@PDC

MY REACTIONS/RESPONSES ARE IN CAPITALS. TODAY IS A HEAVY WORK DAY FOR ME, SO I WILL REVIEW YOUR FURTHER REACTIONS IN DUE COURSE.

“Much of what you stated in the first paragraph of your last blog under this thread is correct. And, what you described there has largely come about through the broad mass of Barbadians and many others’ being indoctrinated and trained in Western Finance and Economics – two very odious ideologies and practices. [WHEN WILL THE PROCESS OF RE-EDUCATION BEGIN?]

However, you said: “If I visualize this new scenario for Barbados properly, there is a matrix, so that if “Mr. Hinds” wants to go to Equatorial Guinea, for example, we can check what it would cost the average Equatorial Guinean to stay here. If we have no such information, we can find a near equivalent?”.

Of course, we in Barbados must and can know what it would cost the average Guinean to stay here!! [NO DISRESPECT,BUT YOUR REPLY SUGGESTS SOME OF THE LITTLE GLITCHES THAT MAY NEED TO BE WEEDED. A GUINEAN [FROM THE REPUBLIC OF GUINEA] IS NOT THE SAME AS AN EQUATORIAL GUINEAN, FROM ANOTHER REPUBLIC. IN CASE THIS IS ALSO NOT CLEAR, THEY ARE ALSO BOTH DIFFERENT FROM PEOLE FROM GUINEA BISSAU AND PAPUA NEW GUINEA.] So, there is no real question about the availability of that information and hence no real need for an equivalent. [PLEASE CONFIRM THAT THE DATASETS ARE CORRECT. SEE PREVIOUS COMMENT.] Although the latter would be desirable of having still for academic purposes.

The foreign exchange the NCB would give you – the Bajan traveller – for your own needs would be sometimes based on analyses of broad ranges of expenditures incurred/likely to be incurred (flexibility); would be based on average expenditures incurred/likely to be incurred; would be based on analyses of spending trends; and would be based on the net foreign exchange earned by the productive sectors of the country, or the net international reserves position of the country, from time to time. [DO YOU HAVE A DRAFT OF THE SURVEY/QUESTIONNAIRE ON WHICH THIS WILL BE BASED, SO THAT WE CAN REVIEW IT? IT SOUNDS VERY DETAILED AND I REAR THAT THE TRANSITION MAY LEAD TO RUSHED IMPLEMENTATION AND UNHAPPY TRAVELLERS.]

Such considerations of flexibilities, spending averages, and spending trends, in particular, would be done to properly counter the types of issues you raised in the latter parts of your last the submission under this thread, without losing sight of the real objectives of this type of approach that will replace exchange rate parities with the Barbados dollar; and, yes, given that we would recognize that there will be differences in the real costs of many travelers to Barbados and of Bajans to the outside world. [YOU WOULD RECOGNIZE OR DO RECOGNIZE? HAVE YOU LOOKED INTO THIS ALREADY?]

livinginbarbados, the approach of making sure that transactions involving the importation of goods and services into Barbados, or the exportation of goods and services, are simply denominated in the foreign currencies required by the dominant parties would therefore be implemented to help achieve certain objectives:

1) to make sure ( along with the approach of zero-”pricing” imports into Barbados) that Barbados is NO LONGER seen as “an extension” of the US, UK, and so many other economies, from the point of view that Barbados must NOT continue to bear the great costs of producing and distributing goods and services in those economies; [YOU LOST ME HERE]

2) to make sure that the domestic long term costs ( money-wise) of local production and distribution are brought on fairly equal terms (money wise) with those of other countries, esp through the greater, direct use of foreign currency values/local and foreign juxtapositions in Barbados ( of course NOT the quantities of commodities and services imported, distributed, produced etc. being lowered in Barbados – but in that sense then to greatly increase them consistent with certain realities); [LOST ME AGAIN. ‘MONEY WISE’ SEEMS CONFUSING, GIVEN YOUR PROPOSED TWO-TIER MONETARY SYSTEM.]

3) to make sure that the costs of living and do business in Barbados are reduced eventually; [BY WHAT DEGREE AND FOR HOW LONG WILL THE COST OF LIVING FALL?]

4) to bring about greater amounts of actual foreign currency inflows and stocks in the country, esp based on real activities, in the medium to long term;

5) to ensure that the gaps in the external government/private debt to GDP ratios are eventually significantly narrowed, esp viz-a-viz the real elimination of the domestic “price conversion component” and the expected increases in foreign exports/foreign currency earnings; and [LOST ME AGAIN. THIS DEBT RATIO GAP CONCEPT MEANS NOTHING TO ME.]

6) to remove much of the very unnecessary and costly paper and administrative work that is now required in relationship to certain foreign exchange-oriented transactions [BUT IS THIS NOT REPLACED OR EVEN EXCEEDED BY THE ADMINSTRATIVE PROCESS TO BE PUT IN PLACE FOR DETERMINING TRAVELLERS’ FX NEEDS, FOR INSTANCE.]

So there you have it again, livinginbarbados. [GOT TO BE HONEST, I DON’T HAVE IT]”

@Themis
I have not had much experience teaching my doctrinaire form of economics, as I spent most of my career applying it. I have had a good chance to see these doctrinaire ideas in action and also compare them to another doctrinaire system of what is now the former Soviet Union. Neither system sit well within the world as outlined by PDC, though elements of the Soviet system find echoes.

As my comments suggest, I have serious fundamental doubts about the theory and practicality of the PDC doctrine (sorry, it is that, just different to what PDC does not like now).

It is interesting to me to think through how the rest of the world, which will not be working the same system as outlined by PDC, will cope with the new Barbados. Caricom/CSME may be things of the past by then, but if not, the implications are very serious.

livinginbarbados,

The process of re-education has long started, though there is a lot of effort to be gone through still.

You are missing the point, it does NOT matter where these visitors come from. It is what the costs (average) will be of such persons STAYING IN BARBADOS for the period in question. You seem to suggest that this scheme would have to do with costs that are somewhat incurred in Equatorial Guinea, Guinea Bissau, whatever. If that is so, your suggestion is wrong. For these juxtaposing applications only have to do with costs incurred here.

As well, we are a political party and our mandate would be to – whenever we become more organized – involve those available Barbadian techocrats, academics, experts, lay people and others in the process of the substantial formalization of such an approach. Of course, such persons would have to be quite capable of dealing with the modalities and functionalities that will subsume under those greater political objectives that will themselves be central to this approach.

So, clearly it would be unwise for us to sit here and tell you how a particular survey would be structured then. But, so far we are laying the foundation blocks that will in fact be built upon by ourselves and the above mentioned people. Surely, we will get there eventually; to the apex of such an approach, which would be the post-implementation stage.

You should NOT have been lost on that point. For, Barbados through our importing NOT ONLY the quantities of goods and services, BUT ALSO our importing the prices of these goods and services, is indicating a priori that it has very little power or autonomy to determine what the eventual prices will be to local consumers of such imported goods and services which were produced and distributed under entirely different production, costs and other structures in countries like the US, UK, etc.

Where Barbados’ exports of goods and services are concerned it has already been put in positions where in many cases it has to take what it gets ( “price”-income) from outside markets, under various trading agreements, standards of procurements, etc.

BY THE WAY A FUTURE PDC GOVERNMENT SHALL MAKE SURE THAT GOODS AND SERVICES THAT ARE DESTINED FOR FOR THE EXTERNAL MARKET ARE PAID IN LOCAL/CURRENCY “PRICES”. MEANING THAT THE PRODUCERS, EXPORTERS OR OWNERS OF SUCH GOODS AND SERVICES ARE GOING TO BE PAID IN THE AMOUNTS THAT THESE GOODS AND SERVICES WOULD OR COULD FETCH ON THE LOCAL MARKET.

livinginbarbados, you disappoint us, you must know full well that there are social benefits and costs, political benefits and costs of many variables, NOT just MONEY COSTS. NOT ONLY direct and indirect AND money costs, BUT ALSO direct and indirect social and political costs. To get a better understanding of the point about equality simply re-read the portions of those blogs above that deal with the fact that transactions in which goods and services are denominated in the foreign currencies required, that the NCB will SIMPLY give the amount in foreign currency to the importers, etc, and they in turn would pay to the NCB the amount – in local money costs – it would take for importers to get the goods and services through the seaport/airport or whatever. Or where land was concerned, the fact that a foreigner leasing a plot of our lands would be asked to pay in foreign exchange for the lease, and then the local “owner” of the land would take this foreign exchange to the NCB, and the NCB would then give to the so-called land owner the amount in local dollars that it would take to lease such lands (NOT dealt with earlier).

Come on, livinginbarbados, do NOT be laughable, how could we stand here and tell you how much would the cost of living fall by and how long. Come on do NOT trivialize the matter.

In the context of our approach, surely such ratios should mean much to you. For, they shall be important in measuring how successful this approach would be. But, note – if you did NOT properly get what we were saying – that we talked about narrowing the EXTERNAL GOVERNMENT/PRIVATE DEBT TO GDP RATIOS. WE NEVER SAID ANYTHING ABOUT DEBT GAP RATIOS IN THE RELEVANT BLOG ABOVE. And note too we did not even place this approach in the context of the balance of payments of this country, because if we had included it in the above analyses, you would have seen how clearer – theoretically – such an approach would operate. Anyhow, by reducing the cost of the amounts to be borrowed ( lower actual money costs brought on by removal of exchange rates parities and interest rates, etc. ) to finance the importation of goods and services – which invariably must be accounting for a substantial amount of the financing of imports into Barbados – or by removing the TAXATION imposed on the imports at the level of the seaport/airport/customs etc., it is clear that – in this case – with the cost of borrowing becoming very much lower than now; with the costs of production inputs and services becoming lower and thus leading to lower “prices” in the market place, and with the state sector, then, better, more efficiently allocating such cheaper goods and services ( mainly with social goods) within the state sector, that NOT ONLY will the entire GDP become lower in nominal money terms ( in real terms the GDP will increase substantially), BUT ALSO the overall debt burdens associated with such goods and services will get much lower than now. Thus, this external government/private debt to GDP ratio would indicate to us the percentage of foreign exchange borrowed that benefited GDP growth, as opposed to the percentage of foreign exchange borrowed that costed the GDP. So, by lowering the local and external cost of borrowing from external sources – through the elimination of exchange rate parities – through significant increases in foreign exchange stocks that would pre-empt much external borrowings – through the local cost of production and distribution being substantially lowered ( the amount of foreign borrowings based on local domestic costs ) – and through the size of the government being drastically reduced, etc. and at the same time by increasing the benefits of foreign exchange borrowings to GDP growth over the costs of such foreign exchange borrowings to GDP growth, it will be clear that where real GDP is increased substantially, which is bound to happen – there will be found that the gaps (deficits ) in the external Government/private sector debt to GDP ratios will be narrowed.

There will be fewer administrative costs (money) involved simply because costs of government will be substantially reduced. And NOTE these costs incurred will be necessary.

Finally, livinginbarbados, what you however must do is to look at the tremendous costs and problems of having these exchange rates parities with the Barbados Dollar remain in existence, as against what we are proposing, and then tell us which approach you think is better.

PDC

@PDC
“…we hope that you are NOT suggesting in some way that we are communists…”

I am not. But, you proposals have their closet parallels with the Soviet system and the command economy structure.

I personally do not take ‘communist’ to be a term of opprobrium, but a descriptor for a certain economic and social arrangement.

On your earlier comments, you way you want to use “Barbadian technocrats, etc.” but then say “it would be unwise for us to sit here and tell you how a particular survey would be structured”. Is it unwise because I am a NON-Barbadian technocrat? Why not engage help as early as possible?

On the debt/GDP ratio gap, my remarks were set against yours so it should have been clear to what I was referring. Anyway, I still have no idea what you are saying.

On the rest, I think you will have a really hard time getting people on board with your ideas. They are extremely complex and I think given that they require a new state of education, which I believe is not well enough developed to give you the base you need. If you can convince me that you have really found that most people understand then let me happily rest in the minority.

“Come on, livinginbarbados, do NOT be laughable, how could we stand here and tell you how much would the cost of living fall by and how long. Come on do NOT trivialize the matter.” I suspect that you may be like many other politicians then. You want to make a promise but when I try to pin you down you say that cannot be done. Many governments make a very clear commitment (even with their doctrinaire economics) of price stability or a certain inflation target over a given period, starting from a point where prices are rising by larger amounts, therefore offering people a reduction in the cost of living. That you cannot do that, worries me. Vive la change!

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