Future Generation of Barbadians Will Have to Repay Billions in DEBT

Minister of Finance Chris Sinckler

Minister of Finance Chris Sinckler

In piloting the amendment to the Local Loans Act in Parliament this week, Minister of Finance Chris Sinckler said it was a reality of governing small countries with resource constraints that Government would at times be unable to meet commitments for demands, provision of goods and services and the orderly management of the country based on the resources it brings in from taxes and impositions. “So it is a necessary requirement that facilities be put in place to allow for borrowing for various purposes, – “In this case, this is entirely domestic”Barbados Today

It is an old public relations ploy –use the noise in the market to minimize the impact of a negative message.

BU will leave the deep dive analysis and the implications of government raising the debt ceiling under the Domestic Loans Act by $1 billion to $7.5 billion to the economists. However, it is fair to conclude if government sees the need to increase its capacity in 2016 to carry MORE debt a fair conclusion to make is that we have a problem.  Do you need a reminder that Barbados is already ‘sinking’ under the weight of existing debt, one our children will have to repay? Also worrying is the fact Barbadians have not seen value for the debt accumulated in a relatively short period. No wonder the private sector is alarmed.

In the United States and other developed countries the public feels comfortable knowing there are independent sources with a commitment to critique public policy. Whether it comes from university academics, think thanks, journalists et al, there is no shortage of alternative analyses from where the citizenry is able to be adequately informed in those countries. In Barbados critical and independent analysis on financial issues is sorely lacking. The problem exist although the country has benefited from a heavy investment in education under successive governments.

We accept the discussion about Barbados debt profile must be contextualized under domestic and foreign. Some pundits have shared the view that the raising of the domestic debt ceiling is a response to the IMF thumbs down to government borrowing from the central bank read printing of money. We should not forget the ‘’deal’’ the central bank made with commercial banks to reduce the minimum interest rate to be able to manipulate demand for Government Savings Bonds. This sleight of  hand move has largely gone unreported by the media and local pundits – Wild Coot the exception. It has been reported the move has yielded 100 million in bond sales so far.

Barbadians must become more active in discussions about the state of the economy. How can we leverage the free education we have received to distil the issues devoid of political claptrap? Why do we feel comfortable hearing the government’s position followed by the counter by the Opposition and vice versa? Are we not capable of generating alternative views to help to inform a dispassionate assessment and conclusion?

The two questions Barbadians have to ask and answer:-

  1. Are government policies helping to grow our foreign exchange revenue?
  2. Are government policies helping to strengthen our local infrastructure and the ability to meet financial commitments in a timely manner?

Barbadians should keep a wary eye on a soaring US dollar and the price of a barrel of oil. Savings from low oil price has been a lifeline for the Barbados economy by reflecting positively on forex reserves. A strong US dollar might negatively impact tourist demand in key tourist markets like the UK and Canada. A recent Bloomberg report  – Barbados Leads Bond Rout as Dollar Peg Means Pricier Sunbathing highlights how exogenous factors will continue to impact our small open economy. How will Barbados respond to the new normal? Enlightening leadership is required.

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91 Comments on “Future Generation of Barbadians Will Have to Repay Billions in DEBT”

  1. enuff December 21, 2016 at 7:49 PM #

    But wuh Alvin talking? So why other buildings on the “swamp land” are not collapsing?

    Like

  2. Bush Tea December 21, 2016 at 8:14 PM #

    Wunna hear dat Alvin is an idiot..?!!
    According to his logic, since a truck once ran off the road in Lancaster and caused some casualties, all trucks should subsequently be banned from using that road.

    Like

  3. William Skinner December 21, 2016 at 11:35 PM #

    @ David,
    They say New York is built on a river.
    @ Hal
    It is almost impossible to think outside the box with some people. The Chinese build scaffolding by using the bamboo. We prefer to believe that we are being the best we can be.
    We grew up flying kites made of thrash bone and coconut sticks………..that’s when we used to think now all we do is declare ourselves experts and pseudo intellectuals.
    We used to use the sea for recreation and food. For example : A good diver with a piece of iron with a sharp point used to go “spearfishing” and put his catch on a piece of wire and eat fresh fish almost daily………………

    Like

  4. Hal Austin December 22, 2016 at 4:48 AM #

    It is nonsense to say that housing and commercial properties cannot be built on Weymouth. That is poppy cock.
    Since 1956, when the Combermere building cracked and students were moved to the Drill Hall, good civil and structural engineers could have rebuilt on the site.
    So what are we do do: allow prime land in the centre of town to be a dump for old public service vehicles?
    The only noise pollution we will get at Weymouth will be during the construction. What we badly need in Barbados, if this is what is implied, is a one-car policy – restricting homes to having a single car. But to do this means improving public transport.
    This mindset says a lot about why Barbados fails to develop, apart from in the minds of people who know no better.

    Like

  5. enuff December 22, 2016 at 7:46 AM #

    Hal – Commercial yes, residential no. I am not in the Alvin camp. Prime land? Context papa context. You’re not in Engulund. lol

    Like

  6. William Skinner December 22, 2016 at 8:27 AM #

    @ Hal
    ” What we badly need in Barbados, if this is what is implied, is a one-car policy – restricting homes to having a single car. ”
    I think that cars for non-commercial use should not exceed 1400 cc. Anything above that should be excessively taxed as a deterrent.
    No need to have SUVs and big pick up trucks as status symbols. But then we would be told “its a democracy” and people can spend their earnings as they choose.
    Inferior roads and a very poor public transportation system are major contributors to non productivity. Also contributing to stress and inertia at the work place.
    The corporate bosses riding in their luxury cars and begging the government for “subsidies” morning , noon and night are non productive. Quite frankly those working for under $500. per week are propping up everybody else and are perhaps the most productive right now.

    Like

  7. millertheanunnaki December 22, 2016 at 9:44 AM #

    @ Hal Austin December 22, 2016 at 4:48 AM

    There is some merit to your argument. A project of involving modern ‘environmentally sound’ housing development is necessary for the regeneration of the City.

    You cannot have economic and social regeneration without people living in the city of very near to the city.

    There is a crying need for proper housing in that area to relieve the congestion in the Greenfields and its surroundings.

    The only problem with your proposed site is that those ‘hallowed halls’ of Harrison College would either have to be relocated or be transformed (as will happen eventually) into a ‘convenient’ secondary learning institution catering to those living within its catchment area.

    Like

  8. Hal Austin December 22, 2016 at 9:48 AM #

    Miller…
    That’s not true about Kolij.In any case, it is an over-rated institution. I prefer Parkinson.

    Like

  9. enuff December 22, 2016 at 10:01 AM #

    What constitutes a good residential development? I repeat, regeneration is a good idea but housing at Weymouth not so good. Nelson Street, however, yes!! Do you know that the majority of the land in the Nelson Street area is owned by expats (long dead) and in arrears to the Land Tax Department for over 30 years?

    Like

  10. enuff December 22, 2016 at 10:09 AM #

    William Skinner – Who were the ones laughing at Wilfred Abrahams idea to cycle more?

    Like

  11. William Skinner December 22, 2016 at 10:48 AM #

    @ enuff
    I don’t know who were laughing. However the idea of cycling by politicians or those high up is nothing new. Peter Morgan used to cycle around back in the 70’s and Glenroy Straughn used to cycle to work when he was involved in the management of the transport board .
    In terms of professionals our postmen and women always “graduated” from bicycles to motorcycles and government messengers used to pedal far and wide .
    I am surprised that we don’t use more fuel economy scooters but the bad roads and inconsiderate drivers may be the problem.

    Like

  12. Hal Austin December 22, 2016 at 10:52 AM #

    If you want people to cycle then remove the licensing tax. The health benefits will outweigh any revenue from taxing bicycles. In fact, 50cc motor cycles should also be tax free.

    Like

  13. TheGazer December 22, 2016 at 11:00 AM #

    I see the like has replace thumbs-up and thumbs -down. Shedding my cloak of anonymity on July 1, 2017

    Like

  14. David December 24, 2016 at 4:02 PM #

    More work and less talk, urges Inniss

    Like

  15. Vincent Haynes December 24, 2016 at 4:05 PM #

    Image may contain: 1 person, text

    Like

  16. Well Well & Consequences December 25, 2016 at 1:08 AM #

    http://www.nationnews.com/nationnews/news/91762/-sewage-critical

    Look ACs, see the whales here, lol…those are the huge ones to get you pitchfork buryers out of the people’s parliament, yall can get new jobs burying pitchforks in the UK.

    .http://www.nationnews.com/nationnews/news/91763/respite-bus-woes

    No one wants Fruendel’s blighted blessings, let him keep them for himself, he will need them.

    Like

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