced
growth in the economy based on some leading sectors, but one that is not skewed
unduly in one direction because we believe that a balanced growth, and a
balanced economy are the best objectives for a developing country to aim at. So,
while we note the growth that we have made, and this has been significant, we
believe that there are areas in which we can improve both tourism as well as the
other sectors; for example, we believe that there is scope for a better push in
terms of our agriculture and there are certain adjustments that we have to make
in that particular sector; our food import bill is high, and our exports are low
compared to our imports. I think there is much scope for growth and development
in the areas of agriculture and fisheries. In the area of services we have had
some successes and we believe that there is more scope here for development. So
I just mention those as areas in which we believe that there are opportunities
for Barbados to develop further.
· One area where you have also been very successful is
offshore business. Notwithstanding the treaty between Barbados and the United
States, how serious do you view current US concern on the laundering of drug
money and the possible effects it could have on offshore banking in Barbados?
- Barbados is, I believe, well positioned and poised to be a
financial centre - a business centre - whereby those who see possibilities in
that area can combine their business with rest and recreation and get a mix that
is generally not too readily available in the high-pressure situations of modern
cities. We believe that we can use our resources and endowments in that
particular regard to develop as a financial and business centre, and the results
to date have been encouraging. But we are not a tax haven, and we are not aiming
to attract, we certainly do not encourage, any shady types of operations. We try
to keep in place quite stringent rules and regulations, and procedures to avoid
as far as possible any activities and enterprises which may remotely be
concerned with the laundering of ill-gotten gains. So, we are interested in
· Wages in Barbados have risen far beyond productivity in
recent years, clearly a disincentive to foreign investment. What measures are
being taken to relate wages more to productivity?
- The major resource in Barbados is our people. We are not
richly endowed with a diversity or a super-abundance of the minerals or other
resources which constitute the more desirable trading commodities on the world
market. For us it is our people and I think it is quite natural that people
should seek through their unions to get the greatest possible return for their
input into the productive process; it is for all those who are in management, in
government, in the unions themselves, to realise the basic fact that
productivity and wage settlements must have a direct correlation and if the
wages aspect of it outstrips productivity, then the competitive nature of the
goods or services that we produce would be lost, and the goose that lays the
golden egg would certainly disappear. So I think what we have been seeking to do
on all occasions is to moderate the demands and the aspirations of our people
for standards of living that may not be immediately attainable, or attainable in
the short term. And, you notice, that I am somewhat more modest than others in
my projections for where Barbados will be positioned by 1992 or thereabouts as
far as our standards of living, compared with those of Western Europe or
elsewhere, may be concerned.
· So the idea of a wage freeze, as is being suggested in
many quarters, is ruled out?
- My government and I havent spoken about any wage freeze.
What we have spoken about is ensuring that labour gets a fair share of any
increased productivity which means that if we have a growth rate of 3 %, no one
should expect to get wage increases of 30% because that bears no relation at all
to increased productivity. So we believe that when a product is manufactured
there are certain inputs to it and there must be certain returns for the factors
that make up that product. Now we have not spoken about a wage freeze but wage
policies which relate such remunerations to the level of productivity.
· You are appealing to the good sense of the trade unions.
If you really want to prevent wages escalating beyond productivity, as they are
now, wouldnt it be necessary to have a kind of incomes policy backed by
- We do have an incomes policy that is based on keeping wage
settlements in line with productivity and this is done within the framework of
collective bargaining, because we are committed to free trade unions and
collective bargaining activities and the right of workers to get together to
promote their interests. But as a government we have to look after the national
interest. Our policy is to reconcile any conflicting demands through consensus
government which is our philosophy as far as this particular area is concerned.
But if it becomes necessary pursuing that particular objective, we will not
hesitate to take the actions that are necessary if the demands are
unconscionable or if they are way out of line with anything that is affordable.
Where demands are such that they will have some deleterious effect on the
economy generally, then we will take whatever action will be necessary to
protect the general welfare.
· For Barbados, the World Bank has advocated caution on
foreign borrowing, given its present debt situation. 1989 was a particularly bad
year in terms of repayment and servicing. How great, though, is the pressure to
borrow more abroad to finance the 1988-93 Development Plan?
- The World Bank quite wisely cautions developing countries
about excessive borrowings because if your borrowings are high, that is a
commitment to present and future generations to repay and you can only repay out
of foreign earnings; and if the terms of trade are adverse in respect of the
products that the developing countries have to sell, then that can create a
further problem down the road which is at the root of the debt problem. The
terms of trade are adverse in respect of the returns on the primary products and
other goods that are produced. Sometimes there are difficulties in getting the
semi-processed or manufactured products into the market even where there may be
provision that they can be admitted; the legal framework may be different from
access. So the developing countries still have a major battle to fight in terms
of what they receive for their primary products and then also access for the
processed products. I think developing countries should not have to wait for the
World Bank to tell them that this is a problem or to be warned against it. But
the situation is that most of the countries have committed themselves from past
years to investment programmes that required considerable foreign investment,
some of that investment coming from World Bank sources, other sources, and from
multilateral agencies as well. And so what the countries find themselves doing
is paying back to the multilateral agencies and to the private international
banks sometimes more than they are receiving. This is a dilemma that countries
have to face.
In the case of Barbados, there are requirements for public
sector borrowing and our requirements relate not only to the servicing of
existing debt, which has been built up from past years, but also for maintaining
some kind of economic infrastructure and economic activities to help service
that particular debt and to maintain standards of living. As far as Barbados is
concerned, most of our debts are to the multilateral agencies and those are the
ones which indicate that there is very little or no rescheduling; most of the
rescheduling programme has been limited to the private institutions. But we are
very responsible here. If we go to the market, its because that is the
source which we have to tap in order to deal with our problems; we seek to
manage our debt and our borrowings in a responsible way.
· Sugar continues to prove uneconomic to produce.
Isnt there a case for phasing out its production in favour of non-sugar
- Barbados believes in both the private and public sectors; we
have a mixed economy and the sugar industry is largely a private sector
operation. We believe that the individual agriculturalist takes the decision
whether to remain in sugar or not. Our cost of production of sugar is high but
we produce a good product. We do not process that product, we sell it as a raw
commodity, and largely as sugar and its by-products of rum and molasses. In that
regard it is not very much different from the situation in a number of
developing countries where they produce the raw materials which are sold in the
markets mostly of developed countries - industrialised countries - and then they
are processed there and sold at much higher prices than are paid for the raw
material on the grounds of the value added. That is the reality of international
We believe that there is a demand for sugar, we believe that it
is a good product, it is one of the most important products traded. We have been
producing this particular product for centuries. We have built up a knowledge
and an expertise in sugar. We believe that the plant, the grass that is the
sugar cane, is now well adapted to our environment and it serves as part of the
conservation efforts as far as our soils are concerned: it is, for us, a good
product. We believe also that being a natural product, it has much better
prospects for the nutritional good of people than some of the artificial things
that are being produced. We believe that if used in moderation, as anything else
should be used in moderation, there are good prospects for it and we will seek
to maintain a niche for sugar both in terms of our local needs as well as in
terms of maximising our earnings of foreign exchange from it.
· The Grand Anse Declaration proposes a Single Market for
the Caribbean, a very laudable proposition. Is there enough political will in
the region to see this come to fruition?
- I believe that if you look at our past experience, the answer
would be no. We have been talking about various forms of cooperation and
integration over the past three centuries, almost from the foundation of the
colonies in this region. We have gone from colonial status to independence most
of the countries in the Caribbean - but we still have this problem, built up
over centuries, of the diversity and particularism of the different territories.
In a way this is good. Each person having been nurtured in a particular
territory develops strong ties and patriotism, and love of country and so on for
that territory - and that is good. I believe that that should be, not a source
of weakness, but a source of strength towards building the new Caribbean.
Barbados is committed, and I am certainly committed, to closer
integration in the Caribbean. There are ways and means, mechanisms and devices,
whereby the particular insular or territorial interest of the separate entities
can be combined with the overriding economic, social, political and cultural
imperative of working closely together in a world that is developing into blocs.
So in terms of Barbados, and in terms of my own hopes for the Caribbean, yes I
am committed towards the development of a closely linked integrated movement in
the Caribbean. It is something we have to work toward. It is not going to come
in 1990; it is not going to come in 1992 like Europe, but I think it will come.
· But what are precisely the briefs of the Ramphal
Commission other than widespread consultations?
- It is not just widespread consultations. It is to take a very
broad look at the Caribbean and where we go as a people, taking into account our
past history, our resource endowments and our place in the world. In other words
it is a think-tank that is drawing upon the expressions of opinion and
viewpoints in all of the territories of the Caribbean, putting these together
and coming up with a broad set of recommendations in terms of where the
Caribbean will position itself, the kinds of challenges it will have to meet,
the possibilities and the realities of the situation; it is a very important
work that has to be done.
· What are Barbados views on the Single European
- Barbados view is that the people of Europe have spoken
and they believe that they need a Single Market. I believe the imperatives of
the economic and political situation indicate that the countries of Europe,
which have been in conflict with one another from time to time, should seek to
develop a larger market so that economies of scale and whatever other advantages
may come from them, should lead to the development and improvement of Europe as
an entity. I have no quarrel with that. If the Europeans wish that for
themselves and for their betterment, that is their decision. My concerns have
been that, in seeking to achieve a Single Europe, the action should not be
inward-looking but should be an open arrangement that would lead to the
furtherance of world peace, to freer trade and to improvement in terms of
economic justice. It should result in a liberal beneficent kind of situation
that will give the world a lead in these areas.
· What is your assessment of cooperation between Barbados
and the European Communities through the Lomonvention? What impact has it had
on the development of Barbados?
- The Lomonventions, the current and the previous ones, have
all been very complex documents. We believe that these are important instruments
to regulate the economic and social relations between Barbados (because you
asked specifically of Barbados) and Europe - and by Barbados, you can read other
developing countries of Africa, the Caribbean and the Pacific. I believe that
those Conventions representing, as they do, the distillation of high bargaining,
many late night discussions and much give and take and compromise will never
satisfy all sides. From the point of view of Barbados, we would hope that some
of the problems that are being encountered, from one particular Convention to
another, will be ironed out over time. But, as indicated before, we are
supportive of the Conventions. We believe each one of them has provided an
improvement on the previous one. They are by no means near perfection as far as
Barbados is concerned but I believe that they are steps in the right direction.
The Lomonvention provides a framework within which economic and social
development can take place.
· Apart from the trade provisions and the Sugar Protocol,
what do you think of the grant element?
- Grants do not constitute a very important element of the
relations among nations, and certainly in terms of Barbados the grants are
minimal. It seems to be a disappearing element in the economic relations among
countries, and Barbados encounters the argument that we are one of the
better-placed developing countries because of our per capita income - a middle
income developing country - this presents us with some difficulties. But having
said that, there are some grants which are provided and we seek to make use of
those grants. If we can get through the difficulties of rules and the
bureaucracy and so on, that tend from time to time on both sides to prevent
quick disbursement, it will be a very welcome dimension. I must say that as far
as Barbados is concerned we have had a good working relationship with the
European Delegation and personnel here in Barbados.