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.

Government should have the right to recommend a future governor, but it should be left to parliament, sitting in committee, to confirm that appointment. In terms of its remit, the Central Bank should have responsibility for monetary policy, with the minister of finance in charge of fiscal policy. If the governor is not clear about that then it should be made clear. Revenue policy is not to do with technocrats, but rightly for elected politicians. That is another issue that has got to be clarified. But, in a situation in which the minister is out of his depth, and has an obvious professor/student, or master/pupil, relationship with Dr Worrell, the reality is that no matter what the legal situation, the de facto one is that Dr Worrell will be the puppet master, pulling the strings from behind the screen.

Ignoring these slight constitutional technicalities, there are more worrying things about Dr Worrell’s recent reported speeches. Recently he has made some rather bold statements, if reported correctly: that the debt/GDP ratio does not matter, and even ventured that Japan, a nation with a 230 per cent debt/GDP ratio, does not have any economic problems. His other suggestion that government needed a new fiscal adjustment strategy is right, so why did he withdraw it the following day? Was political pressure put on him, if so his professional integrity should compel him to go public and stick to his guns. After all, it is his professional and intellectual reputation at stake.

Ignoring for the time being the semantics of ‘new policies’ versus  ‘adjustments’, the point is that something has to be done, and soon. If so, then what? Rhetoric is one thing, but spelling out the details is something else and it is the detailed plans that the nation needs. Barbadians are very good at talking but when it comes to action, implementing detailed policies, they fall away. Interestingly, in his press briefing, Dr Worrell fell back on the old canard of maintaining foreign reserves at the current level, of just over Bds$1bn. This is negative and self-defeatist, as we know from post-war economic history. At the time of the Bretton Woods conference, the USA Treasury was pushing for a continuation of the fixed rate exchange, which FDR had put in place with the 1934 Gold Standard (an exchange rate of US$35 per ounce of gold), but underlying this was that Fort Knox had enough gold to see the US through. Now, interestingly enough, it is the official US position that fixed exchange rates are part of a currency war – thus its tension with China. FDR was an economic determinist and the economic policy as part of wider foreign policy, a view supported by Harry Dexter White, who led the US delegation in the  talks. But as part of Britain’s post-war restructuring negotiations the UK had to sell off US-based subsidiaries of UK companies, get rid of its colonies (despite the historic myth of an uprising by the colonised) and at one point Britain was even considering offering Jamaica, Trinidad and British Guiana to the Americans as part of the deal, which the US rejected. Three years later, in 1947, Britain accepted the Marshall Plan  and constitutional independence for Greece, Palestine and India soon followed. All this happened at a time when Britain was running out of US dollars and it is now conceded that Britain rushed in to the Marshall Plan arrangement (see: Benn Steil’s The Battle of Bretton Woods) because of Keynes’ obstinacy. Sir Richard ‘Otto’ Clarke, a senior UK civil servant  felt Britain could have borrowed the necessary money privately from the American Import and Export Bank or from Canada.

Without drifting too far away from the subject, by the early 1970s the Americans’ prize possession, Fort Knox gold, was running down, which led to President Nixon taking precipitate action in 1971 against the gold standard. The point is that reserves are there for hedging against exogenous shocks, not as prized possession to be kept in some foreign currency or local bank account. Cyprus is now offering to sell off euros400m of its gold reserves to settle its sovereign debt problem.

Contrarian:
Even if we were to accept that there is no economic consensus on how best to navigate the global crisis, it is nevertheless clear that Dr Worrell needs to do say more substantively on the economic problem facing the nation. He is simply wrong on all the significant issues he has so far spoken publicly on and the only thing worse than some of his outrageous contrarian views is the total silence of academic economists. This crisis is their moment, it is the time for trained economists to step up to the plate and give the nation guidance. But due to a combination of their job insecurity, uncertainty about their intellectual capability, or just discursive cowardice, they continue to remain deaf, dumb and blind to the slow car crash that is the Barbados economy.

Dr Worrell comes over like a secular preacher: good times are around the corner, the economy is going to return to growth, the bad times are just a test of national nerve, but don’t give up. However, the hungry must be fed and neither Dr Worrell nor the minister, Chris Sinckler, has the barley loves or small fishes to feed the thousands. In simple terms, Barbadians need answers. And for a party that has had a full parliamentary term to think through its policies, and, since February 21, even more time to do so as a matter of urgency, this is poor showing in anyone’s books.

Quantitative Easing:
If the government and Central Bank are really intent on QE, as minister Sinckler has announced, then we have a number of models from developed economies to guide us. There is the |Bank of England, which has injected £375 in to the markets, but most of that has been buying back bonds from banks (63 per cent of all sterling bond issuance is held by the BoE), yet there is talk about funding mortgages and small businesses. That money could have been used to fund mortgages and small and medium enterprises direct by establishing a post office bank, similar to the old Giro and TSB Banks. What the BoE and UK Treasury have done is to give banks money to pay down their gearing and to build up a massive war chest. So we know that is not the model. In fact, that is similar to the one the Bank of Japan used in the troubled 1990s, giving householders cash which they dutifully saved, but differs from the one introduced by the new prime minister and governor of the Bank of Japan.
There is also the Federal Reserve model and that of the European Central Bank.

So far, neither Dr Worrell nor minister Mr Sinckler has said anything about the proposed Quantitative Easing, if it is going to be new money, and if so where is the money going to come from? And, given the usual lack of detail when announcing new policies, neither have they said how the Bds$600m stimulus, the sum mentioned, is going to be spent.

Low Cost Programmes:
Given government and Central Bank inaction, there are a number of things they can do without imposing any further burden on hard-pressed tax payers and which would provide jobs and go a long way towards helping with public safety. The most urgent of these financial stability initiatives should be job creation, in particular for the all-important 16 to 24 year olds, the cohort that is almost certainly at the centre of the plague of choke and rob crimes.

Organising such a scheme for non-graduates is relatively simple: turn the focus on providing skills for these men and women and provide remedial education to those who are badly in need of further education, and attach conditionality to it, such as making the courses compulsory for those who want government jobs or access to state-provided skills training. Separate the small business unit from the civil service and make it self-governing, although current staff will retain their civil service benefits, with a non-executive board of directors, made up of business people, retired accountants and trainers, but exclude trade unionists and party supporters.

The SBU could be funded with the Bds$10m in dormant bank accounts (underwritten by the government), the same amount of money that the David Thompson government gave to the Barbados Turf Club and to Clico. Government can also look at alternative business models, such as employee-owned, cooperatives and mutuals, which have a better record of survival than ordinary commercial enterprises, led by some of these young unemployed people. It would be amazing how thoughtful and creative some of these young people could be if given the opportunity, with the only thing holding them back being suitable funding, guidance and the confidence of policymakers. And, I would not repeat the list that I have published here before, such as privatising all the peripheral public sector departments that are not central to the role of government. By privatising I do not mean selling all the nation’s assets to foreign rich kids with bulging wallets, but to the workers and ordinary Barbadians.

Government should make it policy to turn the nation in to an equity-owning democracy, and at the same time turn the existing 17 post offices in to Post Office Banks, paying all 30000 or so public sector workers through the new bank. All this can be done within weeks, leaving the big figure developments for more considered thought and ideas, such as developing a private housing market, a new companies’ Act controlling the behaviour of majority shareholders, the taxation of cross-border firms, allowing the raising of corporate bonds and corporate governance.

Analysis and Conclusion:
As things stand, government and the Central Bank are trapped like rabbits in oncoming traffic lights, they do not know if to go or come, jump or stand still. All they know – or should realise – is that they are in the frame and the nation is looking to them for new ideas and policies. To date, they have failed the nation.

There has been no national debate of quality, or at least in official quarters, about freezing public sector salaries, new revenue streams such as an inheritance tax, higher taxes on second homes for overseas buyers, higher road taxes and higher duties on alcohol, tobacco and sugary sweet drinks, all of which have long-term health consequences. But the most important and urgent discussion to be had is about the Dr Worrell’s views about the high debt to GDP ratio which can often mean that a government is far less not credit worthy than one with a low debt to GDP. But Dr Worrell is not exactly wrong, since few things are that black and white, but he must put his case; having the ability to fund one’s credit – whether household or government – is the key to the modern management of finances. However that presupposes a number of things, such as reserves, or the savings one has in the bank, or having the necessary protection insurance in place. If not, for households sudden shocks, such as unemployment, the death of the breadwinner, or unexpected expenditure can often upset the applecart. The same goes for governments, with the only difference being that governments have the freedom to print money and inflate away its debt. Given this, we are not sure if there is reason and logic in Dr Worrell’s views, since he fails to go in to detail, either out of the belief that no one would understand what he is talking about, or, and I am sure this is not the case, he himself does not know what he is talking about. But the view that somehow it is economically more rational for Barbados to raise money in the local money markets with a low credit rating, at punitive rates of approximately 15 per cent annually, when it could do so in the low interest international markets, should be fully explained.

If the DLP government was in a position to borrow money in the UK, Japan or the US, where base rates are all below one per cent, thereby paying a few basis points above that rate – for example one per cent plus 400 basis points – that would be a saving of about ten per cent a year. I am not a mathematician, but, for example, with a loan of Bds£1bn, paying 15 per cent interest a year, that would cost taxpayers over roughly $150m dollars a year over the period of the loan; but at five per cent, it would be a saving of about Bds$100m a year. Can Barbadian afford to waste that amount of money while piling up Bds$1bn of foreign reserves? That is more than it would take to fund a small retail balance sheet bank.

All this is theoretical since Dr Worrell has not told us what policy initiative he would like to see in order to rescue the economy. Is he in favour of QE, or does he favour what Robert Shiller, often described as one of the world’s top 100 economists, calls the paradox of thrift? Shiller tells us: “There is one way out of this trap, but only if we tilt the discussion about how to lower the debt/GDP ratio away from austerity – higher taxes and lower spending – toward debt-friendly stimulus: increasing taxes even more and raising government expenditure in the same proportion. “That way, the debt/GDP ratio declines because the denominator (economic output) increases, not because the numerator (the total the government borrowed) declines.”

As we have seen with Cyprus, read Barbados. If a small nation has a large budget deficit, it will be forced to borrow more than it raises in revenue, leading to a decline in credit worthiness and subsequent downgrading by the credit agencies. If the real interest rate on debt is greater than the real rate of growth, the economy is heading for a storm. If Dr Worrell does not agree with this economic consensus view then he ought to say and explain why not.

If all this is not convincing then I refer him to Reinhart and Rogoff (This Time is Different), and Yeva Nersisyan and L. Randall Wray, who quite clearly and rightly suggest that short-term higher government debt is acceptable in the short term, but in the medium to long term may impact on growth. Earlier the Central Bank had announced changes to its interest rates in order to protect the ‘small saver’, it claimed. But with official interest rates running at about three per cent, but with the new protection rate at 2.5 per cent, then small savers are still losing real purchasing power. More important, it is very difficult to believe that inflation in Barbados is running at 4 per cent, or five per cent, or even ten per cent. I believe that the real inflation rate in an import-dependent economy such as Barbados must be at the minimum of 15 per cent. We import commodity inflation, and corrupt traders not only pass the full inflation rate, they add to it to make a higher profit on commodity price inflation to boot. The only way to control and monitor this effectively is to create a prices and incomes commission, but this idea is not popular with the so-called Social Partnership.

Finally, under Dr Worrell’s leadership for over five years, the Central Bank has failed to deliver any sustainable monetary policy to return Barbados to the level of prosperity it aspires to and deserves. Maybe his communication skills, especially when discussing complex financial issues, are not the best. Then he should get training. However, his latest outburst should be seen in the context of economic policymaking and, as such, raises questions over his suitability for the position. In the end, despite his soothing reassuring words, the brute reality is Barbados faces a long period of economic weakness, with all the social problems that will bring in its wake. Time is short.

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

  1. old onion bags April 11, 2013 at 10:20 PM #

    Change the title Mr. Austin….Failed? …Are you sure you din mean planned? Once a dream, twice a charm….this has been happening way way too often now…How else could one interpet it..

    Like

  2. islandgal246 April 11, 2013 at 10:25 PM #

    I wish you could make this shorter and sweeter Hal!

    Like

  3. Just Wondering April 11, 2013 at 11:02 PM #

    “Trinidad and Tobago’s unemployment rate currently stands at 5 percent, according to Minister of Trade and Industry Vasant Bharath.

    The Minister made the revelation during an address to members of the Indian High Commissioner to Trinidad and Tobago, in collaboration with InvesTT and the Trinidad Chamber of Industry and Commerce.

    Trinidad’s economy grew at 1 percent in 2012, according to data from the United Nations Economic Commission for Latin America and the Caribbean, and is projected to grow at a clip of 2.5 percent in 2013.”

    Copied and pasted. Not my data.

    Interestingly enough our neighbor is in reasonalbly good shape. Is FS and his team that blamed the “world recession” on Barbados’ bleak outlook familiar with our neighbor’s somewhat impressive economic standing? Also FS’ side kick that has his office located in the building built by JMGM Adams sings the same tune about the European recession being the underlying factor behind the stagnant local economy. That message is falling on tired ears and is a false message, As long as that unimaginative group remains in charge, investors will continue to lie low because their is a certain level of confidence that has to exist to excite investment. That excitment is non-existent at this time and the gentleman with his office in JMGM’s building did not excite anyone capable to invest this week with his too little too late message.

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  4. can't wait April 11, 2013 at 11:51 PM #

    Will this economy end up like Jamaica? Right now, Jamaica is almost begging the IMF to sign off on a loan for them. Is capital fight going on in Barbados? That is how the Jamaica and Guyanese economies started to decline. The business people has no confidence in the governance of this country.

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  5. ac April 12, 2013 at 6:25 AM #

    All this long doom and gloom talk .Waiting for Hal to do as he says in the articles and to take his own advice “stop talking and act” He seems to have all the answers now why not take action five years of long talk hiding behind the computer has obviously done nothing for the babados economy
    As a native of the soil as you so insist i belive it would be patriotic and dutiful of you to act rather than talk.

    Like

  6. David April 12, 2013 at 6:33 AM #

    @Hal

    Barbados is a country with a conservative ethos. Let us look at education and cricket as examples. There is an obvious need for reform but it goes against the grain to do so. We are therefore happy to beat T&T in cricket within two days although it points to a declining standard here as well. Prime Minister Mitchell et al have pointed to the need to change the way we educate our people if we want to compete on the global stage. Then there is the political system which works for a few and compromises the doctrines of a democracy. Don’t talk about the civil service, crime fighting and the lot.

    What it points to is a comfort level with what we know. Caribbean societies are unraveling, Jamaica, Grenada, St. Kitts etc. They all have high debt/GDP and rising crime. The Caribbean not to long ago was a geography known for its stable societies i.e.low crime etc.

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  7. ac April 12, 2013 at 6:46 AM #

    Btw Hal you can take comfort in the fact that another true Native of the soil CJ Marston Gibbons did not just talk the talk but walk .

    Like

  8. David April 12, 2013 at 6:48 AM #

    The capacity for people to push for change and offer different ideas is not in the capacity of everyone. We are all different and bring different things to the table. In the economic mess which we find ourselves we need everyone at home and abroad to toss their ideas in the pot. All around us we see countries falling like 9 pins, it is therefore obvious Barbadians are right to be concerned.

    The Governor’s new approach is to chide journalists for being negative. Hello Gov, they are only reflecting the mindset of most Barbadians. It will take our leaders to communicate effectively to bolster a sagging confidence and enthusiasm; without it we go nowhere because it quells the human sprite.

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  9. Ron April 12, 2013 at 8:07 AM #

    There is no magic wand to end the economic crisis go around the world country by country and this is pellucidly clear. Barbadians whether we like it or not have to be patient , be strong , believe in their country. We have weathered many storms before all the way back to the Atlantic slave trade. We shall overcome the current economic storm once we pull in the same direction. The gloomists like Hal Austin and Ryan Straughan are not helping therefore ignore them. They are deadweight to be thrown overboard because they are holding back the ship.

    Around Barbados we know they are people having it tough although the increasing traffic suggest otherwise. Are Barbadians still buying cars? It looks that way the roads are clogged with new vehicles. The concerts,shows,events,sports,cultural affairs have not ceased Bajans young and old are out there spending.. Commerce and construction certainly appear healthy from activity observed. Even unemployment has decreased.

    The social services are strong and intact. The clarion call from GOB must be let us continue to work together better days are coming. We must set our faces against the doom and gloomers who populate BU. We defeated their arrogance at the polls we will defeat their effort to bring our country down. Barbados remains the number one developing country in the world the Central bank governor knows of what he speaks. Forward ever backward never.

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  10. islandgal246 April 12, 2013 at 8:10 AM #

    ” Forward ever backward never”

    New Jewel Movement motto

    Like

  11. David April 12, 2013 at 9:04 AM #

    When will Sir Frank Alleyne who is head of government’s economic Council speak? Let us hope his view accords with the MoF’s announced fiscal approach. We know that unlike Ryan Straughn et al he cannot be accused of being BLP.

    Like

  12. Vincent Haynes April 12, 2013 at 9:43 AM #

    “Forward ever backward never”,was a phrase of Eric Williams of T&T

    Like

  13. Ping Pong April 12, 2013 at 9:54 AM #

    The saying “Forward ever, backward ever” is most certainly associated with Maurice Bishop and the New Jewel Movement. However before Bishop, the phrase was first popularly used by Dr Kwame Nkrumah the independence leader of Ghana and one of the leading advocates of the Pan Africa movement and a founder of the Organisation Of African Unity.

    Like

  14. David April 12, 2013 at 10:03 AM #

    We cannot get through as a country if we are conflicted. Our leaders must be persuasive in their communication that this is the road map. The general election is behind us.

    Like

  15. ac April 12, 2013 at 10:05 AM #

    Talk ! Talk! Talk! sick and tired of all this long diatrabe which does nothing to better .Those in position and have the knoweldge could make a differnce by leading by example.

    Like

  16. David April 12, 2013 at 10:28 AM #

    @ac

    Here is some advice, don’t read Hal’s blogs if you have nothing of value to add. Strategy begins with people being encouraged to put ideas on the table. Hal’s willingness to populate the public space with his views from years experience is refreshing. BU encourages all others to do the same. We will NOT always agree but it does not mean others cannot use the points offered as a jump off point.

    See disagreement and ides as just that and not as negative or positive. The fact the MoF and Governor now admit they will make some changes mean there is room for ideas and recommendation. This is the kind of positive tension which we need.

    Like

  17. ac April 12, 2013 at 10:30 AM #

    The govt past and present has been asking bajans and business to buy local product. how many have heed the call. If we are in thus together it is necessary for ALL to pull the load and not sit in the backseat and expect others to do all the pulling at the same time crticising.

    Like

  18. David April 12, 2013 at 12:49 PM #

    The flack has started with John Williams, the head of the private sector, pressuring government about the 6% increase in transfers and subsidies in this year’s Estimates.

    Like

  19. Lexicon April 12, 2013 at 1:54 PM #

    Caribbean societies are unraveling…

    It is quite easy to look at the current states of affairs in the Caribbean, and interpret them solely on the basis of a lack of vision on the part of its leadership. And even though this may seem true at fact value, we still cannot neglect the fact that the real problems lies far beyond this simple interpretation. Now, I wonder how many of us have given any thought to the fact that, a lot of the economic stagnation currently unfolding in the Caribbean today, is due primarily to the worldwide economic recession? And United States of America like many others, has had its share of economic difficulties; with a national debt now mounting too some $ 15.2 trillion dollars. So how can we honestly attribute this lack of effective leadership on the part of the Caribbean leaders, to a failed vision, couple with an antiquated academic system? When the truth of the matter is, a lot of our Caribbean brothers and sisters are still receiveing they education abroad? Let’s face it, the Caribbean haven’t as yet produced a leader with the kind of inventive ingenuity and insight as a Bill Clinton.

    Like

  20. Hal Austin April 12, 2013 at 2:30 PM #

    @ Lexicon

    Lexicon, you are partly right. I will give two examples: a leading businessman has just leased 30000 acres of land in Guyana with the explicit intention of meeting future commodity needs.
    This is incredible forwarding thinking and business initiative.
    Why cannot the NIS do something similar to as part of our food security policy?
    Second, among the new businesses worldwide are Starbucks, Costas and other coffee businesses. Jamaica, an economy in real trouble, has Blue Mountain coffee. Why can’t our business people use Blue Mountain coffee as the basis of a new global enterprise?
    Ideas, acumen, confidence, experience, funding, all these and more are needed.
    I will add another for free: how about our rum industry, the only world class commodity we have? Why can’t government build up this industry? I will tell you why: we have the wrong people in politics.

    Like

  21. David April 12, 2013 at 2:41 PM #

    @Baffy

    These utterances from John Williams in the news today bring us back to the symbiotic relationship which is required between public and private sectors. Did we hear Minister talking about improving business faciliation this week? The private sector may push to grow projects/business but if setting up to comply with local legal and the courts are inefficient read slow, where do we go from here?

    Like

  22. David April 12, 2013 at 2:48 PM #

    @Hal

    The issue here is not idea generation, we have not been able to build channels of communication between our Caribbean countries which is conducive to easy dialogue. And yes there is Caricom.

    Like

  23. Hal Austin April 12, 2013 at 2:59 PM #

    @ David

    I believe in regional unity, and think it is necessary if we, the English-speaking nations, are going to advance. But Caricom as it is presently structured is a failure.
    Where is the democracy in Caricom. Even getting access to their reports they charge citizens, the very taxpayers who pay for it.
    It must be the only international body that charges for online reports, which cost virtually nil.
    Look at Clico.

    Like

  24. Crusoe April 12, 2013 at 5:17 PM #

    @HaL Austin ‘ ‘I will tell you why: we have the wrong people in politics.”

    Boss, you like you is a genius…..like DUH!!!!

    Like

  25. ac April 12, 2013 at 7:32 PM #

    govt has a decisions to make and very quickly wether to use the 600million as they proposed to build industry and create growth which will create jobs and in turn put money in peoples hands to stimulate the economy. wether they are going to cut jobs in the public service as a way of savings and expanding the safety net which would be problematic as the unemployed seek further assistance,wether they are going to sell the public assets to private investors. Either way it is all about generating income and soft heart and hands does not get the job done, the first option is the best even if it means increasing the debt cause in the long term the benefits derived would be sufficient to override any short term losses. Enough of this doom and gloom.

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  26. David April 12, 2013 at 8:03 PM #

    Minister Chris Sinckler needs to answer why has the subsidies and transfers increased year over year by 7%. The MTFS is a key strtaegy to reducing the deficit and by the results the government has clearly not been able to exercise the fiscal discipline to continue the downward trend. The question again, why?

    Like

  27. old onion bags April 12, 2013 at 8:25 PM #

    Am I the only one…or is it like …all gone reallllllllllllll quite. Did I hear a snore or a grunt or something? Talk about same ole..now that is an understatement

    Like

  28. Well Well April 12, 2013 at 8:25 PM #

    One wonders why the government keeps asking taxpayers to buy local, yet annually increasing the food import bill………….is it at one billion yet? Where is cost you less getting the food that they are selling to Bajans from?

    Like

  29. old onion bags April 12, 2013 at 8:36 PM #

    Well Well
    Do you think they really serious about anything oher than when is their nxt pay cheque……elections over buddy. Auto pilot turn back on….

    Like

  30. ac April 12, 2013 at 8:37 PM #

    the gov also have to stop listening to the psychological babble of the malcontent whose job is to paralyze them into doing nothing,

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  31. David April 12, 2013 at 8:38 PM #

    The point has been made by BU before and it is the matter of confidence as well. The banks are liquid but no one is borrowing.The head of the BCCI Lalu Vaswani made the same point tonight. The government should try to recall the Sandiford era, when the private sector and government are not harmonize bad things will happen. Again BU ask, why has transfers ans subsides increased?

    Like

  32. old onion bags April 12, 2013 at 8:40 PM #

    The bush overunning Four Season now in the 5th n 6th generation..D rebarrs rust turning the concrete brown…..120 mil bond went checkery…..NOT A WORD…not a whisper

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  33. David April 12, 2013 at 8:42 PM #

    The government has changed the minimum savings rate rule i.e. minimum will only be paid on individual deposit, financial institutions are now free to fix all other rates on deposits. There is a view that this is an attempt to manage the interest cost of government on instruments they offer.

    Like

  34. David April 12, 2013 at 8:44 PM #

    @Onions

    It is not correct to say not a word. Minister Sinckler indicated during the Estimates debate that the matter is covered by a non disclosure agreement bhowever Barbadians will hear something soon.

    Like

  35. old onion bags April 12, 2013 at 8:52 PM #

    When n what more ?…….like you forgetting the proven n tested strategy of the past….mention and move on…..it go happen all ova again …watch.

    Like

  36. old onion bags April 12, 2013 at 8:56 PM #

    Like the 5 John Deere beast ..that were on order since August……Like Kellman manufacturing increase of 50 % in 8 months…..doan mekk mock sport….

    Like

  37. Well Well April 12, 2013 at 9:03 PM #

    Old Onions……………….a regular train wreck, that none can stop.

    Like

  38. Bush Tea April 12, 2013 at 10:45 PM #

    @ Old Onions
    “The bush overunning Four Season now in the 5th n 6th generation..”
    **********
    Bushie takes offence to that characterization…
    You mean vines overunning…. 🙂 ….right?

    Look Onions,
    The damn elections done! Stop with this nonsense of sounding like you want the country to mash up so that wunna could feel that the voters made the wrong choice….
    THERE WERE NO RIGHT CHOICES FOR BAJANS OK?

    4 Seasons was a stupid greedy idea from the very beginning… Just like all of those ugly ostentatious buildings blocking the beautiful West Coast view of Barbados…
    We have been on the path of destruction for MANY years now…led by BOTH Ds and Bs.

    Like

  39. old onion bags April 13, 2013 at 5:21 AM #

    @ Bushy
    Like the late Alfred Pragnell once told in one of his short stories….
    TEA FOR TWO

    Umelda:
    “Lottie ya din have to machup the young man character likedat..”

    Lottie:
    If D man is womaniser and a jailbird, He is a womaniser and a jailbird..and if he duz mackup people clothes..he duz pop dem up…

    Umelda:
    Look guh from rund mah, .. ya ole pottsie face breadfruit swapper…I sorry I din have lil duppy dust to put in ya tea……

    Lottie: Ya think you one got house….I gone child..I got roof tooo…and praise D Laud MINE DOAN LEAK !
    ***************
    Whalosss ! …… Love vine..if D shoe fit….wear it

    Like

  40. millertheanunnaki April 13, 2013 at 5:55 AM #

    @ ac | April 12, 2013 at 7:32 PM |
    “whether they are going to cut jobs in the public service as a way of savings and expanding the safety net which would be problematic as the unemployed seek further assistance, whether they are going to sell the public assets to private investors.”

    Why are you talking like that, ac? These are no longer options available. They were ruled out during the last elections to obtain the ‘No Privatization, No Layoffs’ mandate under a DLP administration.
    Unless you, like a true turncoat, have now seen the light and embrace them not as options but as “sine qua non”. Good for you and your more sanguinely intellectually sober alter ego for a husband.

    BTW, where is this government going to find money to help finance that fiscal fudge figure? Certainly not on the international money market? Any progress with the US$33 million BoP support loan application?
    Why do you think the IDB backed off the Four Seasons restart project thereby forcing the government into the hands of the bond holders? No money without fiscal restructuring involving privatization and manpower adjustments in the public sector.
    It can always dip into the NIS or even float a bond. What about getting those nationalistic Bajans like yourself to move some of their hoardings currently sitting idly in banks and credit unions into government paper to prove their loyalty, commitment and most of all confidence in this DLP administration?

    This is not doom and gloom, ac. This is for real as the first pieces of fiscal shit hit the fan.
    Yes go ahead and cuss OSA for causing this situation. Go ahead and thrash your newly hired whipping boy Ryan Straughn or even Hal Austin the overseas scapegoat for the ills in Bim.

    The fiscal and monetary chickens are coming home to roost and are walking right through the mill yard to eat the miller’s corn before entering the IMF barn to roost while being scoped by the S&P fox and the Moody’s mongoose. Like cogs in a gear lock things are beginning to fall into place to allow the political vault to release the genie.

    Vaya con Dios, mi amigo ac!

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  41. can't wait April 13, 2013 at 7:17 PM #

    Are we going to have a Cyprus in Bim? Seems that is going to be the case. Why is it that Credit Unions are requested to put more money in commercial banks so that it will force those banks to buy the worthless bonds that the government is trying to sell that nobody wants.. Trinidad banks, I know you all are busy savvy, do not allow Sinkliar to dictate to you all.

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  42. Hal Austin April 14, 2013 at 1:33 AM #

    @ Can’t Wait
    It is a further example of the failure of banking regulation and policy.
    Credit unions, trade unions, cooperatives and other mutuals should be encouraged to form unions as a way of diversifying financialisation.
    But governments of both colours have preferred to sell off BNB, and encouraged Trinidadians and Canadian banks to exploit local savers.
    A credit union and the creation of a post office bank are much needed.
    The prime minister and minister of finance must act with speed to create these institutions.

    Like

  43. Hal Austin February 26, 2017 at 8:57 AM #

    David,
    Apart from the correction that the Bank of England spent £375bn, and not £375, this Notes From a Native Son is still the most perceptive analysis of the Barbadian economy post-2008 that I have seen so far, including those notes from the IMF and CDB. Dr Worrell cannot say he had not been warned. Sinckler is just too stubborn to listen to a non-DLP voice.

    Like

  44. David February 26, 2017 at 9:10 AM #

    @Hal

    You made some good points in the Notes but the bottomline is that we need to create a forum in Barbados to distill all ideas, shortlist what we want to achieve in line with a national strategic plan and IMPLEMENT!

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