Filtering Truth From Fact About The Performance Of The Barbados Economy

Governor of the Central Bank Dr. Delisle Worrell

The International Monetary Fund (IMF) recently released a statement on the Barbados economy which has caused some Barbadians to sigh with relief. Central Bank Governor Delisle Worrell was also also full of glad tiding in April when he forecast the economy to grow 2% during his Review of Barbados’ Economy for the First Three Months of 2011. Why is BU not as optimistic?

Is it not ironic suggesting growth for an economy which relies heavily on that of the United States? The US legislature is currently debating whether to raise its debt ceiling to 16 trillion dollars!   Following close behind the US is the UK government  who has committed to cut 600,000 government workers over a three year period. How can we be so confident about growth when the two main markets we rely on for inflows of tourist, foreign direct investment and remittances continue to struggle? What growth the US has managed to achieve in the last year is what the economists refer to as jobless growth.

Given the prevailing economic uncertainty one might have reasonably expected our intellectual cadre of professors at Cave Hill,  to have come to the assistance of ordinary Barbadians, and provide an unbiased and reasoned interventions to demystify the economic gobbledygook we are being fed. No such luck. Instead what we have had to ‘processed’ is an attack on the credibility of the information presented by the Central Bank of Barbados in its periodic updates  to the nation. The Central Bank of Barbados has always held the respect of both sides of the political spectrum in Barbados. This is our first recollection of any Governor of the Central Bank attracting the kind of attack delivered with the fierceness as we are witnessing from former Prime Minister and Leader of the Opposition Owen Arthur and former Central Banker, economist and Arthur’ s right hand man Clyde Mascoll. They have both vehemently dismissed the view posited by Governor Worrell that the economy has grown.

At the crux of the puzzle if you follow  BU’s layman interpretation:

If nominal GDP (gross domestic product (GDP) figure that has not been adjusted for inflation) fell in 2010, and if prices were rising it means that real economic growth also fell. Against the foregoing how is it Barbados can report economic growth? In January when the government reported 0.3% growth that was based on an estimate. To be honest BU has become irritated at the carving up of the statistics and analysis to obfuscate ordinary public. What about the intelligentsia on Cave Hill? Had a peek at the Barbados Economic Society blog to make sure we had not missed any elucidation on the mystery of Barbados’ economic performance in the first three months of 2011.

BU will leave it up to the economic gurus to bang each other on the heads about who is right or wrong about the numbers. Here is what we know. If there has been some manufactured easing of the global economic conditions then it stands to reason that Barbados will benefit from a few more tourists visiting the island, increase in FDI and remittance inflows because a few more people feel a little more confident. Does it mean however that our debt to GDP ratio does not remain North of 100? Does it not mean that we are spending more than we are earning on Current Account? Does it not mean that we are flogging the same economic fundamentals which have served us well for the last 30-40 years? What is the status of our renewable energy program? On a related note it is ironic that President Barack ‘Clean Energy’ Obama gave the approval last week to ‘drill baby drill’ in Alaska and the Gulf.

There are facts and then there is the truth. To sensible Barbadians the truth is how long we can continue to withstand the boom and bust cycles which are approaching of late with increasing frequency. Wholly dependent on a fossil based economy in times when cheap oil is a thing of the past. We are given to understand we are at the tail end of the last recession described as the worst since the Great Depression. It has destroyed the wealth of developed nations and heaped more debt on developing nations. Developing nations have no choice but to turn cap in hand to the IMF, World Bank, IADB and other international financial institutions; all controlled by the developed world.

While our economists argue about whether we have nominal or 2% growth, it seems to pale in insignificance when we view the big picture.

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126 Comments on “Filtering Truth From Fact About The Performance Of The Barbados Economy”

  1. Enuff May 25, 2011 at 3:25 PM #

    And hotels are not businesses that can be sold and employees kept employed and their nature diversified? And foreign businesses setting up don’t also require the same finite land resources? And depending on the nature of the business specific locations and infrastructure?
    Just recall that based on the BHTA’s President recent comments, the villa sector saved our tourism industry this past season. In the absence of these villas would the tourists have still come to Barbados and stayed in the the hotels or vacationed in St.Barts or one of the other many destinations with sun, sea, sand and villas?
    As I said before, it is all about timing and making the best of opportunities. No one has been able to offer any real alternatives as yet. Did I hear a green economy? Will not happen anytime soon. Lowe, Kellman and the others don’t have a clue what they are talking about.

    Like

  2. David May 25, 2011 at 3:29 PM #

    @Enuff

    You missed the part about mitigating sector risk.

    Like

  3. Josquin Desprez May 25, 2011 at 3:52 PM #

    @ David

    Correct once again.

    What we fail to realize is that land is a scare resource. The fundamentals of economics will tell you that the world faces a problem of scarcity (the condition in which human wants are forever greater than the available supply of time, goods, and resources). The economist calls resources factors of production and divide them into three categories: land, labour, and capital.

    Because of the perpetual problem of scarcity, no society has enough resources to produce all the goods and services necessary to satisfy all human wants, which forces people to make choices. Economics is the study of how a society chooses to utilize and allocate its resources to the production of goods and services.

    There is not enough land in Barbados for everyone to get a villa, condominium, bungalow, chattel house, or a one roof. Therefore, continuing on a path of real estate will not be sustainable, even if Barbados was as big as Guyana.

    Like

  4. David May 25, 2011 at 3:58 PM #

    Even Mia admitted to the need to transform the economic sectors of Barbados when she was leader of the opposition. She estimated 15 years it would take if memory is good.

    Like

  5. Josquin Desprez May 25, 2011 at 4:23 PM #

    I personally think that it is wrong to compare the recession of the early 1920s to the current recession. There were a number of variables that have to be included to illustrate the differences. For example, the USA and the major countries in Europe were going through the industrial revolution; the style of management during that period was autocratic, and workers deliberately worked below capacity, hence productivity was extremely low; and a number of experiments in management were being undertaken so as to determine the best one way to get the job done and improve productivity. Additionally, many economists came to the fore, including John Maynard Keynes, whose model of Keynesian economics is still being used today.

    What is rather interesting, I have not heard of any economists (at UWI, Central Bank, or in the private sector) coming to the fore and suggesting innovative new economic measures, as Keynes did. Instead we are having back and forth arguments about Central Bank figures, and which political party is at fault for Barbados’ current situation by the armchair economist, while the real economist have taken a text book approach to the situation, and disagree with each other. The reasons for their disagreements can be explained by the difference between positive economics (analysis limited to statements that are verifiable) and normative economics (analysis based on value judgment).

    The conclusion is that economists’ forecasts can differ because, using the same methodology, they can agree that A causes B, but disagree over the assumption that A will occur. When considering this debate, we must make sure to separate the arguments into their positive and normative components. This distinction will allow us to determine if we are choosing a course of action based on factual evidence or on opinion.

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  6. David May 25, 2011 at 4:35 PM #

    @Josquin

    Interesting last comment which gives a lot to ponder.One of the advantages of having a homegrown university should be to deliver the calibre of brain to the Caribbean space to develop solutions to fit our region.

    Instead what we are seeing is a paucity of relevant research to build out the kind of solutions you touched on, we have become subsumed by the power of globalization.

    Yes we have to compete in a global space but we have to do so driven by our unique environment which would help to give us a competitive edge.

    Who says it will be easy but we have to lay the foundation for it to happen.

    Like

  7. Clone May 25, 2011 at 4:36 PM #

    David
    Do you recognize that neither the DLP nor BLP supporters on this blog never call for the implementation of FOI and Integrity legislation?
    These are two pieces of legislation that would stop all the talk about corruption because the public would have a right to know and can get the information.
    For example the Trinidad Prime Minister stayed at a private home after she won the elections and then the owner of the house got a government contract.She is now before the Integrity Commission for that.
    I want to see that happening in Barbados.

    Like

  8. observer May 25, 2011 at 4:48 PM #

    @Enuff
    If you think that i do not not know that you are mastaken. What I will not accept is people trying to portay the DLP as inept and full of thieves and forget what heppened during the last fourteen years. of the BLP reign.

    @David
    Getting legislation from SG Chambers is a patenly slow process. As I said before, i support integrity legislation which should allow for whistle blowing.

    @Josquin
    Barbados has a liberal approach to granting work permits to the point where it is being abused. We have an immigation policy which is innovative. People requesting work permits for employees must submit all the relevant information and in a timely manner, and notat the last minute and then expect to be served expeditiously ahead of others.

    Barbados has one of the best structured Public Service, a little tinkering is needed as far as measuring output. Promotion needs to be baed on merit , for example, there need to promote people based on output, competency, qualification and the ability to lead, and not based on incestuous relationship and connection. Those who dont produce should be censored including the politicians.

    Because of the high cost of doing business here, the strategy of service was used at a model of development. However, after the incentives offered to companies expire, they look for cheaper destinations where wages are very low and that is the nature of MNCs and the cylce continues.

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  9. David May 25, 2011 at 4:54 PM #

    @Observer

    Barbados has one of the best structured Public Service, a little tinkering is needed as far as measuring output. Promotion needs to be baed on merit , for example, there need to promote people based on output, competency, qualification and the ability to lead, and not based on incestuous relationship and connection. Those who dont produce should be censored including the politicians.

    If the above was true for any private sector company would it not be reasonable to opine that it would not be competitive?

    Like

  10. Enuff May 25, 2011 at 4:54 PM #

    Nowadays attracting FDI is not solely about what the firm desires but even more importantly where its current and future ex-pat employees are willing to live and work. So an enabling environment it’s not just about improving public sector efficiency but also the presence of bars, restaurants, golf courses, polo fields and ‘high end’ housing.

    @Josquin Deprez
    Agree ref land housing.

    Like

  11. observer May 25, 2011 at 5:03 PM #

    @Josquin

    The problem we have it that development is looked at from purely an economic persective, but development must also be seen from a political and social perspective. Any new model of development should not only include the economist, but the sociologist and the political scientist as well.

    Like

  12. observer May 25, 2011 at 5:07 PM #

    @David

    You cannot comapare the Public Sector with the Private Sector for their strategic objectives are different, one is social in nature, while the others is supposed to obtain the highest returns on investment for its shareholders.

    Like

  13. Christopher Halsall May 25, 2011 at 5:08 PM #

    @Josquin Desprez: “Because of the perpetual problem of scarcity, no society has enough resources to produce all the goods and services necessary to satisfy all human wants, which forces people to make choices.

    But… This is a zero-sum game. Isn’t it?

    While some are sucking at a vacuum, others are holding the release valve where there is pressure.

    Aren’t they?

    Like

  14. Enuff May 25, 2011 at 5:09 PM #

    Observer,
    You left out the key component. The three pillars of development are: Social-Economic-Environment. Political Scientist?

    Like

  15. Josquin Desprez May 25, 2011 at 5:10 PM #

    @ David

    “One of the advantages of having a homegrown university should be to deliver the calibre of brain to the Caribbean space to develop solutions to fit our region.”

    I could not have said it better myself. When one does a PhD in any subject, that individual is obligated to do research on a continuous basis. The UWI have been producing many academics, however, how many of them are doing post graduate studies in economics? How many of them are pursuing qualifications that can help the Caribbean develop and compete with the world at large. We have students reading for degrees such as History and Psychology, Political Science, etc, just to say that they have a degree, yet their employment choices are limited.

    Since the Caribbean islands have small open developing economies, this global economic crisis can be considered as an “external shock factor”, which has affected our economies directly and indirectly (through income and wealth effects). This recession should be seen as an opportunity for us to look at the tertiary level education in the Caribbean, and revise the structure of the system, so as to prepare us with viable solutions should there be a more severe occurrence of a crisis in the future. However, we are juggling with the thought of applying Keynesian or classical economic theories to the crisis, instead of developing economic strategies that are compatible with the sophisticated nature of Caribbean financial markets.

    For example, during the great depression, the classical economists’ prescription was “to wait and see”, because the economy will self correct to full employment in the long run. Election in the US was approaching at the time, and there was political pressure to do something about the recession immediately.

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  16. David May 25, 2011 at 5:23 PM #

    @Observer

    Are you saying the public sector should escape having to implement a performance management system?

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  17. observer May 25, 2011 at 5:56 PM #

    No I was responding to your question. Measurement of performance in the Public Service is not easy, if your memory serves you correctly, Public Sectore Reform was one of the centre piece of the BLP and yet the Public Sector is not reformed.

    In some aspect of the private sector output can be measured, for example, how long should it take a machinist to stitch a pant or shirt considereing all things are equal. Can you determine how long it should take a person to researh a matter, or how long it should take David to write a speech or Cabinet Paper or produce draft legistlation. All i am saying it is a complex process, but we must start somewhere and that is to ensure that people dont spend the time on telephone gossiping, or take unsually long lunch hours or use Governemt vehicles to conduct their private business.

    Change must be done on an incremental basis.

    Like

  18. David May 25, 2011 at 6:00 PM #

    @Observer

    Any output can be measured. The much touted social partnership needs to make it happen.

    Like

  19. Enuff May 25, 2011 at 6:18 PM #

    @ David
    Totally agree with you about measurement, and in some government departments quarterly work plans with targets are already being used.

    @ Josquin Perez
    I am not so sure the issue is whether or not one’s undergraduate degree is in History or Psychology or Political Science. What is important is that those degrees instill critical thinking skills as students with these degrees go on to postgraduate study in different subject areas.

    Like

  20. BAJAN TRUTH May 25, 2011 at 11:33 PM #

    @ Observer

    How does accusations with no evidence become fact, blockhead. You still have not categorised the actions of your party.

    @ David
    I often hear people talking about an approach using land is not sustainable, but I keep asking what economic activity can take place that does not require a building and building requires land, unless we are doing all internet knowledged based services. Even those require a building, which requires land. The issue is how much return is produced by that activity versus the land consumed to house the activity. What FDI can you attract if people cannot purchase land to execute the project? With China suctioning FDI at enormous rates, there is little appetite for investment in C’bbean except around tourism, which takes up land. But it is the same if you attract factories, the same if you attract banks, data services firms etc The issue is what ar ethe returns?

    The issue of productivity is critical to managing the way forward in both public and private sectors. Yet it has not been attacked frontally. Breakthrough means changing mindsets. It is the only way to reduce ineffciency, wastage and to improve output. Thus giving the nation greater output for its resources.

    We are in a very tight spot as ably pointed out in above posts. The gov’t is in a jam caused by external crisis and poor policies. The second wave of bad news is the fact that it is being forecasted that poor economic performance in US and Europe will lead to stagflation and another bout of slow and no growth. So wither Barbados. We are in no shape to contend with this.

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  21. David May 26, 2011 at 9:32 AM #

    @Bajan Truth

    Sure you are familiar with the approach Singapore took, their FDI strategy straddles hotels, restaurants, manufacturing, financial services etc.

    In Barbados most of it seems to be about selling land to the rich and famous, developing golf courses etc.

    You are correct there is no easy answer but whatever we do it has to be well though out, be part of a plan which does not dig a hole for Barbados.

    Like

  22. observer May 26, 2011 at 10:14 AM #

    @Bajan Truth

    You are so smart, tell this blog what method is used to measure output in the public service. Firstly when the Estimates of Revenus and Expenditure are prepared no scientific way of determining output is/has been arrived at, even though there is supposed to be progamme budgeting; that is the siad estimates are supposed to determine what output will be achieved. Every three months, Departments?Ministries are supposes to provide a report with the results achieved, but you know what Mr. Know All, find out how many departments/ministries respond to the request and tell this blog?

    Reason being, you have to have structured Management Information Systems in place to monitor at the tactical and operational levels and when these are functioning, information for strategic level will be easily obtained and therein lie the problems in the Public Service.

    I await your repsonse MR. Bright Spark.

    @David

    Anything can me measured, but you have to first determine the methodoly and studies MUST be undertaken. Dont you think studies and counter studies were done after the WWWs to determine how to measure output. Those of you who have not been directly involved in socail investigation will believe that it might be an easy exercise, but trust me it is not easy. You have to find a way of sifting out truth from fictions, for example, if I know that you are observing me in a study, Ican look busy doing nothing, I can tell you what I think you want to hear, or if I am being interviewed about the lenght of time it will take me to research and write a ten miniute speech etc. I can lie to the hilt etc. Ask the Productivty Council if a produtivity bonus was attempted for Public Officers and what happened?

    I am one who believe that some Public Offices dont deserve to ddraw their salaries at the end of the month. Note I use the word draw deliberately. Those in the system would know better than the armchair theorists.

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  23. observer May 26, 2011 at 10:16 AM #

    The above should also be directed at Enuff as well, the most inteligent person on this blog. LOL

    Like

  24. David May 26, 2011 at 10:46 AM #

    @observer

    Performance Management is not as hard as you make out.

    What is hard is both political parties and unions committing to make it work because the patrimony we know exist would be exposed and the union’s job would become a little harder because a blacket/across the board increase would not cut it any longer.

    Like

  25. Josquin Desprez May 26, 2011 at 11:04 AM #

    @ Bajan Truth

    The reality of the situation is that all countries are faced with the problems arising from the necessity of using scarce resources to satisfy all the wants of their citizens. Because we cannot produce everything we would like to consume, some mechanism must exist by which we would decide what will be done and what will be left undone. If we choose more of one thing, where there is an effective choice, it will be necessary for us to have less of something else. Because of scarcity, opportunity cost exists; people must make choices, and each choice incurs a cost (sacrifice). This means that each decision has a sacrifice in terms of its alternative not chosen. Scarcity limits an economy to points on or below its production possibilities curve.

    Land is a scarce resource and there is not enough of it available to satisfy the types of developments you are alluding to. Based on the theory of opportunity cost, if we use the available land for real estate projects, then we have to sacrifice agriculture. If we use the land to house every last person, then we have to sacrifice agriculture and the real estate projects.

    Like

  26. observer May 26, 2011 at 3:06 PM #

    @DAvid

    Let me start with the premis that i accept that performance measurement is not as hard as i say, tell this blog how it can be done, including the metodology that you would use to measure output and performance, citing examples in the caribbean where it is being done right now or futher afileld.

    I wait your informative response.

    Like

  27. David May 26, 2011 at 3:12 PM #

    @observer

    Why do you want to benchmark against Caribbean islands? Do you want to be a leader?

    There is a lot of research out there here some research done for the S. Africa space.

    http://eprints.ru.ac.za/293/1/QW_Williams_MBA.pdf

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  28. David May 26, 2011 at 3:24 PM #

    The problem this government will face shortly is after all the talk about growth the unions will be coming to the table with expectations, how will/should they respond?

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  29. observer May 26, 2011 at 3:35 PM #

    @David
    Our cultures are different to others, that is why.

    Like

  30. observer May 26, 2011 at 3:49 PM #

    @David

    The Unions have always been, in most cases, responsible. The Unions are on record of saying that they are interested foremost in preservation of jobs and they want government that assurance in writing.

    If the country can afford an increase, albeit small, there is nothing wrong with that. I would prefer to see the persons at the bottom receiving a small increase even if it means freezing any increase for those at the top.

    Where private sector companies have done well, the workers should be given an increase, but that will be decided at the negotiation table.

    It is time for business owners to have an employee share participation scheme where workers can be offered shares for the foregoing of bonuses.

    Like

  31. observer May 26, 2011 at 3:52 PM #

    @David

    I clicked on the link provided and got a blank page.

    Like

  32. David May 26, 2011 at 6:14 PM #

    To those who think this is a time to play politics…

    World Bank president: ‘One shock away from crisis

    Mr Zoellick said the world should not forget the lesson of the last financial crisis
    Continue reading the main story

    Global Economy

    US economic slowdown is confirmed

    OECD sees risk of ‘stagflation’

    Markets fear Greek default closer

    Japan economy back in recession

    The president of the World Bank has warned that the world is "one shock away from a full-blown crisis".

    Robert Zoellick cited rising food prices as the main threat to poor nations who risk "losing a generation".

    He was speaking in Washington at the end of the spring meetings of the World Bank and International Monetary Fund.

    Meanwhile, G20 finance chiefs, who also met in Washington, pledged financial support to help new governments in the Middle East and North Africa.

    Mr Zoellick said such support was vital.

    http://www.bbc.co.uk/news/business-13108166

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  33. David May 26, 2011 at 7:25 PM #

    Things can’t be all that bright if a bank (FCIB) decides to send home 32 nd this is after making millions in profit. Then again it is all about ROI for the shareholders.

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  34. observer May 26, 2011 at 7:58 PM #

    @David

    You got that right. I dont use no ATM to help put people out of work. MNCs are only interested in the dollar, they have no committment to any country, what lille money I have with FCIB, i gone put it on the BPWCCUL.

    Like

  35. Enuff May 26, 2011 at 8:45 PM #

    @ David
    Did I not say BNB was sending home staff since last year?

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  36. Hants May 26, 2011 at 10:25 PM #

    David wrote, “Then again it is all about ROI for the shareholders..”

    In this modern capitalist environment it is all about profits.
    32 x $100,000 = $3.2mill per year in employee cost saved.

    Hopefully there will not be too many more layoffs.

    Hants theory. A laid off employee is also a lost “customer”.

    Like

  37. Sargeant May 26, 2011 at 11:50 PM #

    @David

    FCIB is 100% owned by CIBC and CIBC have been sending people in Canada home for years. Yuh tink dat dey gwine let de subsidaries off scott free?

    Eliminating a few employees will have a robust impact on your bottom line, all those salaries and benefits which you don’t have to dish out. Banks are not in the business of standing still when it comes to profits, if the bottom line doesn’t reach the prescribed target look for heads to roll.

    Like

  38. observer May 27, 2011 at 8:59 AM #

    @David

    The reason why I am more cynical about the socail partnership, employers do as they like, while labour must bear the brunt. The Social Partnership should be dissolved.

    Like

  39. Prodigal Son May 27, 2011 at 10:22 AM #

    When all is said and done, to help close the huge deficit, the government is going to have to lay off especially in the light of the union demands. Or the unions may just opt for no increases and hope for no layoffs.

    I see that the Minister of Finance is finally acknowledging that there is a problem and that they just cannot go along monthly using up NIS funds. He says that they are going to have to look at subventions. Yet they are still advertising free summer camps and stop this cradle to grave freeness mentality of some Bajans.

    My advice, though I know Dems dont need advice from anybody, they know it all, is that they look again at their budgets and go through line by line and cut down on some of of the unnecessary “freeness”, in that way the monies cut from the Drug Service can be reallocated back and stop old people from complaining daily that the government dont care about them.

    Like

  40. observer May 27, 2011 at 11:17 AM #

    I have never supported the excessibe expenditure on the summer camps. parents should provide meals for their children.

    There is still too much wastage in government, such as replacing sturdy office furniture that only need a little touching up, with expensive imported chip wood furniture.

    Shouldnt we be providing jobs for barbadians by using local furniture.

    Instead of using networking priniting, expensive ink is used for individual printers.

    Officers need to to get the best price for goods or services provided to government. There need to be an interal audit department in every Ministry/Department and Satutory Body.

    Teleconferencing should be used to reduce the cost of international travel. Ministers should be travelling business class in these recessionay times.

    The management information systems need to be improved. every person caught stealing govrnment funds should be prosecuted.

    More streamling need to be done, similarly to what was done in the Ministy of Health.

    Subventions given to NGOs should be tied to defined and measuarble outputs. Similary to Satutory Boards.

    Each consultant at the QEH need to deliver for the great compensation they are given.

    All Monies owed to Vat should be collected. It is a Comsumer Tax paid by the consumer.

    A vigorus programme need to be in palce to collect NIS, Payee and or corporation tax from the self employed.

    Like

  41. Moneybrain May 27, 2011 at 2:49 PM #

    @Sargeant
    While it is true that CIBC in Canada has fired peeps before, it should be noted that banks here have had a policy for years now to decrease full time employees and increase part timers. WHY?
    Banks dont want the cost of BENEFITS and PENSIONS!

    Banks in BIM make alot of money by taking advantage of peoples limited investment options, they hold overseas drafts for 30-45 days routinely etc. Banks should avoid firing good workers in keeping with what should amount to a social contract with the citizens of Bdos based on profits and accepted business practice on the island.

    What is noteworthy is that one of the Big Four Accounting Firms here in Toronto fired a bunch of good youngsters in 2008-09, including my own son who had been promoted to senior auditor 2 months bfore and who was let go days before his CA finals results, which he passed easily. Why? What kind of management and long term planning is that? These jokers did not even have the good sense to offer these youngsters a job at reduced pay!

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  42. AOD May 27, 2011 at 9:32 PM #

    Exactly how much of GDP in Barbados is deficit spending? 2% , 5% , 8%? I hope this government is not in a pretend, spend and extend programme. Like many other reckless nations, piling on more debt. No matter how many times the Keynesians fail, they always return to leadership and government, like undead zombies and vampires. Borrowing money to pay public workers salaries can only work for so long (subject for a much longer comment). To those of you still drinking the Kool-aid , believing that this is just a worse or bigger global recession…you’re dead wrong. The Global Ponzi is bust and no amount of deficit spending or bailouts is going to stop the coming depression….might delay it but not stop…Until then we get stagflation!!!! yippee (sarcasm)

    @Josquin Desprez

    I agree the Keynesian approach cannot solve our problems. Problem is many Keynesians think the Great Depression was solved with Government spending in the USA but until the retooling and expansion of the manufacturing base for WWII (early1940s) that prime the pump approach failed. It resulted in an entire decade of failure. Closer to our times Keynesian B.S failed again, in Japan and gave them a lost decade (1990s)…..wanna have a lost decade? subscribe to Keynesian B.S

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  43. Straight talk May 28, 2011 at 6:42 AM #

    Let’s think outside the box a bit.

    We need Forex to sustain our chosen lifestyle.
    We don’t want to sell our “birthright” to foreigners.
    Our long stay tourists , if not decreasing, are spending less.
    The air travel situation is precarious and is being gradually legislated out of affordability by forces beyond our control.

    What to do?

    IMHO attract the well-heeled pensioners, of which there are thousands, to lease a lifetime property in specially developed communities (say, Sam Lord’s).

    This proposal converts visitors from long stay into permanent stay.
    Their considerable pensions are remitted here month after month, to pay living expenses, residency and land tax obligations
    There is minimal risk of damage to our culture or adding to criminal behaviour
    The medical facilities required will benefit all.

    I could go on, but you get my drift.

    Barbados still has an enviable cachet in our traditional markets, and could atract thousands with a well planned scheme, which would underpin our forex requirements without the need for chasing fewer and fewer tourists.

    Just a thought, bring on the comments.

    Like

  44. David May 28, 2011 at 6:47 AM #

    @ST

    Agree and your suggestion has been mooted for moons now.

    If we understand correctly we need to have the ancillary services in place, private hospitals, friendly legislative framework, a willing public sector partner etc.

    In other words the same approach we have for traditional tourism.

    Like

  45. Hants May 31, 2011 at 2:31 PM #

    Is Barbados real estate over valued ?

    Like

  46. balance May 31, 2011 at 8:42 PM #

    looking glass is entitled to his views; but the proof of the pudding is in the eating and owen arthur did what he was supposed to do during his fourteen years in office and he did it well. he took a bewidered country with a battered economy and allowed me and barbadians generally to enjoy a peaceful and prosperous life for the last fourteen years. no layoffs, no rejection of the barbados dollar by our caricom neighbours, no loss of severance, restoration of the 8%cut which would have enhanced the pension of public servants; giving unestablished workers pensionable status; expansion of the airport and seaport; expansion of the highway; reverse tax credits for persons in the lower income bracketand i could go on and on. i am sorry to have to sing the tune of the blp but there must be balance in our presentations. he lost the elections due to some splendid electioneering by the dlp buttressed by the eloquence of the late prime minister in questioning the integrity of mr arthur. we were promised better. the question to the non-partisan is are we better off? speculation is rife as to whether he would have been able to manage the economy as well under the current economic climate. i am of the view that having done it before ; he could have done it again and even better because he had the track record. the charges of corruption and the blp led against mr artur on the platform and which propelled the dlp to victory should be brought to light and let the chips fall where they must. i think that mr arthur’s greatest disservice to the people of barbados would be the destruction he has wrought on a party which lifted him from the bottom of the pork barrel; but in my view he did manage barbados well.

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  47. Moneybrain May 31, 2011 at 11:00 PM #

    @Straightalk and david
    That idea could be fleshed out further with focus on Medical services to the retired and Medical Tourism. Medicine would bring in alot of $$$$$ quickly if organised properly. Bim being small must always think in terms of maximum profit / sq ft utilised.

    @Balance
    Owen was good in many ways but never forget that Bim and most Western Countries benefitted from the RIDICULOUS EXPLOSION in money creation. That is why we are in the midst of a very serious financial CRUNCH which will take at least 5-7 yrs longer. Be very careful as the US$ could be headed MUCH LOWER and hyper-inflation could easily wreak havoc a la Germany in the 1920s, Brazil/ Argentina in the 1970-80s and Zimbabwe more recently. Indeed I possess a Zim ONE HUNDRED TRILLION $ Banknote, very legit.
    Protect yourself with Gold/ Silver ie real money or other items that can hold value like agri commodities etc

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  48. Sargeant June 1, 2011 at 12:00 AM #

    @Moneybrain

    Banks in BIM make alot of money by taking advantage of peoples limited investment options, they hold overseas drafts for 30-45 days routinely etc. Banks should avoid firing good workers in keeping with what should amount to a social contract with the citizens of Bdos based on profits and accepted business practice on the island.
    ************
    Banks do hold funds on drafts even when they are issued by their own overseas branches for an inordinately long time. I know someone who has a fairly substantial balance in their account and the banks still hold funds for 30 days etc. although their balance far exceeds the value of the draft. In this day of modern communications there are many avenues that the branch could explore to verify the authenticity of the instrument. In some ways banking in Barbados is stuck in the 60’s.

    I agree with your comment re the social contract but you must remember that the Big 3 Scotia,RBC & FCIB have their HQ’s in Canada although regional HQs may be in B’dos. Policy directives are issued by HQ to mirror what happens in Toronto and local conditions may not be taken into consideration when it comes to layoffs. In Toronto a laid off bank worker could reinvent himself and perform many different roles while opportunities in B’dos are somewhat limited.

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  49. Sargeant June 1, 2011 at 7:10 AM #

    To be fair to the Financial Institutions I should have pointed out that some of the workers who lose their jobs are older workers who accept “retirement packages” and the younger members of the workforce get to keep their jobs

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