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DE RUEHWN #0025 0112133
ZNR UUUUU ZZH
R 112133Z JAN 08
FM AMEMBASSY BRIDGETOWN
TO RUEHC/SECSTATE WASHDC 5991
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 1858
RUMIAAA/HQ USSOUTHCOM J2 MIAMI FL
RUMIAAA/HQ USSOUTHCOM J5 MIAMI FL
RUEHCV/USDAO CARACAS VE

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