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.

It Is Crunch Time

← Back

Your message to the BLOGMASTER was sent

CONTACT THE BLOGMASTER ONLY

Dr. Don Marshall, Senior Fellow, UWI Cave Hill
Dr. Don Marshall, Senior Fellow, UWI Cave Hill

There comes a time in the affairs of man when he must take the bull by the tail and face the situation – W. C. Fields

The recent downgrade in the outlook of Barbados investment paper by Standards & Poors given our  BBB  rating continues to generate much debate in Barbados. What seems to be fuelling the debate even more is the hint that a downgrade to our investment grade maybe around the corner given the rapid rate Barbados continues to accumulate debt. Barbadians have become alarmed at the prospect of having its investment paper perched at the brink of junk rating, a status most unfamiliar to Barbadians through the years. The fallout from attracting low credit rating by the credit rating agencies is the high cost to borrow if Barbados needs to float bonds in the capital markets.

Isn’t it ironic the current financial crisis which precipitated the global recession and led developing countries like Barbados to go enter an economic tailspin would have to suffer the penalty of credit rating downgrades by agencies which played a part to begin with?  BU rejects the explanation by Professor Dr. Avinash Persaud that the credit rating agencies failed when rating structured products and not country ratings. How can one excuse the model for one area of their business over the next?

Dr. Avinash D. Persaud, Chairman of Intelligence Capital Ltd

The current debate from the academics has tossed out some interesting takeaways for John Citizen. In one corner we have the world renown Barbadian Professor Dr. Avinash Persaud who believes the imminent downgrade of Barbados investment paper to junk status will be disastrous and must be avoided at all cost. In the other corner we have the homegrown Senior Fellow at UWI Sir Arthur Lewis Institute Dr. Don Marshall who believes Barbados should seize the opportunity to find creative ways to reduce government spending and enable the environment to encourage entrepreneurial projects to lead growth by expanding exports. He has been very bold by suggesting the Barbados Defence Force should be bastardized to support the police recruitment drive to benefit from opportunity cost savings.

BU is on the side of Dr. Don Marshall. Interestingly we are about to celebrate our 43 year of independence and Dr. Marshall has been strident in advocating the dismantlement of the Barrow (Father of Independence) model which has served us well. The billions of dollars which Barbados has invested in our people in the post-independence period now has to spew forth results. It is crunch time! In makes no sense boasting of how Barbados has used education to enfranchise its people but we continue to build out an economy based on mendicancy i.e. tourism and foreign direct investment

It seems the opposition party remains fixed on sucking political mileage from the defensive economic position the government finds itself. The political polarization in Barbados makes it mandatory that both political parties demonstrate leadership to bring the country together now more than ever to generate ideas. What better time than in the month of November to do it.

Discover more from Barbados Underground

Subscribe to get the latest posts sent to your email.

114 responses to “It Is Crunch Time”

  1. Carson C. Cadogan Avatar
    Carson C. Cadogan

    “He has been very bold by suggesting the Barbados Defence Force should be bastardized to support the police recruitment drive to benefit from opportunity cost savings”

    I agree with him one hundred percent. The Barbados defence force is serving no useful purpose. It is an unnecessary drain on the public purse. We could well do without it. The saving to the country would be tremendous.

    We do not need the defence force, Sidney Burnett-Alleyne is no longer coming to invade to Barbados.

  2. Carson C. Cadogan Avatar
    Carson C. Cadogan

    Persaud made no sense to me all. Far too many of these so called academics are demostrating that they have little common sense.

    I wonder what job the Barbados Labour Party has promised him if he helps them to bring down the Democratic Labour Party regime.

  3. David Avatar
    David

    Dr. Persaud does get a lot of airplay for sure.

    Dismantling the defence force is not straight forward. Releasing all those trained men and women on our streets must be well taught out if disbanding the BDF were to be considered.

    Interestingly we note Dr. Persaud and Mia Mottley attended QC around the same time.

  4. Adrian Hinds Avatar
    Adrian Hinds

    David we must archive everything that Persuad says.

  5. St George's Dragon Avatar
    St George’s Dragon

    I am struggling to understand the basis for BU’s rejection of Dr Persuad’s position. Another downgrade of Barbados’ financial rating cannot be a good thing however you look at it.

    Whether you like it or not, there is a set of rules which are applied across the world by Governments and financial institutions which dictate the availability of credit. If you don’t comply with them they won’t lend to you.

    This is where Dr Persaud is coming from.

    What countries like ours need to understand is that we may not want organisations like the IMF to dictate policy to us, but we are still bound by their rules.

    If we called on them for assistance, the IMF would look at what our borrowings are, and how we aim to reduce them (as they would consider them too high at the moment).

    In our current economic position, if we want to avoid going to the IMF and instead borrow money from international institutions, they will (strangely) also look at what our debts are and how we aim to reduce them.

    We end up in the same place. The IMF would make us instigate public sector savings – and so would the private sector lenders.

    You choose which one you want – IMF imposing cuts on us, or we impose cuts in order to borrow money from international banks to stay afloat.

    If we do neither we end up like Haiti.

    We are not immune to what happens elsewhere in the world. Whether we like it or not, we have to play by world rules.

  6. Twitted by BarbadosNews

    […] This post was Twitted by BarbadosNews […]

  7. Dennis Jones (aka Living in Barbados) Avatar
    Dennis Jones (aka Living in Barbados)

    @St George’s Dragon: “If we called on them for assistance, the IMF would look at what our borrowings are, and how we aim to reduce them (as they would consider them too high at the moment).” [For clarity, the Fund would look at the whole economic landscape, not just debt. It has already flagged in the recent Article IV consultation that the current debt profile is unsustainable.]

    “We end up in the same place. The IMF would make us instigate public sector savings – and so would the private sector lenders.” [As you identify correctly that the deficit and debt are major problems, it is better to acknowledge the need to correct those rather than say “make us instigate” as if that is unwarranted. For mainly political reasons, countries are often reluctant to do what is needed to correct agreed economic problems. The Fund is good at ‘taking the blame’.]

    “You choose which one you want – IMF imposing cuts on us, or we impose cuts in order to borrow money from international banks to stay afloat.” [Again, better to not say ‘impose’ when it is really doing what needs to be done, if revenue cannot be raised.]

    A major difference with the Fund’s involvement is that their mandate for macroeconomic assessments means that most lending agencies (especically other international institutions) look for an IMF ‘seal of approval’ before wanting to engage a country. That will either be in the form of an IMF-supported economic stabilisation program that is ‘on track’, or policies that the Fund feels are ‘in the right direction’. That stamp is not there from a rating agency.

  8. Dennis Jones (aka Living in Barbados) Avatar
    Dennis Jones (aka Living in Barbados)

    “The fallout from attracting low credit rating by the credit rating agencies is the high cost to borrow if Barbados needs to float bonds in the capital markets.” [The fall out is greater than that. Barbados may not be able to borrow in capital markets because of limits on how much non-investment grade paper private sector lenders can hold (no matter what interest rate they would wish to charge). If money is not coming from other areas such as the IMF or World Bank then the brick wall is right in front. That’s how the market works, and it’s not really partial to one country or another.]

    Why should it be seen as ‘bold’ to rationalise government activity (in this case BDF and police)? It’s done elsewhere in the world, in the sense of national defence forces supplementing policing activities. That view may highlight why dealing with excess public sector spending will be a problem. There is nothing bold about it. The problem is really in seeing as a bold solution one piece of logical rationalization when what is needed is a wider overhaul of public sector activity.

  9. Avatar
    Anonymous

    David

    I disagree with you where you stated in your article that avinash persaud is world renowned.

    What is this world renowned person doing,what prestigous international financial institution or university is he giving his vast wisdom to right now,and where has he given it to before?

    Avinash persaud is another one of those financial empty talking heads that go around to small or developing countries like barbados spouting economic rhethoric and in the process conning the governments into giving them expensive consultancies.

    Name one new thought or enlightened idea he has spoken so far?

    Starcom a pro BLP station obviously thinks he is the cat’s meow,but then again they are not too bright in that place and any gloom and doom predictions which persaud is renowned for,fits right into the talking points of mia mottleey.

    So it is obvious that starcom is doing the bidding of the master,the BLP.

  10. Dennis Jones (aka Living in Barbados) Avatar
    Dennis Jones (aka Living in Barbados)

    @Anonymous, “I disagree with you where you stated in your article that avinash persaud is world renowned.

    What is this world renowned person doing,what prestigous international financial institution or university is he giving his vast wisdom to right now,and where has he given it to before?”

    [It’s always easy to ‘rubbish’ people one dislikes, but it looks so silly when there are pieces of evidence that are easy to find to answer the questions. I suggest you do a little homework, even if it’s only on the Internet and Wikipedia, http://en.wikipedia.org/wiki/Avinash_Persaud.

    Last time I looked Prof. Persaud was part of Barbados’ National Council of Economic Advisors, so maybe he’s being a devilish double agent acting as if he is helping the DLP government.

    In terms of “Avinash persaud is another one of those financial empty talking heads that go around to small or developing countries like barbados spouting economic rhethoric and in the process conning the governments into giving them expensive consultancies.” I guess that Canada, for one, is small and developing, to name just one country that gets the prof’s advice. Sorry to disillusion you but a lot of his work does not come with much lolly.]

    But what are a few inconvenient truths thrown around in the face of baseless remarks?

  11. peltdownman Avatar
    peltdownman

    The problems that Barbados has with the “evil” IMF stem from the last time they assisted Barbados and insisted on the country taking measures that eventually pulled us out of a situation which was not as bad as the one we are in now. At that time, the IMF team was led by a rather severe German lady (who had the private sector eating out of her hand). At any time I was expecting her to turn up in jackboots and say “vee are ze ones who tell you vot to do!” They were suggesting unpalatable measures such as devaluation, and the charging of duty on industrial inputs, among many others. In the end a compromise was reached, and it was hard, but it worked, and we had 17 years of relative prosperity that followed. Why? Because the government, the unions and the private sector decided that the country’s interests came before political posturing, and the Social Partnership was born. From what I can understand, the IMF has come a long way since those days, when it was obvious that their policies were causing unbelieveable hardship. But one way or another, we have to “bite the bullet” here in Barbados, or the consequences will be dire. We have to give up on the idea that everything should be provided free or subsidised by the state. Better a short, sharp pain than dragged-out agony. I think that the IMF could be a big help. Unfortunately however, in Barbados the acronym “IMF” actually means “political disaster”. So where do we go from here?

  12. Avatar
    Anonymous

  13. ROK Avatar
    ROK

    @David
    “Dr. Marshall has been strident in advocating the dismantlement of the Barrow (Father of Independence) model which has served us well.”

    I would like to suggest that the “Barrow Model” was dismantled long time. What we have is the “Tom Adams” model of government.

    When I think of the miles we have rolled back downhill, it is impossible to say that what we are experiencing now is the Barrow model.

    It is only in recent times that we went back to thinking that what is Bajan is good; for example the “Buy Bajan” campaign which is no different from the buy local campaign by Barrow in the 60’s & early 70’s.

    The build up of the BDF would certainly not have been part of Barrow’s model because he knew the dangers of building up military in a country like ours (Grenada & Guyana for example). He felt that our military might should not exceed the requirements for security.

    The man had a total vision of how Barbados should develop and he certainly thought that for Barbados to develop, the people had to develop. Hence the thrust towards free education; the investment in UWI, the establishment of SJPP and Community College.

    In terms of vision, these institutions have not lived up to the vision at all. The principles which drive Government today are also far from his vision. Each Department of Government nowadays have a charge for everything. They are not far from private sector practices.

    The principle of the role of Government as a facilitator has gone through the eddoes and Government is now the principal player, getting into competition with the private sector and all.

    The very country whose President Barrow called a cowboy is who we have been embracing since Tom Adams. We have become a satellite and view all those against the Sun as foes.

    No! No! No! Don, we are experiencing the Tom Adams legacy and not the Barrow vision of a developed “people”.

    Let us put it this way: free bus fares so children have no excuse to miss school; the establishment of the constituency councils; the attention being paid to community and NGO efforts; the idea that each MP must report to his/her constituency; and the sharp increase in local CBC programming are more inkeeping with the Barrow vision and you and I know that these have not had a chance to work yet.

    We need to go back to the Barrow vision as much as when we go back to Marcus Garvey we see a Black vision which we dare not implement for fear that the sun stop shining.

  14. Adrian Hinds Avatar
    Adrian Hinds

    ROK i agree with you. Barrow was against the establishment of the Defense force.

  15. ROK Avatar
    ROK

    @David

    This whole thing about downgrading, etc. is a whole myth created by those who intend to manipulate the system.

    Having said that, I agree with Dr. Marshall about encouraging enterprise and export. I want to let him know though that I have been advocating that for many years and is now viewed as a madman.

    Too many people are of the opinion that we don’t have anything to export. They also feel that we should not manufacture if we could get it cheaper elsewhere. I keep hearing this foolishness about re-inventing the wheel. It is time that this idea stops floating around.

    We need to understand that even if we can make one we should make it because the day that the imports get expensive or designs change that calls for total re-investment then we in ducks guts.

    Not only that, it is time that we marry culture into what we produce if we talking about branding. Stop the pepper sauce in rum bottles. The monkey should be better studied and developed for storing cool drinking water. Our clay products need developing to bring it to the quality of ware.

    We need to tell people of the benefits of the molasses we produce. We need to stop the Flour Mill from bleaching flour with chemicals and let it bleach naturally because the chemical bleaching produces a bi-product called alloxan which destroys the pancreas and cause diabetes. In this regard we also need to stop telling ourselves that diabetes is hereditary, that is a myth.

    It is amazing the lies and the myths upon which this society is built. Keep rolling Don. I don’t think they will call you a madman and you may actually help me change my reputation. LOL!

  16. Avatar
    Anonymous

    The DLP is taking us down

  17. Hopi Avatar
    Hopi

    Short of the plates shifting and submerging that 144sq miles, Barbados will be singing the same tune ten years from now. But what more would you expect from an economy that’s driven by tourism and an international business sector? Isn’t it obvious that when there are quakes in these sectors, that Barbados being as small as she is, will succumb beneath such a burden?

    Barbados is constantly boasting about her education systems which turns out servant after servant year in and year out.

    Didn’t she have to import foreigners to construct her new airport? What happened to all your ‘highly educated’ graduates? No architects, no engineers, no ‘constructionists’?

    The sole purpose of the IMF and World Bank is to keep most nations in bondage esp. natural resource rich nations. They have removed the physical chains because they are easily recognizable, but with the consent of your vision-less leaders, they’ve imposed a more sophisticated form of slavery, i.e economic servitude. Don’t care how you look at it, it is still slavery. Its yet another case of the poor supporting the rich. These two institutions just sit there and come up with scams like providing you with computerized money in exchange for your covetable, hard assets. They also set the oil prices so that they can siphon off the middle for themselves. So yet again you are paying through both ends.

    Its high time Barbados move away from these blood-suckers. Being yoked to these capitalist structures that are of the beast means that the winner takes it all. These are some of the real terrorists that are killing this planet today.

    I know its “TOO MUCH TO ASK” but Africa is the best place for us to restart. All the blood-suckers get resources from there. They then take it and make inferior crap for the most part and we are so happy to lap it up. Why can’t Barbados develop strong, meaningful relationships with the MOTHERLAND? Why can’t we form an economic Bloc with them? I’m sure we’d have a more equal footing with them than with the beast!

  18. Dennis Jones (aka Living in Barbados) Avatar
    Dennis Jones (aka Living in Barbados)

    @ROK, if downgrading is a myth then it must be a myth within a myth, or are you suggesting it’s a myth within some reality? If the latter, what is it that you see as real?

    In a country that has limited natural resources, and wants to trade with other countries, one of the best potential exports is people and their services. Barbados’ education system has not been good at developing ‘exportable’ skills and that should change. Those skills need not be ‘soft’ (like medical or technology or legal skills) but could be ‘hard’ (like agricultural and food production expertise). But if you do not have them well developed at the national level then you do not have them to export.

  19. ROK Avatar
    ROK

    Yes, downgrading can only happen because of the myth that would support it.

  20. Dennis Jones (aka Living in Barbados) Avatar
    Dennis Jones (aka Living in Barbados)

    @Hopi, as you point out Barbados has a hard time meeting its own needs, even though it has a status of a highly developed society.

    What would Barbados really want out of a relationship with African countries and what would it have to get or accept in return? Other than a certain group of educated people there is not a great deal that Barbados has to offer that African countries do not have in abundance: I do not count rum or fish.

    I’ll ignore the misinformed views of the World Bank and the IMF, which do a lot more and it does not even involve money creation. Too much seeing the world as victimizer, which argues against being able to initiate any of your plans because ‘the system’ will always be out there to beat you. So, you need to do a rethink of the world. How and why would the ‘blood suckers’ let you make any move that seemed to be geared toward the progress you foresee?

  21. Driver Avatar
    Driver

    They are planning to dismantle the Transport Board too.

    Right now they have not set our General Manager on vacation for 3 week this is his second week he returns on the 26&27th of this month then his is gone. Luckily he went to Cawmere so he will get a job. (they say they don’t leave each other out, seems more like a faternity to me than a school) Our chairman went there too.

    We understand that about 3/4 more managers are to go too, and our deputy retires next year. Staff here are scared, some new drivers and cleaners are coming one by one, but we understand that they will be mass stripping of the staff.

    It is now our fault the problem with the transport board is inefficient LEADERSHIP adn communitcation. Those are the 2 main problems, they are others but these are the main ones. Along with unqualificed supervisors and officers, imagine some supervisors getting over $5,000.00 and not even having basic qualifications.

    I promise to post another time dealing with the qualificaitions part of the board’s problems.

    Scared Driver

  22. Driver Avatar
    Driver

    That should have been now sent home our General Manager ….

  23. Alex Fergusson Avatar
    Alex Fergusson

    NEWS FLASH, TURN YOUR RADIO TO PARLIAMENT CHANNEL. MIA IS BUSTING THOMPSON TAIL ON THE ECONOMY AND HE IS RUNNING.

    HE OFFERED MIA MOTTLEY THE SAME TIME AS HIM BUT IS NOW BACKING DOWN.

    MIA IS SHOWING WHY SHE IS BETTER SUITED TO BE PM THAN THOMPSON.

  24. Barnabas Collins Avatar
    Barnabas Collins

    It is now obvious that if anyone says anything negative about this government, they are either getting paid from the BLP, BLP yardfowl or the new one is that they went to school at the same time as someone in the BLP. Instead of arguing that S&P was the same group who endorsed some of these same companies who now has the world in this financial mess and never gave them a negative BBB or any bad rating. Our argument is that Dr. Persaud went to school with Ms Mottley….Schupse….And this is coming from people who are obviously well educated. Anonymously or not I would be totally embarrassed to even think about making such a partisan assertion that shows a lack of intellectual acuity. This is the discourse that we are now engaging.

    I sometimes think we hear but do not listen. I will give an example. Yesterday I was listening to one of the radio station’s news offerings and the PM was calling for the people that got plenty when the economy was booming to give back now in hard times. (I agree with him but I am not sure how one can make a business do such). However, my point is that this is the same economy that I never heard the DLP when in opposition thought was ever good. So which times are the PM talking about. I am fully aware that when in opposition, we mordaciously oppose irrespective of what the government of the day said. I will invoke some partisan ire for making this submission but I will qualify anything I observed by saying the reason I think Mr. Barrow thought we should have free education, was not to blindly follow anyone. Mr Barrow in his wisdom may have thought with education, our people would be able to make inform decisions and not regurgitate rum shop folly.

    Finally, I endorsed the change because I thought it was time for another perspective and direction but because I endorsed the change does not mean that everything that come forth from the government is gospel according to David. And I will say that Sarah my mother who likes the BLP or Mr Henry the PM political advisor because I am a card bearing member of the island of Barbados.

  25. David Avatar
    David

    @ROK

    The conversation which the current crisis has evoked is good for Barbados. Most Barbadians have not had to experience real pain caused by previous governments having to implement severe austerity measures if we exclude the 8% cut of the 90s. It is good to hear some of our academics coming out and debating the issues. BU stands firm on the point we will expose agendas and keep the debate honest when suspected or known.

    Dr. Don Marshall made a good point yesterday, much of the investment in education is lost to the current debate because of the need to adhere to secrecy laws if a civil servant or those who work for private enterprise and business guidelines equally restrict contributions to a public discourse like this one. Of course we have other means these people can use to feedback opinion but a personal code of ethics may not support.

    What has always separated Barbados from many is our ability as a people to rise to confront the challenges. In this light the current debate should be seen as positive which we hope will lead to the development of a new model to drive and sustain our success as a little giant in the global village.

  26. Carson C. Cadogan Avatar
    Carson C. Cadogan

    DENNIS

    “Barbados’ education system has not been good at developing ‘exportable’ skills”

    I would risk a bet that Jamaica’s education system has. Murderers, thieves, rapists, drug dealers, gun runners, hit men and women, embezellers, fraudsters, pickpockets, false academics and other low lives.

    You have done very well in Jamaica.

  27. Alex Fergusson Avatar
    Alex Fergusson

    The issue is, why is the DLP running from adebate on the economy? I give Mia Mottley high marks for her debate in Parliament today on the economy.

    It is clear for all to see that the Leader of the Opposition is sound on the economy whereas David Thompson is not.

    We knew this from the Estimates debate on TV where she responded without a scrap of paper, while PM Thompson literally read his presentation

  28. Dennis Jones (aka Living in Barbados) Avatar
    Dennis Jones (aka Living in Barbados)

    @Carson C Cadogan, as is said in most fields, focus on dealing with your own weakness, and building your own strengths, not on the apparent weakness of others. As we’re discussing how Barbados needs to get past its crunch it may be useful to see how others have gotten through theirs, but you cannot lift yourself up by merely gloating others’ failings. It’s a real waste of time and energy. But, if it makes you happy…

  29. ROK Avatar
    ROK

    @CCC
    Man let we do without the slurs nuh. By the way DJ, I long for the day you put up a thread to discuss Jamaica and throw away that phoney UK accent.

  30. peltdownman Avatar
    peltdownman

    CCC, thanks for helping us move forward in this discussion!

  31. Dennis Jones (aka Living in Barbados) Avatar
    Dennis Jones (aka Living in Barbados)

    @ROK, I have written about Jamaica but not for discussion here.

    But, Jamaica’s problems are not the same as Barbados’, either in origin, consequence or solution. Sure, as with any failure, there are lessons in what to avoid, but that may not help much. Let me flag some key differences I see on the economic side:

    Jamaica’s fiscal and debt problems are now decades old, and their potential solutions have not much changed. Some of the potential solutions for debt were institutional (eg when Jamaica had a lot of debt to the World Bank and IMF it was when these institutions were not prepared to give debt relief on such debt. That’s now changed but Jamaica was not a beneficiary.) The fiscal problem has always been about discipline–or lack of it. In the face of limited revenues, spending has never been seriously controlled, and now most of it has to go ahead as it debt service. A real Catch 22. What has been interesting is that Jamaica has found many ways to keep international capital market/investor confidence even when they were not in programs with the IMF and so was able to borrow and get by. But it happened because there were at key times good enough policies in place to satisfy lenders.

    Having an economy heavily dependent on commodities creates major vulnerabilities and uncertainties (even the oil exporters have had severe ‘boom’ and ‘bust’) but the good investment of the booms is key to weathering the busts (most commodity exporters have not done that well, but those that did are solid now, eg Chile, Norway, Gulf States).

    Jamaica has been a major transit point for drugs and the capital flows related to that are sizeable and complicated, but they severely distort how the economy works.

    Devaluation has not worked to restructure the economy–and many have argued that Jamaica’s economy has some peculiarities that mean that it would not work as expected. But it is also the case that social and political considerations have not allowed exchange rate changes to work as they should. This is a big subject.

    Tourism has worked by isolating the sector from much of the country. This is a plus and a minus.

    As regards my accent. I have to laugh. When Oliver Samuels put on his show at Sherbourne a few months ago, the cast had been asked to make the accents ‘more English’ so that Bajans could understand better. We are encouraged to master standard English and some argue that the sky is tumpling if they hear Patois spoken freely. I really dont need to speak in a Jamaican accent only to have to repeat or have subtitles flowing on the screen. If what I say is not clear then that’s a different issue.

    But if it makes you happy, I can write in Patois or in standard English with the caption ‘Please read with a Jamaican accent’.

  32. donald duck esq Avatar
    donald duck esq

    What is worrying is that we are hearing nothing from the Minister of Finance or his Minister of state on the matter. As we are in a dire position, it is incumbent on them to come up with a solution. Time is running out for us. If we have to cut and contrive then so be it. Inaction is worst than taking any action to remedy the situation we find ourselves in.

    In the age of transparency, why not tell us what his council of economic advisers are telling the minister of finance. Why not tell us what the council on foreign exchange matters is doing. There is no point in burying ones head in the sand.

    Members of Cabinet need to remember that you were appointed to lead.

  33. Hopi Avatar
    Hopi

    @DJakaLIB……..Since that question is so asinine let me turn it on its head….What did the Europeans [including the US], want or get out of a relationship with African countries and qualitatively and quantitatively what did the Africans get in return?

  34. Adrian Hinds Avatar
    Adrian Hinds

    The Barbados Labour party is taking issues that occuring across all economies and presenting them to Barbadians as problems unique to Barbados with the government at fault. That is a big lie.

    The various presenters are not using obvious signs of bias to present their partisan commentry, they are relient on their accomplishments, their scholarly accolades and thropies while presented agruments that if believed without question would point the finger were it should not, and glorify those that cannot do better for simply saying that they could.

    But what are they saying?

    Take Persuad:
    According to him we should NOT take the word of congressman Henry Waxman Democrat from California who said 2008 that; “The story of the credit rating agencies is a story of colossal failure” —- somehow persuad has more information than the chairman of the House Oversight and Government Reform Committee.

    Rep. Waxman’s committee was at the time investigating the credit crisis and put much of the blame on those agencies such as Standard & Poor’s (S&P) and Moody’s for giving top ratings to securities backed by subprime mortgage loans.

    the committee released internal documents showing that executives of the rating agencies were “well aware that there was little basis for giving AAA ratings to thousands of increasingly complex mortgage-related securities but the companies often vouched for them anyway.”

    …..But the pragmatist will tell us that we must not assume that there could be any issues with the way these agencies rate countries and this is Persuad argument which he must assume so that he can use S&P to build his point.

    But what is his point? That a downgrade will make it harder for Barbados to borrow?

    Was it not difficult to borrow since 2007 given the lack of credit due to the BAD GLOBAL ECONOMY cause by the subprime/derivatives problems?

    as far back as 2005 had we not graduated from access to sources of concessional financing which meant that we were now largely on our own as the financiers of our development?

    How many commercial loans arrangement did the BLP enter into between 2005 -2008? where they local or international? If international why?

    What was the argument that the BLP used when a IMF consultation stated that the debt to GDP ratio was way too high?

    Did they not claim that it was maneagble because most of it was local?

    Again why was it local?

    “There is now an evolving climate of public opinion in this country in which
    it is difficult to sustain interest in serious but unexciting things, because of
    a growing preference for controversies for their own sake.”

    Could have been 2009, but the above were the words of Owen Arthur in 2005.

  35. Carson C. Cadogan Avatar
    Carson C. Cadogan

    ROK

    What slurs are you talking about?

    You all are giving too much credence to the Barbados Labour Party with their gloom and doom, it’s operatives and Denis Jones.

    The Democratic Labour Party is working assiduously in the interest of all Barbadians and Barbados in these tough economic times.

    It would do you well to attend constituency meetings.

  36. Dennis Jones (aka Living in Barbados) Avatar
    Dennis Jones (aka Living in Barbados)

    @Hopi, you have not turned the argument on its head. “The Europeans” wanted economic resources (mainly mineral) and strategic political influences (some of which was gained by building economic power based on controlling land and minerals and to a lesser extent people). Even in the form of one country, these Europeans were major political, economic, and/or military powers who weilded that power to gain much of what they wanted. Barbados certainly is not any of those things. What they wanted they could extract, often without negotiation; that Barbados cannot do. Put simply, Africa either as individual countries or as a continent was not capable of resisting or prepared to do so (with the one exception of Ethiopia). So, I still do not have an answer.

  37. Dennis Jones (aka Living in Barbados) Avatar
    Dennis Jones (aka Living in Barbados)

    @Carson C Cadogan, it’s useful to look holistically at most problems. So, it made interesting reading to see the views of Harvard Sports Management about the ‘challenges the company had faced bringing tours to Barbados’ (p3 on Nation, today, http://www.nationnews.com/print/tourism-workshop–ncaa-charge-on-B-dos-sport-tourism-copy-for-w). If that story is correct it tells you a great deal about the weak footing of one of key economic pillars.

    Now, some may accuse the Nation of bias. Some may say that the problem derives from a political party’s failing or some other systemic problem. I cannot say. The bottom line is the same, though. In a competitive environment, Barbados seems to be at risk of losing what is seen as ‘low hanging fruit’ for Caribbean tourist destinations, ie the business of sports teams from North America. Remember, the image is that the country is supposed to be good at attracting businesses.

  38. ROK Avatar
    ROK

    @CCC
    Man, I disappointed that you did not get the rhetoric in that post.

  39. David Avatar
    David

    Prime Minister David Thompson’s closing statement in parliament on a supplementary just voted made the following statrement concerning the recent downgrade in outlook from Standard & Poors:

    If Barbados has to take a step down to take 10 step up later so be it.

    It seems the PM is in the camp of Dr. Marshall and Mottley is inclined to go with Dr. Persaud.

    Let the discussion begin.

  40. Dennis Jones (aka Living in Barbados) Avatar
    Dennis Jones (aka Living in Barbados)

    @ROK/David, we debated (regarding BL&P hearings) how packaging messages so that most people can understand is a weakness, and I try to look at many different instances of how that is now being done. This may be of interest, http://www.number10.gov.uk/. It’s not meant to be off topic but may point to very different ways that governments choose to engage people in debate about policy matters. If a government is truly committed to openness and transparency should this not be the sort of thing that one would expect to have seen developed?

  41. Dennis Jones (aka Living in Barbados) Avatar
    Dennis Jones (aka Living in Barbados)

    @David, I heard the PM’s remarks too but I have no idea what it means. If Barbados cannot borrow from capital markets (and Trinidadians cannot be relied on to come to its aid each time), and if Barbados does not want to have a Fund program, and if it cannot get concessional financing from elsewhere, then there must be a clear plan to get the budget deficit under control, how otherwise the debt come down. It will be interesting in coming days to see if he is asked to flesh out his vision of the future that sits with the comment.

    I’ll take a back seat now.

  42. Trained Economist Avatar
    Trained Economist

    But surely, the statement that a loss of the investment grade means that Barbados cannot borrow internationally is a crude interpretation.

    The loss of the investment grade rating would mean that borrowing on the open capital markets will be restricted to a smaller pool of lenders and will be more expensive. How much more expensive is debatable? Non-investment grade borrowers can still raise capital on the private capital markets.

    Barbados can still borrow from mulitlateral bodies such as the IADB for example.

    The PM is wise to look at his options.

    If cutting the deficit to the required levels would mean an unemployment rate of 18% is that a good trade-off?

    Does Barbados need to borrow internationally for the next two to three years?

    Can you make the adjustments over time and recover the rating if it is in fact lost?

  43. love Avatar
    love

    Dennis Jones…..is a continuation of that era when imbeciles roamed the earth at will !

    He and all the other BLP miscreants now join this economic debate as though the events of 14 years of BLP mis – rule did not lay the weak foundation for what we are witnessing in Barbados’ economic condition today.

    How else can one refuse to ask…how come in times of plenty a BLP gov’t that claimed it was so superior could not finished a project on time and within BUDGET ?

    So the BLP policy was to spend without any thought of financial prudence and accountability.

    Since June 2008…check how many housing projects the DLP have completed and within budget and those soon to be completed.

    REMARKABLE housing achievements in Workhall, Marchfield, Greens, Four Hill…Country Park Towers, Stuart Lodge, Constant , Coverley.

    No wonder Owen Arthur and Mia Mottley are now at loggerheads !

  44. ROK Avatar
    ROK

    In Jamaica there was a saying: “Busta sow and Manley reap”. Or was it the other way around?

    Well in Barbados, the DLP build up and the BLP liquidate. Maybe there needs to be a balance where there is both inflow and outflow but then there would be no need to change that party if it has balance.

    So, five years of drought and then five years of wheat.

  45. Adrian Hinds Avatar
    Adrian Hinds

    @ROK
    I long for the day you put up a thread to discuss Jamaica and throw away that phoney UK accent.
    ==========================

    Are you asking a person to throw away their only indentity?
    man you just jealous. lol!

  46. Dennis Jones (aka Living in Barbados) Avatar
    Dennis Jones (aka Living in Barbados)

    @Trained Economist, Your comments offer an excellent summary (including the points about trade offs). I hope I did not give the impression that Barbados would not be able to borrow. Even with ‘junk’ status, the country could borrow, and there are lenders (often called ‘vulture funds’) who specialise in financing borrowers in that situation. The problems only become apparent as and when a country needs to go to market for loans. China may decide that it can be a ‘white knight’.

    I think that IADB loans (which are on commercial terms) need to be linked to specific projects, and is not available for general financing (ie to be used for any government spending).

    Ratings should reflect current and future prospects, so as the PM said going down does not preclude coming back up. But the essence of that process is that the country’s overall economic situation and the policies underlying this needs to have improved sufficiently to warrant upgrades.

  47. Adrian Hinds Avatar
    Adrian Hinds

    so what is the desaster that persuad speaks of?

  48. Crusoe Avatar
    Crusoe

    ”Senior Fellow at UWI Sir Arthur Lewis Institute Dr. Don Marshall who believes Barbados should seize the opportunity to find creative ways to reduce government spending and enable the environment to encourage entrepreneurial projects to lead growth by expanding exports”

    Most relevant few lines to this topic anywhere.

    Exports, in whatever form, whether tourism, offshore,clothing, rum, food products, music, are the KEY to foreign exchange earning.

    That is the only real tough issue.

    The second important but no so tough is the reduction in Gov’t spending, while increasing revenue, to reduce local Gov’t debt but still ensure that social programmes and necessary social infrastructure remains.

    Hence, the talk of increasing the tax net by IMF and Gov’t (think it was them).

    So, next year will see an increase in VAT, certain other taxes being imposed, such as capital gains tax on properties and shares as well as reduction in specific, non-essential Gov’t areas.

    High impetus and assistance to foreign exchange earning industry will also be driven like never before.

  49. Crusoe Avatar
    Crusoe

    As moentioned above, it would appear that the Gov’t is keeping a revenue ‘ace in the sleeve’ till the last i.e. VAT increase.

    This increase can be used to balance the local budget /debt serviving.

    I would strongly advise against rampant borrowing /spending however.

    What is more horrifying to me, is that I am NOT confident nor hopeful that the international Gov’ts have a handle on the economic situation as yet.

    Certainly, it would appear that thus far a wonderful job has been done to prevent a sudden ‘crash and burn’.

    Nevertheless, I am concerned that the situation is far from over, the world drivers have left the fuelstation and have just entered first gear, still another long set of miles to go to the destination i.e. true stability.

    Next year will not be easy for us here, but neither will it be a bed of roses internationally, anyone who thinks that will be foolhardy.

    We have a long haul ahead and remember that what got Barbados this far was not any fancy stuff, just prudent management and conservative spending.

  50. Avatar
    Anonymous

    Dennis jones just went on Starcom’s ‘Tell it like it is and talk a pile of jobby.

    Nobody at all listening to he nor avinash persaud except VOB.

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