Est.2007

Barbados Underground

Bringing News and Opinions to the People

Banner promoting anonymous crime reporting with a phone and contact number 1 800 TIPS (8477), featuring the Crime Stoppers logo and a QR code for submitting tips.

Governor Marion Williams Says Foreign Reserves “Sufficiently Adequate”, No Need To Approach The IMF At This Time

← Back

Your message to the BLOGMASTER was sent

CONTACT THE BLOGMASTER ONLY

Governor of the Central Bank of Barbados, Marion Williams
Governor of the Central Bank of Barbados, Marion Williams

Yesterday Governor of the Central Bank of Barbados Marion Williams delivered the quarterly review of the economy for the second quarter. In light of the prevailing economic conditions her presentation was eagerly awaited and continues to be analyzed given of the unprecedented global economic conditions.

Governor Williams was unequivocal in her assessment of the adequacy of the foreign reserves. There has been much comment on BU concerning the rate as which the foreign reserves are being depleted. The Governor quoted in the daily press suggests the foreign reserves are “sufficiently adequate.” Barbados’ foreign reserves currently register at 1.3 billion dollars. Barbados will join International Monetary Fund (IMF) member countries allowed to withdraw USD80-85 million dollars from the special drawing rights facility which will serve to provide support to the reserves.

The willingness of G20 countries to approve the SDR drawdown is interesting and ironic. Wasn’t it the G20 countries who precipitated the the destruction of the global financial markets? The result of it all has been to decimate the economies of developing and emerging economies around the globe.

How does the Governor’s assurance to Barbadians fit with the pronouncements by the Gurus of Economics Messrs Dr. Frank Alleyne and Dr. Avinash Persaud? Both Alleyne and Persaud have been quoted in the media since the global financial meltdown that Barbados should approach the IMF sooner rather than later to solicit financial support before the economy worsens. Our impression is they were not referring to SDR drawdown but the standby arrangements which the IMF avails to members with the obligatory conditionalties attached. Governor Marion Williams was lucid in her assessment yesterday when she indicated NOW is not the time to enter a standby arrangement with the IMF.

Governor Williams reference to the 1991 –1992 period when the foreign reserves bottomed at 6 million dollars may yet be irrelevant. The current crisis from all reports is unprecedented and the need to utilize untested responses may yet prove to be the greatest challenge for Barbados.

Discover more from Barbados Underground

Subscribe to get the latest posts sent to your email.

169 responses to “Governor Marion Williams Says Foreign Reserves “Sufficiently Adequate”, No Need To Approach The IMF At This Time”

  1. The People's Democratic Congress Avatar
    The People’s Democratic Congress

    Before we make our comment under this thread we realize that this very important thread was put up by BU for more than seven hours. Yet, up to the time of our beginning this comment there has been no comment provided under it.

    Surely, this absence of comments about the Governor of the Central Bank’s review of the very dismal 1 half performance of the so-called Barbados economy – well, Barbados is in a depression – may show that- many DLP supporters who once used to gloat – on this blog and elsewhere – about the coming into office of this damned DLP Government, and about how much better things would become, materially and financially, with the DLP’s ascension in January 2008 – appeared to have fled to the mountains away from the valleys of despair and distress that this miserable DLP Government is bringing to this country at this stage.

    And, what a disgraceful sight to see many of these so-called supporters running from roun’ the DLP and up into the more open air more vulnerable mountains!!

    Anyhow, the Daily Nation newspaper, Wednesday, July 28, 2009, in an article under the headline: “we do not need the IMF now”, reports the Governor of the Central Bank of Barbados, Dr. Williams, as saying that whereas the International Monetary Fund ( IMF) has been asked to rescue at least five Caribbean countries including Jamaica, Barbados does not need an IMF intervention at this time.

    Well, of course, the goodly Doctor was reported to have made such a statement at the press conference on Tuesday of this week.

    Furthermore, the retiring governor went on to say – in this said article – that the country’s foreign reserves stood at BDS $ 1.3 billion and that it was expected to benefit from US $ 85 million in special drawing rights which G 8 countries agreed to earlier this year to extend to members.

    Now, this was the same governor that said in 2007 and 2008 in Barbados, when the sub-prime mortgage crisis and global credit crunch and disarray in the global financial system was beginning to unravel, that there was no likely impact to be felt on Barbados in the short term. But, look at Barbados now!! Is Barbados NOT now in a depression, partly as a result of those severe imbalances – some of which were manipulated?

    Also, the fact that the Governor could have said that Barbados is NOT in a crisis primarily because, in her view, we have BDS $ 1.3 billion in foreign reserves, is really a sick joke on the part of the Governor. This kind of stupid silly statement should have warranted the Governor to go into retirement earlier than planned!!

    And, equally more asinine is her view too that the country is now in recession based on some foolish text book scenario. The fact is that this misery for an economy was in recession since about the 3 rd quarter of last year. So, what nonsense about Barbados being in recession, as coming from her!!

    And finally with regard to those Barbadians who believe that when Barbados goes to the IMF and for whatever reasons draws down monies under the SDRs – and that there is no possible cost or conditions imposed on Barbados for having done so, had better go and read IMF.COM and read up information on the SDRs.

    But, the biggest of these costs of drawing down on such are the opportunity costs of the country NOT earning enough foreign exchange to avoid going to the IMF for use of such funds.

    PDC

  2. David Avatar
    David

    BU is a little concerned at the message being put out there by the Governor when our economy has suffered consecutive negative growth which categorises as a Recession. Barbadians need to feel a sense of urgency at the implications of the current situation and more so if the global economic recession continues.

  3. Avatar
    Anonymous

    PDC or whoever you are, ‘we realize that this very important thread was put up by BU for more than seven hours. Yet, up to the time of our beginning this comment there has been no comment provided under it.’. Do you think that the world is sitting just waiting to write a blasted book on evertyhing on this blog? Maybe that’s your calling–judging by the screed you throw out on everything, you have nothing to do. Try earning a living! Oh look, a cockrach walked on my bakes. I better send a blog post. Maybe if you DID something rather than WRITE and REGURGIATE these TIRED and TOTALLY UNITELLIGIBLE COMMENTS the country might have a hope.

    I see the word ASININE in your remarks. Takes one to know one? Strewth!

  4. Bonny Peppa Avatar
    Bonny Peppa

    Anonymous,
    I second your commotion. Ya in lie.

  5. Avatar
    Anonymous

    BONNY PEPPA, I do not know who PDC is or are but what the English call UTTER RUBBISH must have had this in mind.

    On the substance, the PM of Trinidad said yesterday that the recession was over and it was time to slacken belts. The oppostion jumped up like they had sat on a tack and said, no. People need to keep belts tight. Can you believe that? So who do you want to believe. In Barbados, when I was there last week, the country looked like it was struggling. Hardly any visitors during the big event of Crop Over. When I was at the airport yesterday the Brits were swarming home. Why? When THE big cultural event is a day or so away? Coz there is nothing to interest them in Barbados after the sun is done and the sex has worn off. Not a blessed thing? No shops. No attractions. Just sun. Too expensive. Too rude, and the bunch at the airport are the pits.

    The numbers are not so relevant as the experience. The country FEELS in a slump. So, how do you all feel? Richer or poorer?

  6. Hopi Avatar
    Hopi

    More smoke n’ mirrors. At the end of the day when people can’t feed their families what the hell does these ‘devaluing’figures mean to them? Keep the bait and switch going to give the gullible public a false sense of hope and security. They are all reading from the same damned script.

    @Bonny Peppa……I see ya still got that fire buring. Go on with ya bad self girl!

  7. Avatar
    Anonymous

    I found this blog when I was in Barbados last week. Some of the comments seem very good but there are some wild people contributing here who could really scare people with their openly racist views. I dont know if they realise the kind of damage they can do. Jamaicans for instance would rather think about investing and visiting somewhere else. Most Europeans if they see this, and it’s a regular find on a Google search, would think that they are likely to be in real danger from people on the island. I would do something to temper down the violent and filthy language. It’s your future you’re putting on the line. Just a view, mate.

  8. Avatar
    Anonymous

    Final comment. Today’s Trinidad Guardian has our Governor Williams saying “I look out of my window and I don’t see a recession”. The Hyatt is brimful with people for Pan Am Games. Emancipation festival just start at the Savannah. The city has more good hotels in about a 5 mile radius than the whole of Barbados. Where do you think the smart money and people are going to think of heading? Bridgetown or Port of Spain?

  9. Avatar
    Anonymous

    For a central banker, the major problem is the foreign reserves.-We are in good shape as long as we have a sustainable level of foreign reserves.

    For the rest of us, jobs and the ability to maintain a decent standard of living is important. This can only take place in an economy that is doing well.

    The economy is not doing well now and will not for the foreseeable future. The central bank’s statements might be assuring for the business/monied classes but for the middle and lower classes it looks like hell awaits us down the road

  10. Carson C. Cadogan Avatar
    Carson C. Cadogan

    Anonymous // July 30, 2009 at 11:03 am

    It is called free speech. If you want censored speech bur yourself a copy of the Nation newspaper.

  11. Bonny Peppa Avatar
    Bonny Peppa

    Anonymous,
    You seem to have a chip on your shoulder and I can’t help you.

    The world is in recession and if the great America is struggling every day to save jobs and people are losing their home left, right and centre, who is Barbados not to be ‘struggling’ too? I think that we are still holding our own a certain so if you are a profit of gloom and doom no one can make you think differently.

    Statistics show that this is one of the biggest Crop overs, visitors wise so because you see a few English returning home, that says nothing as far as I am concerned.

    When comparing us with Trinidad and where you think that ‘smart people’would prefer to go, I think of their high crime rate first and foremost but you seem to have a real bias against Barbados ,so there’s none so blind as he who will not see.

    As for the sea, sun and sex, how much more do the others have to offer as opposed to us? Gimme a break do.

    I repeat in closing, you seeem to have a big chip on your shoulder my friend.

    Good riddance.
    Stupseeeeeeeeeeeeeeeeeeeeee.

  12. Bonny Peppa Avatar
    Bonny Peppa

    Hopi,
    My honey-suckle, Bonny is trying to rise from de dead.

    Mwahhhhhhhhhhhhhhhhhh

  13. Bimbro Avatar
    Bimbro

    David, u seem keen to diagnose a recession!! Relish the consequences, do u?!!

  14. Avatar
    Anonymous

    Bonny Peppa, it’s not against Barbados to point out that things are not rosy. Bajans think they live in heaven and that those who speak of things that are not all rosy are demons. That’s a Bajan problem. It’s amazing that the high crime does not deter many people going to Trinidad, in fact it seems to make no difference at all to visitors because they know that most is targeted internally. How do you think the Summit of the Americas could be held in PoS if the violence was not manageable. All of the Pan Am Games athletes are not being ferried in armoured vehicles. So, the fear of crime is relative to the gains of other things. Barbadians seem to think that offering a low crime environment is a pull. It is not, if you are bored to tears. Worse, when there is a crime it’s hushed up like it’s a state secret or glossed over.

    So, it’s worth thinking why ‘crime ridden’ Trinidad is sitting saying that it has no recession while safe old Barbados is finding itself still in one. Could it be that an economy is working while another is idling, and crime makes not a jot of difference?

    As for chip on the shoulder, what would you call the great Mr Chip on the Shoulder BIMBRO?

  15. Patriotic Bajan Avatar
    Patriotic Bajan

    PDC
    I am an independent voter who have supported all of the major parties in Barbados. I could not support you as party because you would take the country back in the dark ages with your no taxation policy. The poor would become poorer with your policies
    In the last election you said that you would abolish taxation. How many votes did you get?
    The DLP supporters have nothing to be ashamed off. The American economy contracted and unemployment is projected to reach 10% before year end. That is the wealthiest country in the world. What resources do we have to maintain all of the ideal positions that were promised before the elections?
    Where is this massive misery? Are you visiting the crop over activities?
    We will have to feel some of the pain that developed countries are feeling, We are dependent on them for our high standard of living. It is the tourist who brings foreign exchange. It is the international business sector that brings foreign exchange.
    By the way anonymous I am in Trinidad on a regular basis and none of the hotels come close to Sandy Lane or the Crane.
    What eats your heart out is the standard of living we enjoy because of the sun, and sea tourism.
    We have had leaders who look out for the development of our people although we are not blessed with great resources like you. My black brothers of Laventille are hopeless in your resource rich land and they just kill one another every day.
    Sorry my Brother but Barbados is a Gem.

  16. Avatar
    Anonymous

    Boy that anon blogger @3:32 really got barbados on his mind.

    Talk about envy – it is really dripping from his/her pen.

    Let’s face it anon even in what was once relatively safe Tobago,visitors are running from there in the hundreds because of the rising crime.

    Port of spain got men shooting each other in broad daylight like the wild wild west,and when they don’t have bombs going off in dustbins they have crazy drivers on the road killing people daily.

    Why are these people from the other islands so filled with envy and hatred of barbados.

    We are not perfect,but for goodness sake at least admit to yourself that we have been doing a lot of things right.

  17. Avatar
    Anonymous

    BIMBRO diagnosing something that is wrong is the first step to fixing it. If a sick man keeps saying he’s well, then those who can help see no need to treat anything. The recession is clear. Look at the hotels and restaurants and the relatively empty stores and malls. People at the very least are acting as if they have little money free to spend. Fewer tourists spending less (remember that most are British and there is a recession there–no doubt). Higher costs for gasoline and now water, after tax increases last year will of course not help if people have seen no rise in pay. Lay offs at several big companies mean that business is doing badly: you read about these? More to come.

    Can you handle that reality. Let’s pretend there is no recession if it makes you feel better.

  18. Bimbro Avatar
    Bimbro

    I’m only addressing named-posters! Get a name and then u can engage me! A lack of discipline is at the heart of Bim’s troubles, mirrored by e.g. your not using a name. I propose to start the cure for Bim’s ills, here and now!

  19. Electric Avenue Avatar
    Electric Avenue

    BU: Twice I have submitted a comment which you have not published. Is there a reason for that, and if so, what is it?

  20. Avatar
    Anonymous

    BIMBRO only wants to address ‘named persons’. What a deluded person you are. What kind of ‘name’ is ‘199’ or ‘BIMBRO’? You are more of a caricature than people suggest. What a ridiculous person!

    Call me Eric Gairy. Happy now?

  21. Avatar
    Anonymous

    Actually, BIMBRO, why don’t you pick at name that will make you feel safe and snug and I will stay with it. Promise. Cross my heart and hope to die. I am dying with laughter, but what a wheeze. Knock yourself out thinking of a good name, now. Once in a lifetime chance.

  22. Avatar
    Anonymous

    BIMBRO, sorry to go on. The more I read that comment about names the more I wonder where you can buy that sort of pompous attitude. I read your comments in a few threads. You will start the cure of Bim’s ills. Please, let me have assisted suicide instead!

  23. WoW Avatar
    WoW

    Anonymous // July 30, 2009 at 4:45 pm
    Anonymous // July 30, 2009 at 4:43 pm
    Anonymous // July 30, 2009 at 4:41 pm

    YOU ARE AN IDIOT

  24. Avatar
    Anonymous

    (Waiting to be named). I do not know what WOW is, but using BIMBRO’s criterion, I guess, that is a name. Why oh Why? Waste One Word? Wash Our Walls? The possibilities are endless. BIMBRO, please name me quickly.

  25. Bimbro Avatar
    Bimbro

    No, A, u have to think of the name yourself. It must reflect your perceived personality! Assisted suicide can be arranged, A!! U like my name, don’t it!!

  26. ericgairy Avatar
    ericgairy

    Whoo, hoo! I could not wait for BIMBRO, who seems like a slow coach and I am no longer Anonymous. Bonny Peppa (a nice name) and WoW, please note. No more anonymity for me. Yee haw!!!

  27. ericgairy Avatar
    ericgairy

    BIMBRO, I saw your suggestion, and we are of one mind. Assisted suicide would been a good name too. Drat. I should have taken that. Thanks for thinking of me. I feel so liberated now.

    Don’t it? Is that English? Don’t it what?

  28. ericgairy Avatar
    ericgairy

    Anyway, I hope you are all having a beer with Prez Obama. My choice would be Stag. I hear they have Red Stripe on the menu, so the region is represented. Let’s be proud of our Jamaican brothers and sisters for that one. I wonder if they have heard of Banks? It’s now available in the US, I hear.

  29. Bonny Peppa Avatar
    Bonny Peppa

    Eric Gairy,
    You couldn’t have chosen a more suitable psuedonym for yourself. Tell you why, now, the way you are talking, you sound like a person that has been out of touch with reality for a longggggggg time and if my memory serves me correct, Eric Gairy died about 40 yrs ago.

    Now to get to the real crux of the matter, sure, every living and even dead Barbadian KNOWS that this lil rock is our own Heaven darling. You are rambling like a person that is either drunk or intoxicated. Which it is? Either way you talking bare shite, OK?

    Why are you so opposed to Bimbro? Are you a batty boy. He isn’t. OK? Now you can return to your decomposed state Mr.Gairy.

  30. David Avatar
    David

    Listened with interest to the leader of the opposition’s response to the move by the government to secure its 80 million SDR from the IMF and to signoff on a couple other loans inject into the foreign reserve pool. Not sure of the point Mottley is trying to make. It is one thing to oppose but we sense she is losing the plot somewhat. Would appreciate being enlightened on the current opposition’s strategy.

  31. Hard Driver Avatar
    Hard Driver

    Please David
    isn’t there something you can do to stop people using the name anonymous ???
    It makes following the threads really confusing …..

  32. Hard Driver Avatar
    Hard Driver

    Oh sorry … Eric Gairy …. is he your role model?

  33. Hard Driver Avatar
    Hard Driver

    Anonymous // July 30, 2009 at 11:06 am

    “The city has more good hotels in about a 5 mile radius than the whole of Barbados. Where do you think the smart money and people are going to think of heading? Bridgetown or Port of Spain?”

    Excuse me?? You either never been to Barbados or you dont come from Trinidad … OR what you call good hotels we call guest houses … lolol
    what a joke!!

  34. ericgairy Avatar
    ericgairy

    Hard Driver, I said good, but should have said also sizeable (ie capable of dealing with large events). From the Hyatt you can see the Crown Plaza across the street, and the Hilton is only a few minutes away. I wont include the hotels between downtown PoS and the airport. Barbados has the Hilton and the Grand Barbados, then the extraordinarily expensive Sandy Lane Hotel. Plus a lot of smaller, boutique hotels. If I missed another big one please correct me. Your Minister of Tourism spoke recently of how Barbados had lost out to TT in the conference business. The hotels available are a key reason. You should read his remarks.

    I was in Barbados just two days ago.

  35. ericgairy Avatar
    ericgairy

    Bonny Peppa, I did not know that the chosen name need relate to someone living, and just because a certain Eric Gairy died several years ago does not mean that another one is not living. Does Barbados only allow one name per person?

    I am not opposed to Bimbro but after reading his remarks over several postings I read the rantings of a man so obsessed with Jamaica that I wonder if your question could not apply to him. I trust that you have also seem a few of his presentations. I suggest you read them again and tell me if they do not seem a little strange. Oh, he is supposed to be a Bajan so can throw insults around at will. No other mortals dare do that?

  36. ericgairy Avatar
    ericgairy

    It is funny, Bonny Peppa, how you seconded my commotion and then you say that I am rambling, etc. I get it. If I agree with you you like me. If I do not you detest me. Think about how you form your opinions, I suggest.

  37. Bimbro Avatar
    Bimbro

    Choosing ‘eric geary’, I can only perceive that ur an old-timer! Well, listen friend, the world’s moved on since those days although I’m sure ud relish a return to Ton Ton Macoute (Gairy’s henchmen) methodology! These days we’re far more circumspect about shouting ‘recession’ because of the possible consequences of which ur almost certainly, unaware or else ud keep your lips zipped, somewhat more tightly!! Anyhow, I’m prepared to pardon you to an extent as you’ve obviously, heeded my wise advice and adopted a name, even though not a very welcome one in this hemisphere! I trust that your comrades will follow-suit and identify themselves – especially, the one pretending not to be who he really is, as if somebody’s fooled!! Mr Eric, I live in a different time zone from u!! U need to be aware of elementary facts like these if ur to begin to attempt, with us, to resolve the economic affairs of our great country!!

    If u were Barbadian, ud recognise that ‘don’t it’ is Bajan! Thus, not being Barbadian, I’m less inclined to debate with u matters of our national economic well being!!

    Lord!! Bonny, u tell e darling!! Jus wha I was saying!!

    Lord ah mercy!!

  38. David Avatar
    David

    In recent days the issue of Special Drawing Rights (SDR) has become topical. The following was submitted by BU family member Looking Glass to help educate the BU family:

    The idea of adequate foreign reserves is misleading.  Borrowed money is used to shore up reserves to meet certain requirements, then used the money for ‘unproductive’ purposes. As a result debt increases. The deficit budget will increase the national debt now close to $20bn. An offshoot/subsidiary of the IMF & World Bank monitors and records the indebtedness of all countries. The attached will shed some light on SDRs etc.

    Special Drawing Rights (SDRs)

    The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries. SDRs are allocated to member countries in proportion to their IMF quotas. The SDR also serves as the unit of account of the IMF and some other international organizations. Its value is based on a basket of key international currencies.

    Why was the SDR created and what is it used for today?

    The Special Drawing Right (SDR) was created by the IMF in 1969 to support the Bretton Woods fixed exchange rate system. A country participating in this system needed official reserves—government or central bank holdings of gold and widely accepted foreign currencies—that could be used to purchase the domestic currency in world foreign exchange markets, as required to maintain its exchange rate. But the international supply of two key reserve assets— gold and the U.S. dollar—proved inadequate for supporting the expansion of world trade and financial development that was taking place. Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF.

    However, only a few years later, the Bretton Woods system collapsed and the major currencies shifted to a floating exchange rate regime. In addition, the growth in international capital markets facilitated borrowing by creditworthy governments. Both of these developments lessened the need for SDRs.

    Today, the SDR has only limited use as a reserve asset, and its main function is to serve as the unit of account of the IMF and some other international organizations. The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members; and second, by the IMF designating members with strong external positions to purchase SDRs from members with weak external positions.

    SDR valuation

    The value of the SDR was initially defined as equivalent to 0.888671 grams of fine gold—which, at the time, was also equivalent to one U.S. dollar. After the collapse of the Bretton Woods system in 1973, however, the SDR was redefined as a basket of currencies,today consisting of the euro, Japanese yen, pound sterling, and U.S. dollar. The U.S. dollar-value of the SDR is posted daily on the IMF’s website. It is calculated as the sum of specific amounts of the four currencies valued in U.S. dollars, on the basis of exchange rates quoted at noon each day in the London market.

    The basket composition is reviewed every five years to ensure that it reflects the relative importance of currencies in the world’s trading and financial systems. In the most recent review in November 2005, the weights of the currencies in the SDR basket were revised based on the value of the exports of goods and services and the amount of reserves denominated in the respective currencies which were held by other members of the IMF. These changes became effective on January 1, 2006. The next review by the Executive Board will take place in late 2010.

    The SDR interest rate

    The SDR interest rate provides the basis for calculating the interest charged to members on regular (non-concessional) IMF loans, the interest paid and charged to members on their SDR holdings, and the interest paid to members on a portion of their quota subscriptions. The SDR interest rate is determined weekly and is based on a weighted average of representative interest rates on short-term debt in the money markets of the SDR basket currencies.

    SDR allocations

    Under its Articles of Agreement, the IMF may allocate SDRs to members in proportion to their IMF quotas. Such an allocation provides each member with a costless asset on which interest is neither earned nor paid. However, if a member’s SDR holdings rise above its allocation, it earns interest on the excess; conversely, if it holds fewer SDRs than allocated, it pays interest on the shortfall. The Articles of Agreement also allow for cancellations of SDRs, but this provision has never been used. The IMF cannot allocate SDRs to itself.

    There are two kinds of allocations:

    General allocations of SDRs have to be based on a long-term global need to supplement existing reserve assets. General allocations are considered every five years, although decisions to allocate SDRs have been made only twice. The first allocation was for a total amount of SDR 9.3 billion, distributed in 1970-72. The second allocation was distributed in 1979-81 and brought the cumulative total of SDR allocations to SDR 21.4 billion.

    A proposal for a special one-time allocation of SDRs was approved by the IMF’s Board of Governors in September 1997 through the proposed Fourth Amendment of the Articles of Agreement. This allocation would double cumulative SDR allocations to SDR 42.8 billion. Its intent is to enable all members of the IMF to participate in the SDR system on an equitable basis and correct for the fact that countries that joined the Fund after 1981—more than one fifth of the current IMF membership—have never received an SDR allocation. The Fourth Amendment will become effective when three fifths of the IMF membership (111  members) with 85 percent of the total voting power accept it. Currently, 131 members with 77.68 percent of total voting power had accepted the proposed amendment. Approval by the United States, with 16.75 percent of total votes, would put the amendment into effect.

    IMF EXTERNAL RELATIONS DEPARTMENT

    Public Affairs Media Relations

    Phone:
    202-623-7300  Phone: 202-623-7100

    Fax: 202-623-6278  Fax: 202-623-6772

  39. Bimbro Avatar
    Bimbro

    David, I agree with u on that, point at least! No one, currently in the House, as far as I can c, has the enormous eloquence of Arthur! However, eloquence alone is n’t sufficient to govern a country, at least, not to govern it wisely and fairly, as many Bajans will attest, subsequent to the said ‘gentleman’s’ previous administrations!! or, do u want e back?!! I think not, at least without major reformation to manacle his hands and help to protect the rights of ordinary, Barbadians such as ITAL legislation!! I’m not surprised u think that Mia’s losing the plot! One only has to look at her, nevermind, listen to her!! Discipline, the word I introduced earlier in this debate. Discipline, in all matters, including one’s diet, Mia!! – an exercise!!

    Hard Driver, don’t waste time asking David anything. Just as my complaint to him about somebody else on this blog, I’ve made the suggestion about people not using the name ‘Anonymous’, before and then, too, he took absolutely no notice of me!! I’m sure that Bajans could think of a name, effortlessly! Mine occured without a second’s thought!!

    ****************

    Hard Driver // July 30, 2009 at 9:03 pm

    Oh sorry … Eric Gairy …. is he your role model?

    *****************

    ‘Hard Driver’, my thoughts exactly!! What a name to aspire to!!

    Eric, I in ‘throwing nuh insults around at will’ but giving u a direct representation of the situ, here, in the UK! If u don’t like it remonstrate with ur insane Jamaican bros!!

  40. David Avatar
    David

    Additional info submitted by BU family Looking Glass. Interesting that the bulk of the 250 billion SDR voted by the G20 170 billion will end up in the coffers of RICH countries!

     

    Special Drawing Rights

    Held in reserve

    Apr 8th 2009
    From The Economist print edition

    A brief guide to the IMF’s “currency”

    SPECIAL Drawing Rights, or SDRs, are often referred to as the IMF’s currency. Although that is useful shorthand, the SDR is not, in fact, a currency, but rather the IMF’s unit of account. The value of an SDR is defined as the value of a fixed amount of yen, dollars, pounds and euros, expressed in dollars at the current exchange rate. The composition of the basket is altered every five years to reflect changes in the importance of different currencies in the world’s trading system.

    SDRs nevertheless represent a potential claim on other countries’ freely usable currency reserves, for which they can be exchanged voluntarily. Alternatively, countries with strong external finances can buy SDRs from countries which need hard currency. On April 2nd the G20 countries authorised the IMF to issue $250 billion in new SDRs. The advantage of a fresh SDR issuance is that it immediately augments countries’ foreign reserves without needing to be lent.

    However, this benefit comes with a serious drawback. Although the G20 portrayed the new SDRs as a quick way of channelling resources into emerging economies, SDRs are in fact allocated in proportion to countries’ existing IMF quotas (see table).

    CHART

    This means that around $170 billion of the $250 billion of new SDRs that are to be issued will land in the reserves of rich countries, because they have the lion’s share of existing IMF quotas. Still, the increases in the reserves of some emerging economies are not trivial. South Korea’s will grow by $3.4 billion, India’s by $4.8 billion, Brazil’s by $3.5 billion and Russia’s by $6.9 billion. Another sign of the instrument’s bluntness can be seen from the fact that China’s vast reserves, already nearly $2 trillion, will go up by $9.3 billion.

    Of course, the IMF hopes that some rich countries (or reserve-rich emerging ones) will lend their share of the new SDR allocation to those in greater need. But this is by no means guaranteed. America, for example, needs Congress’s approval to part with its share. The last proposed SDR allocation, of $21.4 billion, was approved by the IMF’s board in 1997. But although 131 countries with 78% of the total votes in the IMF accepted the proposal, it was never put into effect. Such decisions require 85% support—and America, with nearly 17% of the votes in the IMF, never approved it.

  41. Bimbro Avatar
    Bimbro

    David and ‘Looking Glass’, Barbadians are n’t interested in any ‘SDR’!! We’re a judicious and conservative people who will adopt the appropriate, belt-tightening measures to c us through this ‘time of slight restraint’!! Note, nuh use of the ‘r’ word, here!! People need to b wise!!

  42. David Avatar
    David

    Thanks to Looking Glass for submitting the two pieces of information above which are very interesting!

    On the subject of names the vast majority of commenters used handles, some prefer not to, we encourage them to.

  43. Bimbro Avatar
    Bimbro

    I sometimes wonder what Arthur would say, if, or when he visits dese blogs!! I can jus hear e now!!

    “Leh me c wha dese fool r saying now”!!

    Laaaaaaaddddddddddddd!!

    Arfur!! Why did u have to disappoint us so!!

  44. Bimbro Avatar
    Bimbro

    An, Arfur, u know wha I mene!! doan pretend!!

  45. ericgairy Avatar
    ericgairy

    BIMBRO (and some others), you encourage a name, then you complain about the name chosen, after indicating that it was not something you wanted to do. You’re all contrarian, and seem to want the cake and eat it too. Just because the name represented someone who you disliked in the past does not make its current ‘wearer’ old or that person. So think again about writing “Choosing ‘eric geary’, I can only perceive that ur an old-timer!” I have read about Ton Ton, etc. but we younger people can learn a lot from the Internet.

    I appreciate the lesson in Bajan. But don’t it help to read carefully and stop confusing people with the giving of choice and then trying to take it away?

  46. ericgairy Avatar
    ericgairy

    Dear David, you write “An offshoot/subsidiary of the IMF & World Bank monitors and records the indebtedness of all countries.” What is this offshoot/subsidiary? These institutions are single and autonomous?

    You also wrote “The idea of adequate foreign reserves is misleading.” (Madame Governor was quoted as saying the tautology, “sufficiently adequate”.) Adequate anything can be misleading, as adequate must be qualified by what is called the need. So, I have no idea what you are trying to argue. The reserves are adequate to cover the perceived need of paying for a certain amount of goods and services from abroad, so they are usually defined in terms of ‘months or imports’ that they can cover and 3 months is often regarded as ‘adequate’. More is better perhaps but may not realistically be needed.

    You offer some extra info from a Yardbroom named person. I don’t know if you really read it or understand it. It says that the SDR is not a currency but a unit of account, then describes how countries can exchange SDRs for other currencies (“countries with strong external finances can buy SDRs from countries which need hard currency”), which is a clear contradiction that it is not a currency. Countries are not buying ‘units of account’, and the SDRs they obtain are usable because they “augment[s] countries’ foreign reserves”. The Economist article is therefore confused and wrong. Shame on them!

    When the BIMBRO person writes “Barbadians are n’t interested in any ‘SDR’!! We’re a judicious and conservative people who will adopt the appropriate, belt-tightening measures to c us through this ‘time of slight restraint’!! ” the reply is that is irrelevant whether people are interested in SDRs. They exist and are there to pay for things. The rest of the sentence is just empty and meaningless rhetoric (an r word).

  47. ericgairy Avatar
    ericgairy

    Dear David, I attributed some information to “yardbroom’ when it should have been ‘looking glass’.

    I am glad that you clarified the matter of anonymous, with “On the subject of names the vast majority of commenters used handles, some prefer not to, we encourage them to.” As I am reading through this blog, I see its use widely and few if any complaints about it until just recently. But we know that you cannot force a name of a person. In the same way you cannot force ideas or opinions on them, though some commentators do not seem to accept that, especially some who seem to believe they are “judicous and conservative” people.

  48. ericgairy Avatar
    ericgairy

    I’m reading again the comments of BIMBRO. I am not sure what is relevant about living in different time zones, maybe that has something to do with something. The world turns.

    What does “Thus, not being Barbadian, I’m less inclined to debate with u matters of our national economic well being!!” really mean? That no one is allowed to discuss Barbados with you unless they are a Barbadian? You say you are in the UK. Is this your view about things going on there? If so, why waste your time there being ignored and just not go back to Barbados where you can discuss happily with your fellows? It seems to be your view that no one who is not Barbadian has anything useful to offer Barbados. Do you really believe that and how do you know who is a Barbadian? I did not see a test or fee to enter the blog. I have Barbadian relatives. Does that count? How are you defining Barbadians. Does Eric Holder, the American attorney general, count? Your prime minister was born in England, so is he disqualified?

  49. ericgairy Avatar
    ericgairy

    Dear David,

    I am thinking of starting a blog like this one. Could you offer some advice based on your experience? Does it take a lot of time to moderate the comments? You can send me a message to my email that I filled in if it better than adding to this string of comments. It could be of interest to see if Trinidadians are willing to be free with their opinions in writing, even with made up names.

  50. Rumplestilskin Avatar
    Rumplestilskin

    PDS Said ”Now, this was the same governor that said in 2007 and 2008 in Barbados, when the sub-prime mortgage crisis and global credit crunch and disarray in the global financial system was beginning to unravel, that there was no likely impact to be felt on Barbados in the short term. But, look at Barbados now!! Is Barbados NOT now in a depression, partly as a result of those severe imbalances – some of which were manipulated?

    Also, the fact that the Governor could have said that Barbados is NOT in a crisis primarily because, in her view, we have BDS $ 1.3 billion in foreign reserves, is really a sick joke on the part of the Governor. This kind of stupid silly statement should have warranted the Governor to go into retirement earlier than planned!! ”

    LOL. The first part, I had wondered if I was the only one who remembered that particular ‘interesting’ statement.

    The second part, may not be a sick joke, but worse, an indictment of her understanding of economics, as indicated initially by the statement last year.

    Certainly, a healthy foreign reserve is desired, but when the underlying economy is in severe withdrawal, the economy is still sick and further, with continued extensive foreign expenditures without earnings, the surplus will soon be eroded.

    Truthfully, I do not always agree with some points in your posts, but on this one, I agree, one has got to wonder.

    Peace

The blogmaster invites you to join the discussion.

Trending

Discover more from Barbados Underground

Subscribe now to keep reading and get access to the full archive.

Continue reading