Identifier
Created
Classification
Origin
08BRIDGETOWN25
2008-01-11 21:33:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Bridgetown
Cable title:  

BARBADOS BUSINESS CLIMATE ON EVE OF ELECTIONS

Tags:  PGOV PREL BB XL 
pdf how-to read a cable
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UNCLAS BRIDGETOWN 000025 

SIPDIS

SIPDIS
SENSITIVE

SOUTHCOM ALSO FOR POLAD

E.O. 12958: N/A
TAGS: PGOV PREL BB XL
SUBJECT: BARBADOS BUSINESS CLIMATE ON EVE OF ELECTIONS

UNCLAS BRIDGETOWN 000025

SIPDIS

SIPDIS
SENSITIVE

SOUTHCOM ALSO FOR POLAD

E.O. 12958: N/A
TAGS: PGOV PREL BB XL
SUBJECT: BARBADOS BUSINESS CLIMATE ON EVE OF ELECTIONS


1. (SBU) SUMMARY: With Barbados' elections slated for January 15,
pundits have been speculating the post-election business climate.
Many have settled on a wait-and-see approach as they claim that the
economic climate will only take shape after the election results are
known. Others predict that whereas the ruling party victory will
likely maintain its outward focus on regional economic integration
and growth, the opposition will likely shift inward toward a more
domestic-focused economic model. Regardless of the victor, there
will be significant pressure to address the rising cost of living in
Barbados, which appears to be the most debated issue so far. End
summary.

Campaign issues
--------------

2. (U) Economic issues, particularly government spending and cost of
living, have been a major focus in the current electoral campaign.
The Opposition Democratic Labour Party (DLP) has sought to highlight
cost overruns by the incumbent Barbados Labour Party (BLP)
administration. On the other hand, the BLP has sought to focus on
their strong, 14-year economic track record, as well as the
ill-fated 1991-1994 DLP administration that introduced structural
adjustment policies.

Budgetary Predictions
--------------

3. (SBU) The Government Fiscal Year begins on April 1, with the
budget usually debated in March. With elections only two months
before, there are concerns that the ruling party would be unable to
make drastic changes to fiscal spending. However, a leading
journalist told PolOff that the DLP may use this opportunity to set
its policies and reveal new legislation during its first year in
office.


4. (SBU) One renowned Barbadian business journalist told PolOff
that, if the BLP administration returns to office, current capital
projects should continue. However, he believes that it is highly
likely that this will be done with budgetary belt-tightening.


5. (SBU) The DLP has promised a complete audit of government
projects if they win the elections. However, as pointed out by the
journalist, this might lead to the cutback or closure of some
projects and a rise in unemployment, resulting in decreased demand
and a rise in price control measures. Senior business officials are
concerned that current spending will not be maintained, resulting in
budgetary controls to both public and private spending, as well as
revised taxes and tariffs, if the opposition DLP takes power.

Employers Fearful
--------------

6. (SBU) A senior official of the Employers' Confederation told
PolOff his fears that the state of business will become more
difficult for employers, regardless of who wins the election. The
Confederation sees the introduction of promised minimum wage
legislation by both Parties and the increased power wielded by the
labor unions as detrimental to employers' rights in the coming
months.

Ruling Party on Defense
--------------

7. (SBU) COMMENT: The short time frame between the elections and the
budget debate will most likely result in insignificant change to
current economic policies should the ruling party win the elections.
However, pressure from the opposition has placed the ruling party
in a position where it will have to defend its current spending
habits and regional-focused economic policies. Constituents for
both parties have made it clear that the rising cost of living is
becoming a strain on households and that tangible improvement of
this situation should be the first order of business for whichever
party is elected. END COMMENT.

OURISMAN