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.

These two statements show beyond a shadow of doubt that the current crisis, is not going to be abated by the noise coming from the apologists of the government and opposition. When stripped of their diplomatic sheets, they convey a bankruptcy rampant in both of these political dinosaurs (BLP and DLP). The simple truth is that both parties have paid nothing but lip service to creating a new entrepreneurial class and have bogged themselves down in economic models that are no longer relevant. We are left with ego based arguments from economists, who are merely singing for their political supper.

Both Governors have failed to admit that the Central Bank itself is a model of a decaying economic management structure that can scarcely move beyond collecting data and regularizing the commercial banks. The Central Bank itself can do little to facilitate any radical changes in the economy. Indeed, it was Dr. Blackman himself, who once stated that the Governor of the Central Bank is “a creature of the Minister of Finance”. We believe that his statement justifies our position about the relevance of the Central Bank in economic planning. The Minister of Finance is a politician first and foremost, if Dr. Blackman’s position holds true; it means that Governors of Central Banks are actually political creatures!

Recently, while addressing the Barbados Association of Insurance and Financial Advisors, the current Governor of the Central Bank, Dr. DeLisle Worrell, suggested that the Barbados financial system is “failing” innovators. Dr Worrell told his audience that he did not have the answers for filling “gap” which exists between traditional financing and that for new business in such areas as energy and culture. Such an admission from the Governor would not have been good news for the hundreds of citizens trying to get their businesses off the ground.

When we examine the two positions of the Governors, we are forced to ask: What is the real function of the Central bank. Is it merely a political tool or is it incapable of assisting with the emergence of the new economy?

We believe that a $100 million Fund should be immediately set up, to jump start small businesses. We also believe that the establishment of at least six Entrepreneurial colleges, with rolls not exceeding 200 each will assist in developing present and future business persons.

It is time for political gymnastics to end and real progressive policy changes to be made. It is also time for the role of the Central Bank to be revisited.

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No Comments on “Central Bank of Barbados: Political Tool or Facilitator of Economic Development?”

  1. LOOK May 1, 2013 at 7:37 AM #

    @ Baffy

    Nothing humorous about you, not anymore. . . . The joke is on who. . . . dumb jackass!!!!!

    Like

  2. BAFBFP May 1, 2013 at 8:02 AM #

    Look

    You sound like a sissy and pun this blog the last thing that I is do is get in a pissing match wid de women … so ga long hear, unless you feel a need to defend two dinosaurs …

    Like

  3. LOOK May 1, 2013 at 8:10 AM #

    @ Baffy

    Seriously, you don’t want to rumble in the jungle with this lady LOOK. I will verbally hurt you, much more than I have already.

    Like

  4. BAFBFP May 1, 2013 at 9:18 AM #

    See wah I tell yah … Look is a woman … Not my concern wah ever it is that you feel you could do… Women and me is luv … not fight

    Like

  5. Observer May 1, 2013 at 9:40 AM #

    I found this New York Times article interesting reading,

    NEW YORK TIMES
    Economists Agree: Solutions Are Elusive

    By EDUARDO PORTER

    Published: April 23, 2013

    Last week the International Monetary Fund hosted a conference of some of the world’s top macroeconomists to assess how the most intense crisis to have shaken the industrialized economies since the Great Depression has changed the profession’s collective understanding of how the world economy works.

    Shawn Thew/European Pressphoto Agency

    Olivier Blanchard, chief economist of the I.M.F. He said economists don’t know “what financial stability actually means.”

    Two things struck me about the conclave. The first was hearing George Akerlof, a Nobel-winning economist from Berkeley, take to the lectern to compare the crisis to a cat stuck in a tree, afraid to move.

    The second was realizing how, after five years of coping with the consequences of the disaster, there is still so much uncertainty about what policies are needed to prevent another financial shock from tipping the world economy into the abyss again a few years down the road.

    “We don’t have a sense of the final destination,” said Olivier Blanchard, chief economist of the monetary fund. “Where we end I really don’t have much of a clue.”

    In determining what is a sustainable level of government debt, or whether central banks should focus on anything other than inflation, or what should be done to prevent further bubbles from destabilizing economies, he argued “we are still very much navigating by sight.”

    If you are one of the nearly five million American workers who have been unemployed for over six months, or one of the six million Spaniards, three million Italians or 1.3 million Greeks without a job or a clear prospect of finding one, this amounts to a tragedy.

    Considering that the large and complicated financial institutions that set off the crisis five years ago have only gotten larger and more complex, the gap in knowledge is downright scary.

    It is scarier to consider how politicians have chosen to ignore much of what the profession has learned from the experience.

    Berkeley’s David Romer counted six shocks that hit the United States in the last three decades alone. The economy dodged the bullet in two — the Latin American debt crisis of the 1980s and the Russian default in the 1990s, which led to the bailout of a hedge fund, Long-Term Capital Management.

    It took a hit in three — the collapse of much of the savings and loan industry in the late 1980s, the 1987 stock market crash and the dot.com implosion. But it got hammered in the last one.

    Economists used to think it was obvious how to contain such shocks. No point trying to stop a bubble from inflating, they thought; it would be impossible to identify in the first place. The best a central bank like the Federal Reserve could do is stand ready to cut interest rates after the bubble burst, patch up the financial system and set the economy back on track. In terms of budgets, governments should aim for a prudent level of debt to retain space to borrow and spend when it was needed.

    Now, interest rates have been near zero for years, and growth has not been restored to acceptable levels. And few if any of the economists gathered at the International Monetary Fund’s headquarters in Washington would venture a guess about what level of debt would be prudent these days.

    On the eve of the financial crisis, Spain’s net debt was just over 25 percent of its economic output. The ratio of net debt to gross domestic product in Ireland hovered around 11 percent. Martin Wolf, chief economic commentator of The Financial Times, said that Britain’s debt ratio was close to a 300-year low, way below its level during the Industrial Revolution.

    It wasn’t low enough, apparently. Five years later, Ireland’s bailout of its banks took its net debt to 102 percent of its economic output. Spain’s debt hit 80 percent of G.D.P. And Britain’s reached 86 percent — the highest since the 1960s.

    This is of enormous consequence. One lesson from the crisis — first learned in the 1930s and corroborated in several contemporary analyses — is that when interest rates lose their power to stimulate the economy, additional government spending can help generate real growth. Still, the fear of “excessive” debt has led many governments to cut spending even in the face of economic stagnation.

    Countries like Ireland and Spain have pretty much lost their ability to raise money in financial markets. They are now struggling to reduce debt with little success: cutting public spending in the midst of severe downturns only makes economic performance worse, adding to the debt burden.

    Yet even in Britain or the United States, which can still borrow at near-record-low interest rates, governments have taken to cutting public spending at the expense of growth and jobs.

    Perhaps this is natural. After all, the crisis upended a consensus. Economists and policy makers bred to think that all that was needed to run a prosperous economy was to keep inflation low, strive for fiscal balance and deregulate have found themselves in a more complex world. In this world, financial bubbles matter, capital flows are of dubious merit, low interest rates fail to stimulate growth and government spending becomes the only tool with real traction to spur economic activity.

    And there is reason to be cautious. With total government debt in the rich world stuck at around 100 percent of its combined economic output, there is a legitimate fear that a rise in interest rates could tip off a financial death spiral. Moreover, if countries with debt levels well under 50 percent of G.D.P. were so devastated by the crisis, it is hard to imagine what might happen to them if another were to hit them.

    Still, the argument against debt is often overstated. Disagreement and uncertainty among economists have given the political systems in Europe and the United States ample license to engage in austerity policies that frankly are proving counterproductive — making recovery more difficult and painful.

    In his assessment at the end of the conference, Mr. Akerlof argued that the response in the United States had been reasonable. From the bank bailout to the fiscal stimulus to zero short-term interest rates, “the economic policies postrecovery have been close to what a good, sensible economist doctor would have ordered” for the stranded cat.

    But other economists were not quite as sanguine. Indeed, one take-away from the economic conclave is that it may be a fantasy to think that the world’s economies can be steeled to withstand a shock like those the financial system can provide. If so, the urgent task is what kind of limits should be imposed on banking and the rest of finance to temper its propensity to careen toward disaster.

    Financial regulation is being tightened around the world. Banks are being required to raise more capital than before. Bigger banks face tougher rules. Still, there is no consensus on which new institutions might be needed to monitor and temper finance, or how tough the rules should be.

    What good does the modern financial system do, for the rest of us? What determines financial fluctuations and shocks? How do they affect the broader economy? What can governments do to make them less disruptive? Economists have few answers.

    “We don’t have a clue of what financial stability actually means,” Mr. Blanchard confessed.

    Mr. Romer said, “Five years into a crisis of this magnitude, we should be, ‘Oh my God, the cat has been in the tree for five years, it’s time to get the cat down out of the tree and figure out how to make sure the cat doesn’t go up the tree again.’”

    E-mail: eporter@nytimes.com;

    Twitter: @portereduardo

    Like

  6. Bush Tea May 1, 2013 at 9:44 AM #

    The study of economics is a scam and a sham.
    …think snake oil….

    Like

  7. Well Well May 1, 2013 at 10:15 AM #

    Bushy…………………….you have some explaining to do about the ILO debacle now exploding………….i thought you told me they were a fly by night operation with no teeth, well that world wide body with no teeth are about to put the bite on the government of Barbados.

    Observe………………..i like the cat stuck in the tree that can’t move description, that cat may be stuck up there for another 50 years, having outlived all it’s nine lives while there before dying, is there anyway you can get this current administration to read this article, as i said those boys do not keep up on foreign news.

    Like

  8. Well Well May 1, 2013 at 10:17 AM #

    And local economists (soothsayers) will have us believe they know what the hell they are doing, and what will happen in the future………….they must be psychic hotlines.

    Like

  9. David May 1, 2013 at 10:18 AM #

    @Observer

    It appears from the article you posted the government of Barbados is in deep doo doo and by extension Barbadians. If we read his position correctly he is saying that if reduced interest rates is not acting as a stimulant to the economy the way it has in the past then we have to spend to stimulate economic activity. The problem we have is that we have been fixated on guarding forex which is important BUT as important is not allowing the economy to stall. As Bush Tea would say ‘we goose seems to be cooked’.

    Like

  10. Observer May 1, 2013 at 10:28 AM #

    As a member of the public following these issues in the local and international media I have concluded that Barbados and the western world are in uncharted waters in terms of economic policy and answers are elusive. The much maligned Central Bank governor seems willing to use his brain, think through issues and articulate a view based on his own thinking.

    Now from where i sit how do things look.

    What are your key macroeconomic performance indicators again:

    From listening and reading I think they are:

    Growth In real GDP;
    Employment;
    Debt to GDP and Fiscal deficit to GDP;
    The state of the currency;

    1. As I understand the current Central Bank governor, the state of the currency as measured by the foreign exchange reserves is the most important measure in BIM.

    Dr. Worrell seems to have been arguing that in the weak global economic environment and the structure of the barbados economy, growth in real gdp that is compatible with maintaining adequate reserves is challenging at best. Mr. Arthur , Mr. Mascoll, Mr. Hoyos and others seem to differ and appear to be suggesting that we can find growth from domestic sources and still maintain adequate reserves. For me, the burden of proof lies with Mr. Arthur, Mr. Mascoll and Mr. Hoyos on this one. The trend in the reserves is a downward one so i am with the guy who says be careful with the reserves.

    2. The government remains committed to maintaining levels of employment and social services. As I understand it weak growth has impacted revenues and that combined with maintaining employment and social services has led to higher deficits and an increase in debt levels. Mr. Mascoll, Mr. Hoyos, Mr. Straughn and a number of others have been calling for an urgent if not immediate program to reduce the deficits. I may be wrong but Mr. Mascoll seems to be calling for more of a switch in spending from the current to capital account rather than a reduction in spending per se. The government and the Central bank leadership seem to be arguing that if you have enough reserves, if foreign exchange led growth is unlikely and the commercial banks and the NIS have adequate liquidity, there is no need for a crash austerity program such as 1991, due to the likely negative impact on growth and social stability.

    To my simple mind they seem to be saying that in the current global economic environment fixing the deficit in the near term may lead to the mother of all recessions because there is unlikely to be adequate private spend to replace the reduction in government expenditure. This in turn could actually lead to lower revenues and bigger deficits as seems to have been the experience in the UK, Spain and Greece for example.

    For me this is a tough one, there seem to be some complex tradeoffs involved, but I think its unfair to paint the CBB as a political tool because there is a strong economic case against austerity and rapid budget balancing in a weak economy. its not clear to me that the deficit hawks are outlining the tradeoffs at all.

    Like

  11. David May 1, 2013 at 10:37 AM #

    @Observer

    That is some heady analysis there BUT we always come back to the unsettling question – how long can government sustain current strategy given the current trajectory.

    Like

  12. Observer May 1, 2013 at 10:46 AM #

    David, stimulus spending will increase the deficit and debt in the near to medium term. Also the amount you can spend as a government is determined by how much financing you can raise. The local consensus seems to be that we must balance the budget now. My previous post was way too long but my simple mind is trying to say that I find that the tradeoffs are absent from the arguments locally.

    What I take from the NY Times article is that we are in uncharted waters and old rules may not apply. The Credit rating Agencies and the financial institutions that use ratings as god given guidelines have effectively forced many governments into austerity programs. We got downgraded because we did not cut expenditure fast enough and we could not grow fast enough in this weak global environment. As a result of the downgrade the lack of access to financing or higher cost of it could force us to cut expenditure even more and grow even slower.

    Dr. Worrell seems to be saying to us lets think for ourselves and not be bound by rules and guidelines for a normal economic environment. He may be wrong on a number of things but at least he is thinking.

    Like

  13. islandgal246 May 1, 2013 at 10:47 AM #

    The underground economy is thriving, many trades people are working. I have been trying to get someone to repair a gutter and do some carpentry and several of them are busy. The recession is hitting the retailers, my suggestion is to those clerks and sales associates is to get a skill. Plumbers, electricians, masons carpenters are in demand as well as agricultural workers and gardeners. Survival is for the skilled and the fittest.

    Like

  14. Observer May 1, 2013 at 10:48 AM #

    David boy when the wicket bad sometimes all you can do is occupy the crease and eke out some ugly runs.

    Like

  15. Observer May 1, 2013 at 10:51 AM #

    but Islandgal the Elites screamed bloody hell and continue to scream as the government tries to build a case for scaling back the spend on university education and a shift to the polytechnic and bcc.

    read the 2012 budget

    Like

  16. Observer May 1, 2013 at 10:53 AM #

    Islandgal what I would like to see is some of the artisans link up with the uwi graduates and take the services they offer to a higher level.

    Like

  17. Observer May 1, 2013 at 10:55 AM #

    a 24 hour plumbing and other services with an online infrastructure, payments being made online or via cell phones maybe too much to dream of

    Like

  18. David May 1, 2013 at 10:55 AM #

    @Observer

    Maybe so but there must still be a sound tactical plan even on a bad wicket with all the playings doing their damnest to execute.

    Has government been exercising optimal fiscal discipline?

    Has the leadership from public and private sector synchronised on the plan which we need to execute to go the full five days?

    Is there the opportunity to execute transformational strategies even in these conditions ie. Match winning innings. Bad wicket or not we have to play to win.

    Like

  19. Observer May 1, 2013 at 10:59 AM #

    David, to me the answer is clearly no. Large parts of the society are wedded to their current business models and practices, and have not even begun to envisage a new normal. The various interest groups are dug in and are defending their traditional interests.

    Lets see the response to the revised strategy and the budget.

    Like

  20. David May 1, 2013 at 11:03 AM #

    @Observer

    Agree with your last comment AND this is where an effective communication strategy should help. Prime Minister Stuart needs to watch the movie The Kings Speech.

    http://www.kingsspeech.com/

    Like

  21. Observer May 1, 2013 at 11:10 AM #

    Dr. Worrel, Mr. Sinckler and Mr. Inniss are showing leadership, the push back from the elites and interest groups is most interesting to watch.

    The private sector leadership seems fixated on stimulus and deficit reduction. Not sure both are compatible in the medium term.

    Lots of properties are on the market for sale, but offer prices still seem high, how will the market clear at these prices? Maybe a change of government or some policy initiative will bring back the building boom.

    These are complex and unpleasant tradeoffs and the administration itself may be quite divided on the way forward, while the opposition is not articulating a clear position either. If we take the lead from their chief economic spokesperson and switch to capital spending do we build highways to nowhere like Japan did. will the banking sector locked into investment guidelines based on credit ratings offer the financing? If we go full austerity as per Mr. Straughn what is the channel for private led growth to replace the lost public spend?

    Like

  22. David May 1, 2013 at 11:14 AM #

    In this scenario leadership as a KPI can only be measured if government gets buyin from the private sector. It is not leadership because you or the next person opines. In the final analysis the Prime Minister must exude the leadership to which we speak.

    Like

  23. Observer May 1, 2013 at 11:20 AM #

    We are up the creek, what sources of paddling do we have:

    1. Adequate reserves (don’t lose that);
    2. Surpluses in the banking sector and NIS (how are these best utlized):
    3. A good brand name in the high end tourism, hospitality and real estate market (how do we leverage: Four seasons maybe, support apes hill, almond restart, energy efficiency drive in sector)
    4. Good name in international business (improved business facilitation)

    what sources of paddling do we need to develop:
    1. means testing for some social services;
    2. Revamping and/or elimination of statutory bodies
    3. Reduce energy costs across the economy;

    maybe some statutory corporations should be brought back into the civil service where their spending can be better monitored or be foreced to operate with a maximum subsidy which could for e them to be more commercial in orientation.

    None of this is even nearly easy to do

    Like

  24. Observer May 1, 2013 at 11:26 AM #

    the government deserves it share of the blame, but I think we miss the point that in an economy and democracy like ours institutions and organizations outside the state are major actors. I think we have focused so much on government and not asked enough questions of the other key actors.

    For example, companies and organizations have a hard time changing and adjusting to new environments. take LIME for example, the change will have to come from FLOW. has the private sector really come under scrutiny?

    Like

  25. David May 1, 2013 at 11:33 AM #

    @Observer

    The government needs to do a better job bring partners together in the national interest. While you have focussed on economic/monetary issues there is the justice and law and order systems which must be managed in parallel. It is a bad situation which demand that leaders must lead.

    Like

  26. Bush Tea May 1, 2013 at 11:51 AM #

    @ David
    The very FIRST thing that we need to do is identify what SUCCESS looks like. We will never make any progress when everyone have a completely different and often diametrically opposite idea of where we want to be.

    THAT is the first leadership step, and it calls for VISION.. (Without which we all will perish).

    Some want nuff FOREX
    Others want growth
    Others looking for austerity
    Some just want money (stimulus)
    Bushie want Islandgal…
    ..and a lot don’t even know what they want

    No wonder we are going nowhere. SOMEONE needs to lead the discussion of what we REALLY want and then perhaps we could move on to how we can possibly get there.

    Like

  27. islandgal246 May 1, 2013 at 11:53 AM #

    Observer | May 1, 2013 at 10:53 AM |

    “Islandgal what I would like to see is some of the artisans link up with the uwi graduates and take the services they offer to a higher level.”

    I totally agree and have been saying this for many years. We need UWI to get real and offer these people courses that will help this country. Many colleges and universities offer degree courses in Furniture design, Electrical installation, plumbing and fixtures installation. Check out what the University of Trinidad and Tobago is offering. What is presently being offered are basic courses and that is why there is so much mediocre being done. Tradesmen need to further their training. The problem is the mindset is that when you have a degree you can charge exorbitant prices.

    Like

  28. islandgal246 May 1, 2013 at 11:54 AM #

    correction …mediocre work being done.

    Like

  29. Well Well May 1, 2013 at 12:39 PM #

    Islandgal………………..very sound advice, when one sector of the economy is mired in recession it opens doors for other sectors to prosper………..skills training is paramount and recession proof.

    Like

  30. Well Well May 1, 2013 at 12:42 PM #

    Observer………………very good information, here is a video now making the rounds on the internet amongst the young people from Europe, North America, etc.

    Like

  31. Well Well May 1, 2013 at 12:53 PM #

    Young people are not putting up with the old mentalities and the crap anymore…………the world has changed, and people’s needs have changed, someone needs to pass on that info to Caribbean leaders.

    Like

  32. Observer May 1, 2013 at 1:13 PM #

    interesting video.

    Like

  33. millertheanunnaki May 1, 2013 at 1:49 PM #

    @ Observer | May 1, 2013 at 11:20 AM |
    Observer, the miller-being hundreds of intellectual light years away from the action- just had to make a small input into your, as usual, erudite and blindly enlightening observations.
    But before making input into the economic meltdown scenario could you please explain the ‘partisan’ conclusion reached in the following observation you made?
    “Dr. Worrell seems to have been arguing that in the weak global economic environment and the structure of the barbados economy, growth in real gdp that is compatible with maintaining adequate reserves is challenging at best. Mr. Arthur , Mr. Mascoll, Mr. Hoyos and others seem to differ and appear to be suggesting that we can find growth from domestic sources and still maintain adequate reserves. For me, the burden of proof lies with Mr. Arthur, Mr. Mascoll and Mr. Hoyos on this one. The trend in the reserves is a downward one so i am with the guy who says be careful with the reserves.”

    How can Dr Worrell be against a stimulus package of $90 million but remains silently in favour of a $600 million proposed Capex stimulus without similar warnings of the severe negative effects on the foreign reserves that are not dwindling but fast disappearing day-by-day?
    Just look out for the flight of capital and remittance of retained profits in the coming months as investors and foreign-owned businesses lose confidence in the local economy.
    Don’t you think that the burden of proof also lies on the Minister of Finance Chris Sinckler to explain how he intends to finance the $600 million plus the massive deficit on the current account resulting in a fudge of the overall deficit to an imaginary $1.2 million?
    Given the prevailing financial market conditions this fiscal gymnastic exercise could only be performed by prescribing large doses of taxation on economic activity.

    We know your observations can be most informative and at times exceedingly appealing.
    But you seem keen to remain not as a participant ‘observer’ but as just a partisan critic in the BU gallery of theatregoers. Are you prepared to sit on the proverbial fence while your store of knowledge remains hidden and selfishly insulated from the possible pool of solutions to the economic crisis facing your dear beloved country?
    Why not use that insightfully analytical skills of yours and come up with some options the Minister of Finance can consider for his inevitable date with destiny and make the country pay the economic Pied Piper his due?
    Living above your material means without making major alterations to your lifestyle can only result in a date with the devil of destiny called Bankruptcy.
    When do you think, Observer, will such a rendezvous occur this year?

    PS: We also note how you purposely circumvent the tease made by David (BU) regarding the arrogantly silent indifference of the PM to shed some light on the fiscal and financial adumbration cast by the MoF. Are you going to take the bait and “observe”?

    Like

  34. millertheanunnaki May 1, 2013 at 2:20 PM #

    @ Observer | May 1, 2013 at 11:20 AM |
    “what sources of paddling do we need to develop:
    1. means testing for some social services;
    2. Revamping and/or elimination of statutory bodies
    3. Reduce energy costs across the economy;”

    These “observations” were put on the table for some time now and were blatantly rejected or totally ruled out by both the MoF and PM; and even yourself when you were at a different point of observation before February 21. What has changed in less than 3 months to inform your keen sense of urgency for radical change?
    You need to come with some new or different proposals. Or are you now willing to support a programmed of privatization and public sector restructuring (aka manpower rationalisation)?
    Don’t be afraid to call a spade a spade and call for significant changes like a 50:50 funding arrangement for the UWI, the disbanding of some statutory boards (CBC for example) and the outsourcing of functions aka privatization. What about the sale of majority interests in the air and seaports?
    Even your great admirer, ac, is coming around to the idea of jumping on board the bandwagon you seem keen to roll out for hire.

    Like

  35. Observer May 1, 2013 at 2:28 PM #

    well Miller my observation of the $600ml is that the projects are all foreign financed on the one hand and secondly add to foreign exchange earning capacity.

    For me the real question will be whether the private players or statutory corporations (with government guarantees) can come through with the finance to execute these projects in a timely manner.

    I am and have always been supportive of greater efficiency in delivery of public services.

    Like

  36. Observer May 1, 2013 at 2:53 PM #

    Miller I must admit to being lukewarm on certain aspects of privatization, though some may become necessary to close the government’s financing gap.

    Our experience with privatization of major utility type activities ahs not been all that good. We have LIME and BL&P as examples. I worry about ending up with monopoly providers (airport, seaport, sanitation, water) who may not be all that efficient and not very accountable.

    To me the privatization push is partly coming from a private sector which instead of seeking out now markets and opportunities are looking for a new, safe, protected, local monopoly type activity to exploit. The state for all its limitations has provided this private sector with first class air and sea links, educated and healthy workforce and law, order and security. Can this sector not innovate and help us out. Miller I am sure you are not on board with providing this new source of largesse for the same old staid private sector.

    For me public transport is already largely privatized. There is already a surplus of private providers on the lucrative routes. Will private providers service the rural routes like where I live?

    I am in favour of health care, Education, Water and sanitation remaining in public hands, but I am not so sure that the Statutory Corporation model works. You seem to lose the controls of the public service but not gain the efficiencies of a competitive private sector. There has to be a way to exercise greater control over the expenditures of these entities and means testing certain services so the better off can contribute.

    Like

  37. millertheanunnaki May 1, 2013 at 3:01 PM #

    @ Well Well | May 1, 2013 at 12:53 PM |

    Very informative video into the thinking of our young people. The miller is not surprised at the views expressed. The current generation making up the social and moral rules is just saddled with hypocritical materialistic values.
    How can we condemn, penalise and treat as a criminal a young man for smoking a plant that Mother Nature allows to grow freely while enjoying the tax benefits ensuing from the smoking or drinking of the ‘by-products’ of similar plants Nature has allowed to flourish? Isn’t that the “heights” of hypocrisy and “lows” of double standards?
    Smoking tobacco and drinking alcohol is morally and legally OK and fiscally most attractive but using marijuana grown locally or imported is a cardinal fiscal sin, morally corrupting and deserving of a criminal record that would be like a millstone around your neck to earn a living in this social cesspool of profound ignorance and bigotry. No wonder the young are laughing at us and preparing for another 1937. This time it would not be the whites instructing the blacks to ‘control by any means’ the black masses but the black elite giving orders O tempora! O mores! à la société Barbadienne plus faux.

    Like

  38. Observer May 1, 2013 at 3:06 PM #

    David and Miller we get so many Red Herrings from our interest groups including the private sector. For example, we hear the criticism about the Alternative Energy legislation.

    My sources tell me that the legislation being spoken of is really important for those players who want to be Independent Power providers. BL&P cannot be happy about this and must be lobbying hard. I wonder if the government (by this I mean the technocrats as well as the Ministers) is strong enough and informed enough to stand up to the lobbying. As a concerned public we should be putting pressure on our government to defend our interests. At least BREA is trying a thing.

    However, my sources also tell me that for those households, businesses and organizations that simply want to cut their energy costs by say installing windmills and/or solar panels, the incentives in BIM are among the best in the world, the legislation is not really an issue and there are some attractive financing packages out there. But its easier to line up behind a political party that promises to return to the good old days of energy subsidies, and some largesse from privatizations than adapt and take advantage of what is on offer.

    The paralysis in the face of this great economic challenge comes from many areas of our society.

    Like

  39. Enuff May 1, 2013 at 3:29 PM #

    “well Miller my observation of the $600ml is that the projects are all foreign financed on the one hand and secondly add to foreign exchange earning capacity.”

    Ohhhh? Do you repay loans with Barbados dollars or generate FOREX from roads?

    Like

  40. Well Well May 1, 2013 at 3:32 PM #

    Unfortunately for these administrations, the young people already know what is best for them and they are fully aware that they will shortly be the ones in control of this earth, unlike our ancestors and some of us who are still alive today, the young generation has recognized this current system for what it really is, and realize that unless they do something change it for their benefit and the benefit of the rest of the world, our future is doomed.

    Like

  41. David May 1, 2013 at 3:57 PM #

    @Observer

    BU is not aware that our system of governance (regulators) accommodates ‘lobbyists’? Please expand.

    This government has been put back in office and they need to get the job done.

    Like

  42. millertheanunnaki May 1, 2013 at 4:12 PM #

    @ Observer | May 1, 2013 at 2:28 PM |
    “well Miller my observation of the $600ml is that the projects are all foreign financed on the one hand and secondly add to foreign exchange earning capacity.”

    Come on Observer, not even ac is swallowing that baloney of a fudge to impress the impressionable. And we know you don’t fall into that category. How can a country with junk bond status attract commercially viable financing for locally engineered and ‘back-hand-a-d kickbacks awarded capital works?

    Not even your man in charge of the whole Estimates pappy show can come up with ( sorry, adumbrate) with a list of potentially implementable and viable projects to attract Private Partnership interests without obtaining the approval of the credit rating agencies, IDB and IMF prior to issuing letters of comfort and guarantee. As you know these longer-term financial commitments are indeed more than just contingent liabilities but are real debts taken on the balance sheet. Pop goes the weasel as far as the fiscal heart monitor is concerned.
    We need to first deal with the Four Seasons fiasco and the Almond Beach confusion before we can even examine any future FDI dreams. You know very well that foreign investors would not be coming up with any forex unless the government cleans up its fiscal act and sheds the excess baggage. Investors are not out there queuing up to invest in Barbados’s greatest attraction i.e. tourism. The Sam Lord’s Castle refurbishment was a project deemed attractive to foreign investors (and this is an informed observation) but which sadly has gone off the radar because of stupid partisan politics being played out by an myopic administration and less than energetic Opposition.
    The only source of funding that Bim can explore with any chance of immediate success is in the area of alternative energy and the green economy where “philanthropic” investors might be prepared to take a risk on a brighter and greener future for this little fallen paradise.
    The question is: Does this administration have the political intestinal fortitude the size of the “ Piece of the Rock” ‘goadies’ to ‘facilitate’ the process is a timely fashion by bringing in the necessary legislation and telling the local vested groups interested in maintaining the fossil-based status quo to go piss in their own fuel oil tanks?

    Like

  43. Observer May 1, 2013 at 4:19 PM #

    David I never saw yu as naive. Surely BL&P are going to seem to defend their interests in the energy sector. In these areas where major changes are required pressure from the public is a necessary component the world

    I thought the pier head, cruise terminal and the lab were the major projects that make up the 600ml in capital projects, and as far as I am aware these are expected to be funded with foreign funds. I was always led to believe that the lab was crucial to any exports of meat products from bim. Roads are shovel ready and do not use much forex (or so I am told)

    Like

  44. Observer May 1, 2013 at 4:23 PM #

    Miller come on you know that there is very little linkage between The government bond rating and Foreign Direct Investment.

    Like

  45. Observer May 1, 2013 at 4:27 PM #

    FDI is pouring into Guyana and Suriname with much lower credit ratings than Bim.

    Like

  46. David May 1, 2013 at 4:29 PM #

    @Observer

    How can the public join the cry when a communications policy has not been crafted by the government to resonate in a way to make people make the connection? i.e.a shared position. The government needs to disrupt the minds of ordinary citizens from their comfort patterns. So far it has failed.

    Like

  47. Well Well May 1, 2013 at 4:44 PM #

    David…………..the government’s mind is also stuck in a comfort pattern or else they would be preparing the masses for the truth instead of adumbrating nonsense……………lobbyist groups of concerned citizens should now organize to disrupt the delusion that is festering the administration and which the opposition is impotent to acknowledge and voice.

    Like

  48. Observer May 1, 2013 at 4:47 PM #

    There are currently 59 countries with junk bond status.

    http://nationalforex.com/2013/04/21/countries-junk-bond-ratings-standard-poors-fitch-moodys/

    I think many of them attract fdi

    Like

  49. Enuff May 1, 2013 at 5:16 PM #

    The guvment is incompetent. We like too much icing and dressing!!

    Like

  50. David May 1, 2013 at 6:49 PM #

    Thanks for this article form Not Taken out of Canada.

    Banks should determine who is sending money abroad: tax report

    Canadian banks and other financial institutions should be required to find out the beneficial owners of corporations or trusts that are transferring money overseas, according to recommendations in a new report on tax evasion by Parliament’s finance committee.

    The all-party finance committee reported Wednesday on the results of a lengthy review of tax havens, but the study immediately drew criticism from NDP and Liberal members who said its 11 recommendations are too vague and will do little to halt the tide of money flowing into offshore tax havens.

    http://www.theglobeandmail.com/report-on-business/economy/banks-should-determine-who-is-sending-money-abroad-tax-report/article11664697/#dashboard/follows/

    Like

  51. Well Well May 1, 2013 at 7:08 PM #

    They have no choice…………the government needs money for programs that will benefit the country, they have big plans and not enough money to get it done, if people are tax dodging, then you get scenarios like Barbados, out 1/4 billion dollars due to delinquency and cannot access the money for social programs.

    Like

  52. JUST ASKING May 1, 2013 at 10:11 PM #

    Somebody on this Blog said that the central Bank Governor should not be walking amongst the Living and something about Astral Projection—LOL LOL LOL–you all people can be cruel !

    Like

  53. BAFBFP May 1, 2013 at 11:00 PM #

    Obs

    I wish I knew you personally … we would get on just fine …

    Like

  54. millertheanunnaki May 2, 2013 at 7:01 AM #

    @ Observer | May 1, 2013 at 4:27 PM |
    “FDI is pouring into Guyana and Suriname with much lower credit ratings than Bim.”
    That might be so but with the investment money (mainly from China) chasing after commodities and resources to ‘fuel’ the massive manufacturing plants in the Far and SE Asia.
    What does Bim have to attract any FDI floating around and looking for a profitable home? A dying sugarcane industry that the Doctor posing as the MoA is fooling Bajans he is seeking to resuscitate by appealing to the capitalist conscience of the Japanese after making hundreds of millions from selling vehicles and parts to the local market? Where in the current year’s Estimates can we find any provision for capital investment in the ICU project to revive agriculture? Is any of the $600 million so earmarked?
    BTW, what is the actual production output for the year for the industry on its last legs?

    Look, Observer, let us get real and face up to the challenges we are up against instead of all the spin you are trying to pull here. What kind of FDI can Barbados “pull” at this stage? We can’t get foreign investors to take on the Four Seasons despite paying millions in finder’s fees to a charlatan.

    The list of thee 59 countries with junk bond investment labels are either large investment attractive domiciles with great commodities producing potential or with pools of very cheap labour like Bangladesh. Does Barbados have a similar investment profile?
    Do we hear you say: “Oh yes, we have a highly educated workforce!”? But educated in what? Skills that are in demand in today’s technologically focused world and not mass produced academic certification from the UWI paper qualification mill?
    Sorry to ask, Observer, but are you not selling Bim short when you seek to make mediocrity the standard of attainment this country has found itself aiming for despite having some of the most academically qualified and professionally trained persons per square kilometre when compared to those countries with similar junk bond status?
    It is rather doubtful if any of those countries on the junk bond list are in the same range as Bim on the UN HDI rating scale. What have we done with our massive investment in our educational and social capital? Where is the ROI to show?
    Given what this country has expended in education and in social capital to-date, don’t you think we should be ‘punching more above our weight’ in terms of economic performance and development? Where is our pride and industry? Instead of feeling proud of the junk bond label around our neck and feeling mediocrely at ease with countries we stupidly and arrogantly used to make fun of and laugh at their ‘valueless’ devalued paper money, shouldn’t we be fighting in the same economic weight division as Singapore, Malta and others with social and geophysical profiles fashioned in a crucible of similar modern developmental and political challenges going back to the 60’s?

    Sorry for the diatribe but you of all people must know that forex in the form of FDI is the economic lifeblood of this nation if the people are to maintain their materialistic opulent lifestyle.
    Our commodities exports are gone; tourism is contracting and new investment in this industry is ceding to places in the region like Cuba and even JCA; remittances from returning nationals are drying up as the passing parade led by Father Time takes its toll (God bless “piece of the rock” for a few more solar revolutions); international business in the financial services sector is under tremendous pressures and threats of closure machinated by the OECD vested interest and lobby groups.
    The ship called SS Barbados is leaking forex fast and heading for the impecunious shoals of Bimini, what do we do Captain Observer?
    What do you see through your telescope as you survey from the masthead the oncoming storm of gloom and doom reported by the messenger many moons ago? And as fate would have it the Emperor and his courtiers conveniently ignored the message and sought to verbally shoot the messenger. Only a child would have the balls to tell the Emperor and his ac-type sycophants the bare truth not to throw the miller overboard but take his grain of truth to heart.

    Like

  55. BAFBFP May 2, 2013 at 8:55 AM #

    Miller

    To my mind Oby successfully (for me anyway) threw a good dose of optimism into the pot, and you want to douse every shit out …. wah you doing man … Stupse. Optimism is a major ingredient in problem solving. This whole discussion started at the micro level, problems and alternatives and closed out with Macro considerations that hold promise (for me a member of the uninitiated). Wah you trying to be a wet blankety fah nah? Gi’ mah somet’ing to hold on to or stay thy tongue good friend ..

    Like

  56. David May 2, 2013 at 9:25 AM #

    A key take away from this discussion so far (at the micro :-) ) is that we have to change the way we deliver finance options to the entrepreneur/SME business class.

    Like

  57. Well Well May 2, 2013 at 10:15 AM #

    Unbiased delivery of financing to small businesses will be the trick in such a small knit incestuous society…………..obviously, there will have to be interactions not unlike Carib Export (just an example) of people from other jurisdictions who do are not political yardfowls, hacks or pimps for any one or the other political party and who do not themselves display political ambitions that always somehow finds itself being used where lots of money is concerned to funnel the money in a direction for which it was not intended………..installing people from other jurisdictions other than Barbados, who have no connection to the local political environment, to distribute funds for businesses might be the better idea.

    Like

  58. millertheanunnaki May 2, 2013 at 11:56 AM #

    @ BAFBFP | May 2, 2013 at 8:55 AM

    Agree that OPTIMISM is the way forward.
    But before we can go there we must ALL admit we have a very serious problem on our hands.
    Like the alcoholic person in need of help and recovery we (including ac, CCC and this DLP administration) must first admit we have a problem and a major one at that. We need to stop burying our heads in the sand and living way above our means while our local version of the Titanic sails headlong towards the approaching economic iceberg. There is still time to avoid this pending economic meltdown, you agree BAF?

    A serious dose of reality check and frank communication with the people must be immediately forthcoming from our political leaders instead of hiding behind Chinese walls in the ivory pagodas. In short it’s time we stop with the lies and cover up and come clean before progress and confidence in the future can be undertaken.

    If so then jump on board the flagship SS Enterprise Barbados and stop with the State controlled model. Entrepreneurship and State control of economic activities are anathema to each other.

    The longest journey begins with the first or one step .

    Like

  59. ac May 2, 2013 at 1:00 PM #

    One of key factors that influence an econimc is cionfidence a message that when delivers wether by leadership or market indicators is a necessay ingredient in helping the economy move foward . ….All the doom and gloom rhetoric has nothing to offer expect to stiffles and paralyse an already bad situation and stop the foward movement of progress by instilling fear and pessimisim in the minds of many..The govt has already put an 11million stimulus package in the economy which will bring growth and jobs

    Like

  60. millertheanunnaki May 2, 2013 at 1:24 PM #

    @ ac | May 2, 2013 at 1:00 PM
    “The govt has already put an 11million stimulus package in the economy which will bring growth and jobs”

    The more the mother monkey climbs the more she shows her true lying colours. If a $11 million package can do such wonders just imagine what a stimulus package of $90 million could do?
    Is this the same ac that only 3 months ago was diametrically opposed to any stimulus package?
    But, ac, when are you going to have your cathartic moment and admit that we are facing a very serious economic situation that cannot be blamed on the BLP this time around?
    Admit you have been wrong and we can move forward in throwing ideas in the problem-solving mixing bowl to arrive at workable solutions.
    Or are you too big-(headed) for such political soul-searching concessions?

    Like

  61. Artaxerxes May 2, 2013 at 4:21 PM #

    These DLP supporters are not willing to admit that the Barbados economy is in trouble, despite the “feel good” agenda they continue to push. This administration has not fully articulated any policies that would restore confidence in those of us who are thinking rationally. Those of us who prefer not to buy into DLP propaganda, but rather critically analyse the situation and call it as it is, are labelled as singers of “doom and gloom”. Yet, in no uncertain terms, the Governor of the Central Bank expressed similar views as was being expoused by the Economic Society, ICAB, the private sector, UWI professors, journalist, and many individuals on this blog.

    Ironically, during the first four years of their first term in office, this DLP adminiatration masked their constant failures and inability to govern, by blaming the BLP and the prevailing economic crisis, while constantly referring to countries like Greece. If one fully analyses Greece’s situation, for years that country was manipulating their national accounting figures, in gain access loans from the international lending agencies. So Greece’s situation is somewhat unique.
    Imagine, Stephen Lashley defence for his ministries inability to hold secondary school sports, was to blame the BLP for not fixing the stadium, when they had five years to do so.

    Coming to the end of the their first term in office, members of this administration became evidently very silent, only to resurface with much vocal vigour during the election campaign. Their silence must be attributed to the fact that Barbadians became tired of the blame the BLP retort, so they had to put up and shut up. Knowing that, now in their second term, they can no more blame the BLP or the recession, they have now gone back to sleep, and their silence has become extremely deafening. The sleeping giant has climbed the bean stalk, to return to his castle in the sky, so he could resume sleeping.

    Like

  62. ac May 2, 2013 at 5:00 PM #

    miller are you so daft not to realise that the 11million stimulus is to generate forex for a longer period of time and the b the stimulants are far more reaching than the 90million which would have put hands into barbadians only to generate finance for a shorter period .without little or no long term’ or continuous benefits. the consumer shops pays bill’ saves’ or whatever and that would be the only stimulant derived, Then what ! . The economy needs to move forward towards recovery . The last thing it needs now are band aids and the 90million stimulus is just another gimmick with no realistic goals towards a recovery..

    Like

  63. Dr Love May 2, 2013 at 6:21 PM #

    @AC
    Are you Frakenstein.?
    Stimulus.
    Like you can “high Voltage a corpse”
    Now I know we are on an island but let at least our thinking and understanding be Universal.
    The whole World is on the verge of collapse and Barbados is like the size of one flake of Dandruff on the Worlds skull and of about as much consequence.
    We are of NO consequence.
    Only to our selves,and we should get to understand that
    .As much as our ego may hurt.
    WE had a paradise which the greed and corruption of the Governing bodies have dragged into the Mire.
    We are UNCLEAN in the eyes of the rest of the World,we are (until we wake up and get real and do some real housecleaning) a HASBEEN, we are now a NON destination.
    We have lost our VIRGINAL AURA,and now are touristically veiwed like some old “Mary” once the pride of Nelson street now a little slack and scruffy and DEFINATELY not something to be BOASTED about.
    Not exactly an item off the Top Shelf.
    How does one stimulate and old slag, a worn out and corrupt creation,when all around is Chaos and a World Economy in tatters,what make up and lipstick and (pussy hair) wigs may we apply to this corpse to “Stimulate “it to make it appear desireable to a Tourist market which has shrunk to a corpse itself..
    We seem to take some perverse satisfaction in the fact that Tourists that get shot while shopping in our main city streets in Broad daylight, advertise for the sake of 5 minutes fame.
    “That they will come back” and that “they do not hold a grudge”
    I read that rubbish and I think “these peope are insane”
    so does everybody else I have asked the opinion of.
    Barbados is now , a side channel in the ,voyages of the tourist.
    Our World image is Shot,
    We have no law , we have judges that do as they wish, a DPP that changes the Law as tho he were a Dictator,I do beleive we have a Prime Minister, a SHY individual so I hear, altho this is non verifiable,as there are so few sightings,as to render a true opinion as doubtful.
    WE have Murders that are NOT murders, and very GRATEFULL shot visitors.
    Raped women,who are so befuddled (in the opinion of the Chief of police) that they do not know one of us from the next.
    To put it bluntly
    “Barbados is one very Screwed up destination” if it were a person by now it would have been “Committed” toBlackrock Mental.
    But to get back to reality, firstly ac, you must FIX the WORLD.before you can fix Barbados.
    In Barbados before this is all over ,I beleive the police and others will be shooting rioters in the street and disposing of recalcitrant individuals without as much as a blink..
    When this cancer of corruption finally bursts it is going to take us all down with it.
    Seethroo Mugabe, at the helm.
    Someone who beleives he can just ignore and cover up a stinking dead corrupt corpse and the smell will just go away ,is just the person we need at a time like this.
    ac as much as you will refuse to admit it ,there is NOTHING we can do, we are SUBJECT to the ways of the Hurricane,what you are doing it “pissing into the wind” and thats all you will get back.
    There is no quick fix or stimulus,.
    Yes Lemeual will talk about ILKS and people of.
    Alvin will run in with his magic wand and pretty ribbon to put on a jar a magic Bajun 1,000,000,000$ Jam of which we MAYBE can sell millions.
    ac as much as it may make you kak your Knickers, we are in real trouble that all the rhetoric, sweet talk and balony in the World will not fix.
    About the best we can do to surrvive, is shrink.
    Go back to basics. We got all we need to do it,coconuts, green banana, kitchen gardens and Camaraderie.
    But will we??
    Not a chance in Hell
    Barbados now is Corrupt to its very core.
    Remember this whole thing got to collapse and disintigrate before it can resurrect.
    They talk about man destoying the world, Balony !!
    He will only destroy the part that supports him and the World will rollon happily without him.
    The happenings in Barbados are only the Micro of the same Makro happenings in the whole World.
    Dont look for help, the rest out there do not care about Barbados ,they are still too busy grabbing a bigger share of whats left..

    Like

  64. Well Well May 2, 2013 at 6:44 PM #

    Dr. Love…………….don’t hold back, tell me how you really feel………..if what you just said did not wake the readers up, i gotta tell ya, nothing will………..i am sitting in North America watching events unfold, i don’t believe people are still pretending to be deaf, dumb, blind and oblivious.

    Like

  65. BAFBFP May 2, 2013 at 8:18 PM #

    With all this mess, why did the two political parties swipe tooth and nail to win the last election …? What is in it for either of them? Surely the problems are insurmountable with the type and level of talent that they have placed before the public … what is in it for either of them? (I foolish fah truf ..)

    Like

  66. Well Well May 2, 2013 at 8:24 PM #

    Baf………..you forgot, the cookie jar…………the piggy bank……………the treasury, i a sure there is still some money lurking somewhere.

    Like

  67. Well Well May 2, 2013 at 8:28 PM #

    That is why pressure must constantly be applied to them cause they wanted the power so badly, they did whatever it took to get there hoping things would get better, let them keep it, but from where I am sitting, it is plain to see that things are getting worse and will continue to worsen over time……………..that is the nature of things right now. Be careful what you ask for cause there is always a chance that you will get it and then don’t want it anymore. Ha!

    Like

  68. Bush Tea May 2, 2013 at 8:54 PM #

    Excellent analysis Dr Love.
    Yuh got ac speechless….
    ..now can you see what yuh can do with Well Well fuh we…

    Like

  69. Well Well May 2, 2013 at 8:58 PM #

    Bushy…………you still have not explained the ILO fiasco………..

    Like

  70. islandgal246 May 2, 2013 at 10:23 PM #

    Well Well Bushie is asking you to close yuh mout for a change. Waaait do you talk in your sleep??

    Like

  71. ac May 3, 2013 at 5:06 AM #

    Dr Love and others wunna could keep burning the candle of FEAR. However there are others including ac who keeps burning the candle of HOPE for a better tommorow!
    Some people see things and say WHY? While others say WHY NOT.?

    Like

  72. Well Well May 3, 2013 at 9:13 AM #

    AC……………explain this…

    http://www.barbadostoday.bb/2013/05/02/cow-down-but-not-out/

    Islandgal………………Bushie is just trying to get away from explaining why he misled me about the ILO and shenanigans the little play boys get up to at the ILO conferences they attend overseas at taxpayers expense………..Bushie did not expect the ILO to start exposing everything………..Bushie, i will not go away.

    Like

  73. Well Well May 3, 2013 at 9:15 AM #

    Bushie and Island………..you can’t expose some things and keep others hidden……….that is when international agencies come in and expose the rest for you……….are yall not learning anything??

    Like

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