private1

The P Word Resurfaces

privatizationIn his weekly column of last week Jeff Cumberbatch gave an insight into his reading habits and as to be expected it is varied.  Those who should know suggests reading is very important because it develops the mind first and foremost.  The BU household reading habits are not as varied as Jeff’s but read we must to satisfactorily contribute to the management of Barbados Underground.  One Online subscription with a dog-eared bookmark to be found on BU’s bedside table is the Institute for Democracy and Electoral Assistance (IDEA).   Here is the link to the FAQ page for those who want to delve into the whys and wherefores of the entity.

BUers (credit: PUDRYR) who are motivated to read a few of the postings on the IDEA website the quick conclusion one can make is that democracies across the globe  -including Barbados- suffer from similar challenges. Whether it is the quality of representation, exacting accountability from public officials or a system continuing to fail to address the large block of the population who have become disengaged.

It is no secret that voters around the world feel increasingly disconnected from their elected representatives – Rethinking the Crisis of Representation

There is widespread recognition that improving public services is a critical component of poverty reduction – How does accountability affect representation?

The low level of youth participation in political life is one of the biggest challenges facing representational democracy across the globe – Lowering the age limit to increase youth participation in politics

In Barbados we have successive governments who foist manifesto documents on the citizens and because they are no more than a promise; a comfort for a fool, the public continues to be challenged how to hold the political parties (class) accountable. And changing the name from manifesto to covenant of hope will not address the central issue.

One issue to illustrate the lack of accountability in the Barbados system of government is the flip flop by the incumbent government on the issue of privatization.  The last general election was won (or partly) on the platform theme this government intended to spurn the suggestion that privatization must be an integral part of an economic strategy to lead the economic recovery. There has been a visible reversal by the government, no examples necessary, no need to be prolix.

The issue being prosecuted by BU is not that privatization tactics are not warranted, afterall, all else has failed. It is a matter of principle. Honourable people operate based on principled behaviour. If the government intends to co-opt a policy of privatization the honourable thing to do is to seek a mandate to avoid the accusation it duped Barbadians.

The pros and cons of privatization is a contentious one, it is not a black or white issue.

A Harvard Review Paper of 1991 defines the challenge for governments like Barbados as follows:

Overriding the privatization debate has been a disagreement over the proper role of government in a capitalist economy. Proponents view government as an unnecessary and costly drag on an otherwise efficient system; critics view government as a crucial player in a system in which efficiency can be only one of many goals.

In the case of Barbados we are being forced to adopt privatization tactics because traditional economic prescriptions continue to fail. For those who say no we point them to the reports of the global rating agencies and our own Caribbean Development Bank.

BU’s view is that in our mixed economy an integrated private and public economic policy approach must be adopted to maximize national productivity in order to sustain optimal development. To resort to a familiar adage – too far east is west. The authors of the Harvard Review Paper conclude that whether public or private ownership it is about efficiently managing resources. BU differs with the learned authors that ownership of strategic assets by a people is critical to defining their identity and ability(the subject of another blog).

The concern the BU household has is that the privatization tactic by the Barbados government – one of many economic solutions available – is compromised because of the perpetual bad state of the economy. The problem is exacerbated because a poor economy translates to rising social ills.

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44 Comments on “The P Word Resurfaces”

  1. Dompey October 14, 2016 at 5:50 AM #

    Small business engine the American economy and heavy reliance on the governmental sector burden the taxpayer.

    Like

  2. chad99999 October 14, 2016 at 6:31 AM #

    Dompey is dopey.

    American economic leadership depends on large firms — Apple, Google, Boeing, Exxon, JP Morgan– that sustain the country’s technological, military dominance and global reach.

    Small businesses are.only good for providing employment to ordinary people who are unsuited to the fast lanes of global firms, which are adapted to the fierce competition of international business.

    Regarding the larger question of privatization in Barbados, it is clear the government needs to sell some of its assets to reduce its debt. But that should not mean signing sweetheart deals with private firms for the delivery of essential public services at inflated prices.

    Like

  3. David October 14, 2016 at 6:36 AM #

    Chad999999

    Excellent comment, privatization may facilitate greater innovation as well.

    Your point about sweetheart deals is well documented, would a contractor general help?

    >

    Like

  4. de pedantic Dribbler October 14, 2016 at 6:37 AM #

    Mr Blogmaster you have distilled the argument rather well to the fundamental : “…whether public or private ownership it is about efficiently managing resources”

    In small, asset poor economies such as Bdos the correlated point that “… ownership of strategic assets by a people is critical to defining their identity and ability” does resonate strongly but can be managed well within a progressive business model to the advantage of the populus.

    You used a lot of scholarly references which is a good thing but nothing can sanitize blatant corruption.

    The issues surrounding the private arrangements for the water or waste management in Bdos do not test or identity or ability to own our crucial assets rather they affirm the inefficient management of our resources in an orgy of personal self enrichment by local politicians.

    Incidentally, the nexus between the sale of crucial assets and bad management are inseparable for a small economy like ours and started eons ago when lawyer politicians agreed that the sale of prime beach front land for $$millions of forex was more important to the island’s development that a land use policy which forbid the outright sale of such real estate to foreigners.

    Like

  5. Piece Uh De Rock Yeah Right - INRI October 14, 2016 at 8:47 AM #

    The article is well crafted and provides much food for thought and the segue regarding the electorate, their inclusion in the process, the endemic apathy, their choices, the elected, their mandate, the role of government(s) all gel.

    While it is expected that no commentary cannot provide a blueprint on creating competencies there is a plethora of literature which documents the absence thereof.

    And certainly our experiences these last 8 years adds tomes to such literature.

    Structured Privatization vis a vis Enforced Privatization will breed different outcomes.

    @ the Honourable Blogmaster it is a hopeful, some would even say Quixotic wish that “privatization may facilitate greater innovation as well” particularly when the enforcement is purely to generate revenues to meet the daily running of government i.e. government salaries.

    The Government of Barbados is broke AND what should have been a carefully plotted exodus from activities that government had no business of ever being in, is now being undertaken under duress.

    That is a recipe for failure since the resource has bottomed out and it would have to be a really desperate buyer to (a) want the bottom feeders (b) consider them viable in a reasonable time for any ROI and (c) mindful of the fact that irrespective or is that irregardless?? (credit Jeff Cumberbatch) irrespective of the projections of the undertaking, buying a potential oasis where the population of clients is absolutely disastrous is akin to that sterling comment that i repeat daily “should a tree fall in the woods and there is noyone there to hear it, does it make a noise?”

    This repositioning is like all the hairbrained strategies of this government – poorly thought out, poorly executed AND DOOMED TO FAIL.

    “There Can Be No Economic recovery Under Fumbles Fools” (credit Frustrated Business Man)

    Like

  6. Well Well & Consequences October 14, 2016 at 8:57 AM #

    “You used a lot of scholarly references which is a good thing but nothing can sanitize blatant corruption.

    The issues surrounding the private arrangements for the water or waste management in Bdos do not test or identity or ability to own our crucial assets rather they affirm the inefficient management of our resources in an orgy of personal self enrichment by local politicians.”

    That is the bottomline. ..the know it alls are still to tell us who should be contracted to pick up the garbage on tiny Barbados. …they are not telling you that private firms are also contracted by the cities because of population size, demographics in trucking garbage to landfills and a myriad other reasons to keep an efficiently running sanitation service….to stave off garbage pileup and disease. .

    Like

  7. Bernard Codrington. October 14, 2016 at 9:20 AM #

    @ David @6;36 AM

    The free market system cannot exist without the state. The state creates and enforces the legislation which set the contractual framework within which free enterprise operates and flourishes.
    The danger arises where the capitalists seize by leger de main or force of arms or bribes the power of the state and operates it to their selfish benefit and advantage. The management of solid waste is a more recent example. Do you recall who influenced the state to pass the law and having had the law changed in his favour called on the competition to obey the law?
    Should a strategic resource such as water be in the hands of a private corporation? We tend to reduce these issues to one of racism but as Bush Tea often points out it is at base the cardinal sin of greed. The state is large because it does all the entrepreneurship and when the businesses become profitable, certain greedy persons want to privatize them.
    So if the government activities are efficient and effective let them be. Anyone who is not asleep will have noticed how the local private sector has continued to lose ground from to the T&T and Jamaican private sectors.

    Like

  8. Vincent Haynes October 14, 2016 at 9:24 AM #

    Debt – a global scam — New Internationalist
    https://newint.org/features/2013/07/01/debt-keynote/
    New Internationalist
    Jul 1, 2013 – The actions of creditors are key to debt crises, argues Dinyar Godrej. … The poor man does everything to try to repay the loan while his family … in a recent BBC documentary, seasoned financial journalists and former bankers ….. Strauss Kahn has opened up debates about predatory males the world over,

    Links 10/13/16 | naked capitalism
    https://www.nakedcapitalism.com/2016/10/links-101316.html
    Naked Capitalism
    1 day ago – Chuck L: “Global war has just moved a step closer. … US Election 2016: Catholic outcry at Clinton aide’s email BBC … the broken healthcare system, the national debts, their high student loan interest… all of these things are … Expanding the Debate: Jill Stein Spars with Clinton & Trump in Democracy Now!

    Like

  9. David October 14, 2016 at 9:26 AM #

    @PUDRYR

    It seems pointless but some us try to point to the systematic issues which require thought/intelligence to fashion solutions. Let us continue to try.

    Like

  10. Vincent Haynes October 14, 2016 at 9:28 AM #

    Debt: Borrowers Beware?
    Newshour Extra
    Listen in pop-out player

    Is debt essential for economic growth? We look at the economics and morality of debt. Should countries burdened with huge debts be forced to repay them in full? And, if it is fine for an individual to borrow large sums to buy a house, why shouldn’t governments do the same to finance employment schemes or large infrastructure projects? Owen Bennett Jones and his expert panel are in front of a live audience at the How the Light Gets in Festival in Hay-on-Wye to discuss the problems of debt.

    http://www.bbc.co.uk/programmes/p04b6yj8

    Like

  11. Well Well & Consequences October 14, 2016 at 9:45 AM #

    And it would be better if Jamaica and Trinidad wipes out the local private sector in Barbados…let it go regional, as it stands, the local homegrown private business people are not flowing money back into the treasury sufficiently to benefit the country and people, they are too greedy, too selfserving and want to control too much of the direction the island should take, the people, their behaviors and future……….it will eventually topple the 2 governments.

    Like

  12. Frustrated Businessman aka 'Nation of Laws' my ass. October 14, 2016 at 9:47 AM #

    It is obvious to everyone that gov’t ministers are corrupt. That is not a new fact but the current gov’t has taken it to a new scale and level, to the point where it is openly discussed in business circles and honest business people have been chased away from our shores.

    It is obvious to everyone that the gov’t of BDS is the employer of last resort. The civil services and statutory corporations are full of lackies, whores and pimps who not only cost us too much but also prevent us from accomplishing our commercial and personal goals. They are not just individually and collectively useless, they are a huge impediment to progress by standing in our way.

    It is obvious to everyone that the first fact, facilitated by the second, perpetuates ‘sweetheart deals’ that cannot bear scrutiny of the informed. Only the bribe-payers and bribe-takers are making progress at the expense of the rest of us.

    The answer though is quite simple: the creation of a ‘Tenders Board’ under the senate which would open, debate and decide public tenders on Parliament TV. Not only would the public be comfortable with the outcome but the tenderers would have an opportunity to represent and appeal.

    Folks, it really is that simple.

    There will be no economic recovery under Fumble’s Fools.

    Like

  13. chad99999 October 14, 2016 at 10:02 AM #

    Bernard

    The state can never be an impartial referee among competing interests.

    It will either be dominated by big business, small business, labour unions, the intelligentsia or other social forces. Sometimes these different power centres take turns.

    It is foolhardy to say things like, Water is a strategic resource that should never be in private hands. You will discover there are so many “strategic resources” the state would exhaust itself trying to manage them all. And if the state itself is not in safe hands…

    Like

  14. millertheanunnaki October 14, 2016 at 10:07 AM #

    @ chad99999 October 14, 2016 at 6:31 AM #
    “Regarding the larger question of privatization in Barbados, it is clear the government needs to sell some of its assets to reduce its debt. But that should not mean signing sweetheart deals with private firms for the delivery of essential public services at inflated prices.”

    What you are ‘regurgitating’ has been recommended (ad nauseam in response to the constant chorus of ‘bring solutions to the table’) to the current administration since early 2012 when the only obvious outcome of a fiscal meltdown was seen as big as a breadfruit in a banana republic tree. Barbados is broke and teetering on the verge of bankruptcy just like any poorly managed business.

    Barbados is in no position at this end stage of fiscal implosion to ‘dictate’ the price and terms and conditions of any forced privatization programme. The fast disappearing foreign reserves position will ensure any fire sale of commercial assets (BWA, GAIA) will be sold to anyone with foreign money.

    No devalued Bajan dollars will be considered.
    Let the foreign reserves drop below that magical $300 million which ‘mysteriously’ disappeared just after the last elections and you will soon see how many conspicuous consumption ‘imported’ pigeons will be slaughtered by the IMF-trained cat.

    The question to you Chad is whether the current administration has the moral authority (integrity) and intellectual competence to undertake such a vital privatization programme of fiscal survival.

    These fools cannot even complete the much talked about sale of the BNTCL although the cheque has been in the mail since August.

    When this administration is capable of removing the debris and detritus after weeding the gutters and road reserves within a week instead of months then and only then we should allow them to undertake any privatization programme to save the sorry fiscal ass of Bim.

    To use the refrain so ably composed by the prescient Frustrated Businessman: ‘There will be NO economic recovery under Fumble & his band of Fools’.

    If these imbecilic boys and girls are really true loyal sons and daughters of your once proud country, please have your last party for the clowns in November and call elections in January 2017.

    Liked by 1 person

  15. Bernard Codrington. October 14, 2016 at 10:13 AM #

    Contractor general will not help. Just as BRA has not increased the management of collecting taxes. Far from that it’s current collecting practice discourages/ frustrates tax payers from paying taxes.
    Several contractors general will do a better job. Each specializing in different faculties/ disciplines. It worked prior to 1970’s What is the problem now? You do not win a war with an army of generals. We need competent foot soldiers. They keep each other honest. What happens when you have one single corrupt Contractor General?

    Like

  16. David October 14, 2016 at 10:27 AM #

    @Bernard

    Nothing wrong with what you wrote in theory. The issue of privatization has become political like most issues in Barbados. Is the public service competent and configured to optimally manage key resoures?

    Like

  17. Gabriel October 14, 2016 at 10:36 AM #

    The Hebrews recorded over 6000 years ago that based on their experience no one should put trust in royalty nor in the common man.Bottom line:- don’t trust anybody at all,at all.
    Take a look at the list of those on this government side.Stuart,Brathwaite,Sinckler,Inniss
    Kellman,Jones,Blackett,the Lashleys,the Boyces,Lowe,Estwick,McClean,Byer,Todd,
    Garner,Husbands,Ince,Carrington,Paul,Thompson,Sealy.
    Investor confidence you say?Only at a price in all except 3 at most.

    Like

  18. Bernard Codrington. October 14, 2016 at 10:36 AM #

    I never said the state was a referee much less an impartial one. When conservative /big business parties are in power,the State favours the landowners, big businesses ,the wealthy. When the social democratic parties are in power the State favours the middle and working classes. And that is a generalisation and observation.

    Like

  19. Dompey October 14, 2016 at 10:44 AM #

    Bernard Corington
    You’re essentially saying that the democrats favour the middle- class and small-business, and the republicans favour large corporations and the wealthy?

    Like

  20. Colonel Buggy October 14, 2016 at 10:47 AM #

    Your point about sweetheart deals is well documented, would a contractor general help?
    ……………………………………………………………………………………………………………………………………
    Not if he is going to be treated with the same disrespect, now shown to the Auditor-General.

    Like

  21. Bernard Codrington. October 14, 2016 at 10:57 AM #

    @ David 10:27 AM.

    The same human resource pool from which the Private Sector draws its managers and labour are available to the Public Sector.
    In the past, most Public Sector Construction was effected by the ministry of Public Works to a standard higher than these projects subcontracted to the private sector. The engineers and other managerial workers graduated from the same institutions. The costs to the tax payer are higher when the private sector does the jobs. The salaries are higher, their labour cost is huger,their overall costs are higher because of the high rate of return they require on there investments. They like GOB have no funds so they have to borrow at higher rates of interests. . Do I need to say more ? Or have you got the drift of my thoughts?
    Public sector is at least cost. Private sector are at cost plus. That is the straight Economics. Not Politics .Not Ideology.

    Like

  22. Bernard Codrington. October 14, 2016 at 11:01 AM #

    Dompey

    Which Democrats are you talking about? Those in Barbados or those in the USA?

    Liked by 1 person

  23. David October 14, 2016 at 11:23 AM #

    @Bernard

    Is it not fair to say that there is a greater system of meritocracy than in the public sectorsector although imperfect?

    @Colonel

    As usual a sober intervention.

    Like

  24. Frustrated Businessman aka 'Nation of Laws' my ass. October 14, 2016 at 11:56 AM #

    Bernard Codrington. October 14, 2016 at 10:57 AM #
    @ David 10:27 AM.

    In the past, most Public Sector Construction was effected by the ministry of Public Works to a standard higher than these projects subcontracted to the private sector. The engineers and other managerial workers graduated from the same institutions. The costs to the tax payer are higher when the private sector does the jobs. The salaries are higher, their labour cost is huger,their overall costs are higher because of the high rate of return they require on there investments.

    Bullshit!

    You must really think you’re talking to the same idiots who run the snivel service.

    Like

  25. Bernard Codrington. October 14, 2016 at 12:08 PM #

    @ Gabriel,

    Whose angel are you? The Hebrews, collectively, said no such thing either 6000 years ago nor now.

    You would be reporting more accurately if you said the authors,translators and adjusters of that particular quotation said. The adjusters are the scribes, Pharisees, Priests, Rabbis.
    What a boorish and boring life it would be if we trusted no one. I know that you trusted some blogger to respond to your aphorism. Hence I responded.

    Please do not be so despairing and disrespectful of your fellow Barbadians that you, of sound mind ,selected last election.

    You live in a democracy do everything in your power to make it work. Everything else is an exercise in Futility. With a name like yours you should be bringing good news of a just and fair society.

    Like

  26. David October 14, 2016 at 12:20 PM #

    8 minutes ago Details Are we able to use the GROTTO project as a case study anyone?

    Also include the Housing Credit Fund in the discussion for 10 marks.

    >

    Like

  27. Bernard Codrington. October 14, 2016 at 12:34 PM #

    @ David @ 11:23 AM

    Meritocracy?
    I am talking about producing goods and services at the lowest costs to the taxpayers.;and producing goods and services that benefit the citizens of Barbados. In short I am referring to efficiency and effectiveness.

    Effectiveness is not necessary at lowest cost. And there are many public goods and services, if provided at lowest cost would be deleterious to the health and well being of Barbadians.

    If by meritocracy you mean entitlement, that is the major cause of most of our social and political ills in this world.

    Obviously you have not worked in the private sector . They too have their stories of meritocracy or the lack there of.

    Like

  28. David October 14, 2016 at 12:38 PM #

    @Bernard

    No!

    All you want to achieve must be done in a culture nurtured and supported by performance management.

    Like

  29. Vincent Haynes October 14, 2016 at 12:41 PM #

    David October 14, 2016 at 12:20 PM #

    This morning on the VOB news,we heard that tennants are moving into the Grotto shortly…….presume when one ties new roads,water availability shortly and now housing together it equal elections shortly.

    Like

  30. Bernard Codrington. October 14, 2016 at 12:47 PM #

    @Frustrated B @9:47

    No wonder your business is frustrated. If you approach the members of the Civil Service from a mindset that they are idiots you will project your profile of them into their psyche and they will respond accordingly. Try showing some respect next time.

    Like

  31. Bernard Codrington. October 14, 2016 at 1:05 PM #

    Who is to provide this culture of performance management? Do we not already have a culture that expect performance and acceptable outcomes with respect to inputs?

    The local and international reports are full of the consequences of performance based remuneration. They either lead to imprisonment, collapse of highly rated corporations and suicide by those who tried to falsify performance targets. It does not lead to teamwork and achieving corporate ,social and national objectives.
    Could that be the cause of the decline of West Indian Cricket hegemony ? Where the concentration is on the individual performance and not the team?

    Like

  32. Money Brain October 14, 2016 at 2:25 PM #

    Maybe we can learn from New Zealand and Singapore too.

    You want fixes for Bim lets adapt from this NZ experience Case History below

    New Zealand’s Remarkable Economic Transformation

    When writing a few days ago about the newly updated numbers from Economic Freedom of the World, I mentioned in passing that New Zealand deserves praise “for big reforms in the right direction.”
    And when I say big reforms, this isn’t exaggeration or puffery.

    New Zealand

    Back in 1975, New Zealand’s score from EFW was only 5.60. To put that in perspective,Greece’s score today is 6.93 and France is at 7.30. In other words, New Zealand was a statist basket cast 40 years ago, with a degree of economic liberty akin to where Ethiopia is today and below the scores we now see in economically unfree nations such as Ukraine and Pakistan.

    But then policy began to move in the right direction, especially between 1985 and 1995, the country became a Mecca for market-oriented reforms. The net result is that New Zealand’s score dramatically improved and it is now comfortably ensconced in the top-5 for economic freedom, usually trailing only Hong Kong and Singapore.
    To appreciate what’s happened in New Zealand, let’s look at excerpts from a 2004 speechby Maurice McTigue, who served in the New Zealand parliament and held several ministerial positions.

    He starts with a description of the dire situation that existed prior to the big wave of reform.
    New Zealand’s per capita income in the period prior to the late 1950s was right around number three in the world, behind the United States and Canada. But by 1984, its per capita income had sunk to 27th in the world, alongside Portugal and Turkey. Not only that, but our unemployment rate was 11.6 percent, we’d had 23 successive years of deficits (sometimes ranging as high as 40 percent of GDP), our debt had grown to 65 percent of GDP, and our credit ratings were continually being downgraded. Government spending was a full 44 percent of GDP, investment capital was exiting in huge quantities, and government controls and micromanagement were pervasive at every level of the economy. We had foreign exchange controls that meant I couldn’t buy a subscription to The Economist magazine without the permission of the Minister of Finance. I couldn’t buy shares in a foreign company without surrendering my citizenship. There were price controls on all goods and services, on all shops and on all service industries. There were wage controls and wage freezes. I couldn’t pay my employees more—or pay them bonuses—if I wanted to. There were import controls on the goods that I could bring into the country. There were massive levels of subsidies on industries in order to keep them viable. Young people were leaving in droves.

    Maurice then discusses the various market-oriented reforms that took place, including spending restraint.
    What’s especially impressive is that New Zealand dramatically shrank government bureaucracies.
    When we started this process with the Department of Transportation, it had 5,600 employees. When we finished, it had 53. When we started with the Forest Service, it had 17,000 employees. When we finished, it had 17. When we applied it to the Ministry of Works, it had 28,000 employees. I used to be Minister of Works, and ended up being the only employee. …if you say to me, “But you killed all those jobs!”—well, that’s just not true. The government stopped employing people in those jobs, but the need for the jobs didn’t disappear. I visited some of the forestry workers some months after they’d lost their government jobs, and they were quite happy. They told me that they were now earning about three times what they used to earn—on top of which, they were surprised to learn that they could do about 60 percent more than they used to!

    And there was lots of privatization.
    …we sold off telecommunications, airlines, irrigation schemes, computing services, government printing offices, insurance companies, banks, securities, mortgages, railways, bus services, hotels, shipping lines, agricultural advisory services, etc. In the main, when we sold those things off, their productivity went up and the cost of their services went down, translating into major gains for the economy. Furthermore, we decided that other agencies should be run as profit-making and tax-paying enterprises by government. For instance, the air traffic control system was made into a stand-alone company, given instructions that it had to make an acceptable rate of return and pay taxes, and told that it couldn’t get any investment capital from its owner (the government). We did that with about 35 agencies. Together, these used to cost us about one billion dollars per year; now they produced about one billion dollars per year in revenues and taxes.

    Equally impressive, New Zealand got rid of all farm subsidies…and got excellent results.
    …as we took government support away from industry, it was widely predicted that there would be a massive exodus of people. But that didn’t happen. To give you one example, we lost only about three-quarters of one percent of the farming enterprises—and these were people who shouldn’t have been farming in the first place. In addition, some predicted a major move towards corporate as opposed to family farming. But we’ve seen exactly the reverse. Corporate farming moved out and family farming expanded.

    Maurice also has a great segment on education reform, which included school choice.
    But since I’m a fiscal policy wonk, I want to highlight this excerpt on the tax reforms.

    We lowered the high income tax rate from 66 to 33 percent, and set that flat rate for high-income earners. In addition, we brought the low end down from 38 to 19 percent, which became the flat rate for low-income earners. We then set a consumption tax rate of 10 percent and eliminated all other taxes—capital gains taxes, property taxes, etc. We carefully designed this system to produce exactly the same revenue as we were getting before and presented it to the public as a zero sum game. But what actually happened was that we received 20 percent more revenue than before. Why? We hadn’t allowed for the increase in voluntary compliance.

    And I assume revenue also climbed because of Laffer Curve-type economic feedback. When more people hold jobs and earn higher incomes, the government gets a slice of that additional income.
    Let’s wrap this up with a look at what New Zealand has done to constrain the burden of government spending. If you review my table of Golden Rule success stories, you’ll see that the nation got great results with a five-year spending freeze in the early 1990s. Government shrank substantially as a share of GDP.
    Then, for many years, the spending burden was relatively stable as a share of economic output, before then climbing when the recession hit at the end of last decade.

    But look at what’s happened since then. The New Zealand government has imposed genuine spending restraint, with outlays climbing by an average of 1.88 percent annually according to IMF data. And because that complies with my Golden Rule (meaning that government spending is growing slower than the private sector), the net result according to OECD data is that the burden of government spending is shrinking relative to the size of
    The post New Zealand’s Remarkable Economic Transformation appeared first on ValueWalk.

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  33. Gabriel October 14, 2016 at 3:26 PM #

    Bernard
    Left to me there will be no DLP.There is no way that I would vote for that inefficient,ineffective bunch ‘o hooligans and thugs in ties.This is not yesterday.Its years of observing this party.
    Left to me,there will be laws to measure standards of performance and accountability in the public and the private sectors.There will be parliamentary committees to demand accountability of ministers and the captains of industry so called.Stiff penalties, loss of pensions,loss of office and future prospects of holding office.Based on the shiz I see these poor rakey wild boys doing,the party’s candidates should all lose their deposits next round.

    Like

  34. David October 14, 2016 at 4:01 PM #

    @Bernard

    How is individual performance measured in the public sector? Or is there blanket salary limits only. You get the point?

    Like

  35. Bernard Codrington. October 14, 2016 at 4:19 PM #

    I said in another blog that the human mind is a fascinating phenomenon. There was an argument in physics that light was a wave and not a particle. A team of scientist on each side proceeded to test each other’s theory. The scientist on the wave side discovered that the more they tested, light appeared to be a particle. The scientist on the particle side found out the more they tested the particle theory ,light appeared to be a wave. What really happened? If you look too hard at data patterns appear to surface just because the enquirer wants to see them.
    On the basis of the evidence I see very little similarity between New Zealand and the Barbados case. I think Privatization should proceed on a case by case basis.The litmus test should be Is it performing the role for which it was created? Does the public sector need to continue to perform? What is the fair price for these assets?

    Like

  36. Vincent Haynes October 14, 2016 at 4:51 PM #

    I marvel at the ability of our politicos to talk the hindleg off of a jackass continously without any logic.
    I wonder who taught them?

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  37. Well Well & Consequences October 14, 2016 at 4:54 PM #

    There definitely needs to be a reeling in of the 2 governments, they have too much freedom to drag the country into corruption and scandal..,

    …..the private business sector need muzzles and filters, particularly Cow, Bizzy, Maloney, Bjerkham etc so they cannot continue to interfere in the lives, future and wellbeing of the majority population, they have no right, employing a couple hundred people does not give them that right and for christ sake…….. it’s time these same greedy corrupting lawbreaking business people start going to prison for nonpayment of taxes and all the other criminal acts they perform and practice on the island without any consequences….they same way they think they have a right to control the police and lock up the majority. …keep them out of the people’s business.

    All these players, between governments and private sector.spent decades turning the island into a laughing stock with their viciously corrupt and well known criminal practices.

    Like

  38. Bernard Codrington. October 14, 2016 at 4:56 PM #

    @ David 4:01pm,
    This is a question for Caswell. I left the Civil service many years ago. At that time there was an annual review of the performance of the employees and based on satisfactory performance he/she was given an increment in his salary scale.

    I worked the rest of my life in state owned or state financed corporations. Basically the same principle was applied with some pecuniary incentives for extraordinary performance.

    In both cases if one did not perform one never got promoted and in some bad cases were given the option to resign or retire early. So yes there were penalties, rewards and sanctions. In any case one joined the Public Service to provide national service at rates lower in some cases than the Private Sector. Money was seldom the issue.

    Like

  39. Bernard Codrington. October 14, 2016 at 5:13 PM #

    @ David 4.01pm contd.

    If your point is that money and performance is correlated. Research studies do not support this notion. Very often recipients cheat or push the work load to levels below. In other words exploit the reportees below them.

    Liked by 1 person

  40. David October 15, 2016 at 9:06 AM #

    [Barbados Underground] Comment: “The P Word Resurfaces” Bin B Barbados Underground

    Like

  41. David October 15, 2016 at 4:42 PM #

    From Cou Cou & Flying Fish Column Daily Nation

    “THERE’S A STRANGE scent surrounding the deal between the Sanitation Services Authority (SSA) and the private waste haulers.
    Cou Cou got a whiff of the odour and it had us gasping. The peculiar smell hit us when we started to connect the dots that led to the agreement, which allows private haulers to service four rural parishes – St Lucy, St Peter, St John and St Philip – leaving the other seven parishes for the SSA to clean.
    The first dot was the consistent deprivation of trucks, equipment and even protective clothing so the SSA could effectively do its work.
    The second dot occurred after SSA workers held a week-long strike in July 2015 to support striking Barbados Investment and Development Corporation employees and the Customs & Excise Department, who were at odds with Government, resulting in massive garbage pile-ups across the island. One day after that action ended, the SSA workers were protesting again as their management docked their pay for the period for which they were on strike. The message in Government’s action was clear.”

    Like

  42. John October 19, 2016 at 9:53 AM #

    I’ll give you an example of a case where Government took over two private enterprises in the past …. long long ago.

    The Bridgetown Water Supply Company was contracted by the Government to supply Bridgetown from Benn Spring in Newcastle Woods.

    The pipe was duly laid and water brought to Bridgetown.

    The fountain commemorates the feat.

    As time went on, demand increased.

    There was a drought and the Barbados Water Supply Company was unable to meet its obligations.

    Bridgetown and all the standpipes and plantations along the pipeline suffered.

    One year there was a landslip which took out a section of the pipe under Codrington College.

    No water at all and a mad scramble to find other Spring sources.

    Bath Spring was tried, not enough.

    I have seen a horizontal shaft about 200 feet long dug into the cliff from an access shaft just past Codrington College … dry, never hit a spring.

    Bowmanston was found by accident and augmented the supply.

    The Barbados Water Supply Company was set up to run water to rural Barbados.

    It was contracted to install standpipes below the 700 foot contour which was the highest elevation of one of its sources.

    After a certain amount of time it was clear it could not meet its obligations.

    Matters came to a head when a second well was sunk at Everton, upstream of Bowmanston.

    Inevitably, the stream ran dry!!!

    Legal action ensued and the Government decided enough was enough, the Private Sector was incapable of meeting its commitments.

    There was also legal action over the water supply at Cole’s Cave which ended up at the Privy Council.

    Trent-Stoughton v. The Barbados Water Supply Co., Ld. (1893)

    This decision was a precedent setting one where land value is concerned.

    The Water Works Department (WWD) was formed in the 1890’s and was eventually superseded by the Barbados Water Authority.

    Senn has the history for those who wish to follow an interesting period in our development.

    http://barbadoswaterauthority.com/?p=360

    If the Private Sector wanted to get involved in water supply it could form a Company, raise capital and make a real desal plant where the source of water was the sea.

    It could negotiate a price per cubic meter with Government and so contribute to the augmentation of the public water supply ……. for profit!!

    Like

  43. David October 22, 2016 at 6:45 PM #

    Congratulations to the SSA, Barbadians are seeing a regular pickup of garbage now that the private sector has gotten involved.

    Like

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