Tag Archives: Central Bank of Barbados

Caribbean Capital Reserve a Total SCAM

Submitted by Due Diligence
Bajans must be alert!

Bajans must be alert!

Thanks for the heads up on the CCB alert about Caribbean Capital Reserve. Thanks also to Hants for encouraging me to dig deeper than just posting the bio for Sir Jimmy from the CCR website. Barbadians are known for having short memories, the recent eruption about lack of transparency in the Cahill Waste to Energy project is a good example.

On further reading of  http://www.caribbeancapitalreserve.com (CCR) (click on link at your own risk), and CIBC FirstCaribbean’s website, I found that the CCR site is built around stuff cut and pasted (and edited) from CIBC FCIB’s site.

In BU’s post BLP and DLP Political Germfare on April 3, 2014 at 6:55 PM  David commented – “The Central Bank has likely alerted the authorities. If they have not they would be less than a good regulator.” In case – and this is a strecth – they had not connected the dots between CCR and CIBC FCIB, DD took up the Central Bank on its invitation to provide information on this entity; and advised CBB about the cut and pasted stuff from the CIBC FCIB site.

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Central Bank of Barbados: Political Tool or Facilitator of Economic Development?

Submitted by the Mahogany Coconut Think Tank and Watchdog Group

We are not a bit surprised that former Governor of the Central Bank, Sir Courtney Blackman is blaming both the Barbados Labour Party and the Democratic Labour Party for the current financial woes. We are also not surprised, that the current Governor, Dr. DeLisle Worrell, is saying that the existing financial sector stymies or does not support innovation and creative enterprises. In layman’s terms it really means, that those citizens with startup enterprises, cannot get them financed.

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Notes From a Native Son: Has the Central Bank Failed to Give the Nation Any Direction on Economic Recovery

Hal Austin

Hal Austin

Introduction:
The governor of the Central Bank appears quite clearly to have lost all sense of balance as far as the local economy is concerned. Not only has he been in office for the last five years or so, he is yet to come up with a publicly available reasoned and detailed plan for rescuing the nation’s economy from the situation it is in. His recent obvious confusion about the constitutional role of the Central Bank adds further to the confusion. Even local journalists are confused.

Dr Worrell’s reported U-turn on a policy announcement – a veiled criticism of the government, then claiming the government was on track – was but the latest in a series of embarrassing episodes. But first, we must get the legislation right. The Central Bank Act is irrelevant to the new financial architecture post-2007 and the new global regulatory paradigm. I said before, and say again, that the Act needs serious reform, giving the Bank a legally defined role, on par with the Federal Reserve, Bank of England and all the other major Central Banks. Be that role inflation targeting, financial stability, or even more explicitly, managing unemployment rates, there must be a benchmark against which we could measure the Bank. Now we have a situation in which the governor is publicly expressing views about fiscal policy, and one local website even describing the governor/central bank as the government’s primary monetary and fiscal adviser. Not at all. The central bank should be independent of the government of the day and should be reporting direct to parliament.

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Notes From a Native Son: Before Voting, think with your heads and not your hearts

Hal Austin

Hal Austin

Introduction:
When the voters of Barbados enter the polling booths on Thursday, it will be an enormous challenge for them to abandon old political tribal loyalties and objectively put the nation, future generations and their own futures before irrationally supporting a party or candidate they have always supported, while suspending reason. The harsh truth is that this is the most testing general election, not only since November 30, 1966, but since the early 1950s and the introduction of internal self-government.

In the new globalised world, there is no turning back for small nation states such as Barbados. New global organisations, such as the World Trade Organisation and the newly re-energised International Monetary Fund, now have power over small states, mostly wrapped up in international treaties, that they have never had before. At the same time, rich and powerful nations are subsidising their farmers and industrialists, such as car manufacturing and farming in the US, farming in the EU, and a long list of state-owned or controlled industries in China, which put further pressure on small states. But we are not just economic people, as a nation we are rounded with equal value given to our social relations, our civic and moral responsibilities and our cultural and creative environment.

Increasing Government Productivity:
One of the biggest drags on growth in Barbados is public sector efficiency, from improvements in technology, competent management to output per person. One only has to read the annual report of the auditor-general to see the extent of public sector incompetence. Take a simple, but important example, uncollected VAT. Value added tax is a sales tax paid by consumers and collected by trades and service people. For convenience, that money is paid to the government at pre-set dates – monthly, quarterly etc. However, in Barbados, there is a huge backlog of payments, of business people failing to handover to government monies collected on its behalf.

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Notes From a Native Son: Captain the Ship is Sinking – Is Worrell the Best Man to be in Charge of the Central Bank at a Time like this?

Hal Austin

Hal Austin

Introduction:
In the preface to its recent Alternative Worlds report, the US National Intelligence Council observed: “The world of 2030 will be radically transformed from our world today. By 2030, no country – whether the US, China, or any other large country – will be a hegemonic power. “The empowerment of individuals and diffusion of power among states and from states to informal networks will have a dramatic impact, largely reversing the historic rise of the West since 1750, restoring Asia’s weight in the global economy, and ushering in a new era of “democratisation” at the international and domestic level….”. In other words, even at the highest level of the inward-looking US, there is a realisation that the world is changing.

However, reading the over-optimistic, even fictional, recent central bank review of the economy and projections for 2013, one would not get this impression. The report tells us the fiscal deficit is growing, up from 5.2 per cent April to December 2011, to 6.2 per cent in 2012; personal taxes are down ten per cent and VAT fell by two per cent for the same period; subsidies to government entities rose by two per cent and interest rates rose by four per cent. Public sector debt is 54 per cent of GDP, and including the national insurance scheme, it rises to 83 per cent of GDP. But, in about or real optimism, the review predicts that growth over 2013 will be 0.7 per cent, based on the IMF predictions of growth in the US, UK and Canada, our major trading partners. Apart from the fact that I was under the impression the Caricom was our major trading bloc, to base projected growth of the Barbados economy on the projections for those three economies is economic lunacy.

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Governor Dr. DeLisle Worrell the Controversial

Dr. DeLisle Worrell, Governor of the Central Bank of Barbados

Dr. DeLisle Worrell will go down in history as one of the most visible and controversial Governors of the Central Bank of Barbados. He is certainly not a Kurleigh King, Calvin Springer or Winston Cox, perhaps closer to a Dr. Courtney Blackman.

Some Barbadians have become concerned by what appears to be virulent attacks directed at Worrell coming by the Barbados Labour Party (BLP). Attacks led by Arthur and Mascoll, which have reduced Worrell to an economist of lilliputian status. That Arthur, Mascoll et al would be so harsh about one of their own merits scrutiny. Bear in mind the Central Bank of Barbados has always been regarded as a respectable institution.

In the same way many believe governments managing world economies at this juncture in history are unfortunate so too Governors of Central Banks. All have to agree that the unprecedented challenges posed by the protracted global economic slowdown mean that modalities in boom times are not relevant at this time. It is in this context that we have to debate and evaluate the economic outpourings from Dr. Worrell since his appointment in 2009.

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Notes From a Native Son: Bank Regulation is Serious Business, Not Child’s Play

Hal Austin

Introduction:
At a time when banks in Europe, the US, Japan and Britain are imploding and every jurisdiction is enforcing legal requirements on financial institutions, the authorities in Barbados have come up with a wonderful idea of a voluntary code – see Feedback Invited On Draft Banking Code Of Conduct. It is interesting that many of the features of this draft code are similar to those of the now abandoned British banking code, which too was voluntary until November 2009.

Paragraph 2.4 of the draft is of no use for a large number of people in Barbados who do not have access to the internet.

Paragraph 3.2, on unfair contract terms should be a legal requirement, not a voluntary one. The second section of the above paragraph reads: “Financial institutions will also ensure that employees and agents who are authorised to give advice on the financial services offered are properly trained to competently, knowledgeably, efficiently and accurately render such service.” These basic requirements should be legally compulsory on every count. First, agents and employees are working on behalf of the financial institution, not of the customer, and in the case of the agent the form of remuneration is just as important. If s/he is being remunerated by commission, then the sale is more important than advising the customer on his or her consumer rights or even if the product is the right one for them.

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The Arduous Task Of Accessing Funding For Development Purposes In Barbados

Submitted by BAFBFP

Central Bank of Barbados

It is with great sadness that I find myself obliged to expose this obnoxious fallacy, that there is such a thing as access to development funding in Barbados. You see years ago, even before the demise of the Barbados Development Bank, right minded agencies like the Central Bank of Barbados, the National Insurance Scheme and the Caribbean Development Bank, the founding fathers, provided seed capital for a number of funds in the country with the expressed expectation that these funds will be put to use in encouraging and developing productive type operations in Barbados; and for those who are a little slow off the mark, “products” refers to items that one can see, hear, touch, smell along with activity that can attract foreign exchange.

The funds brought into being agencies such as the Enterprise Growth Fund, Caribbean Financial Services Corporation, Fund Access and facilities that are retailed to the public through the friendly neighbourhood Commercial Banks. It must be stressed here that to the best of my knowledge, NO private sector entity in Barbados has ever invested in any of these enterprises.

Over the years as things have turned out, these new agencies have become self supporting and other than for occupying a seat or two on the various boards, the founding fathers have little say in determining the on the ground direction that their progenies take. The result of course is that the initial agenda as stated by the initial providers of the funds (like the Barbados Investment Fund (BIF), the Industrial Credit Fund etc.) has been lost on the bureaucrats who have been fortunate enough to be posted as watch dogs on the disbursements of the monies to a needy public.

Let’s take them one at a time.

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Call For Commission Of Inquiry At The Central Bank

Submitted by the People’s Democratic Congress (PDC)

Central Bank of Barbados

Under the cost of use of money theory, there is no way that the cost of use of local money/value (theoretical/actual) would actually be trending downwards in the country and at the same time there would  NOT be taking place sustained annualized real growth in the political economy and services industry sectors of the country.

Under this same theory, too, is the obverse: there is no way that the cost of use of the Barbadian people’s money/value (theoretical/actual) would actually be trending upwards in Barbados and at the same time there would NOT be taking place persistent annualized real declines in the said political economy and services industry sectors of the country.

In the theoretical and applied political economy research fields, this cost of use of money theory is the near equivalent of the medical DNA technology theory applied in forensic and other tests across many parts of the world. Such is the virtual infallibility of this theory.

For, the cost of use of money theory is built on many fundamental truisms, two of which are already fairly well known in local money affairs circles:

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The Politics Of Smoke And Mirrors Fuelled By 1.9% Margin Of Error

Chris Sinckler, Minister of Finance (l), Owen Arthur, Opposition Leader (2l), Clyde Mascoll, BLP spokesman of economic matters (3l) and Delisle Worrell, Governor of the Central Bank (4l)

BU has defended the need for the Central Bank of Barbados to zealously guard its reputation.  The Governor of the Central Bank has suffered from the tongues of fellow economists Owen Arthur and Clyde Mascoll over his method of communicating on the economy. In light of the recent decision by the Central Bank of Barbados to depart from the trusted approach of using statistics produced by the Barbados Statistical Service (BSS) – in this instance the unemployment number – it has inflicted serious harm to its reputation.

In the current climate the decision has provided political fodder for the struggling Barbados Opposition Party to raise it’s voice. What we have in Barbados these days is smoke and mirrors politics. On the government side we are witnessing the distasteful promotion of the late David Thompson’s memory to deflect focus on its economic performance to date. On the side of the Opposition every opportunity to gain political mileage is being seized. The political scientists explain that this is Westminster politics at its brilliant best, others suggests the counter view that extraordinary times call for extraordinary action by our leaders; a no show to date.

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