Do You Believe The Local Economy Grew 0.3%?

Submitted by People’s Democratic Congress (PDC)


Chris Sinckler, Minister of Finance

Recently, this DLP Government made it known to the people of Barbados that the economy of Barbados grew by 0.3% in 2010. But, what a patently false and objectionable noesis this has been!! What is worse too is that the 2010 Annual Economic Review states that for this same period –  2010 – the economy contracted by 0.4%. What we in the PDC firmly believe, however, is that the economy contracted by about  3.1% in real terms.

How certain sections of the local media like VOB, the Nation Newspaper, CBC, could have appeared to have unquestionably uncritically accepted that there was this level of recovery in the material production and distribution and financial affairs of this country has also got us totally bemused.

Even the former  Minister of State in the Ministry of Finance under the last BLP Government, Mr. Clyde Mascoll, has had us in the PDC very dumbfounded with his wishy-washy, anaemic type of response to this notion that the Barbados economy grew by 0.3% in 2010. Part of Mr. Mascoll’s response was that that amount of growth was not even enough to deal with the problems posed by the fiscal deficit – which was around 8.8% of GDP, according to the same 2010 review.

A look at the said review would indicate that the local tourism sector grew by 3% – from the start of January 2010 to November 2010 – when compared with the previous year. This 3 % growth equates with a mere BDS $ 36 million in a BDS  $ 1.2 billion  tourism sector, and contrasts with a 8.8% decline in 2009 (See Tourism Arrival chart in said annual economic review 2010 for this 8.8 % decline – Strangely enough in the traded sector performance table in the 2010 annual economic review, the figure is 6.6%, and in the Economic Survey of Latin America and the Caribbean 2009-2010, this same 6.6% decline in tourism in Barbados is referred to – so what piece of information is correct?). Anyhow, this 8.8% decline translates into a BDS $ 105 million loss in real tourism activity for 2009.

Thus, it goes without saying that it would have taken over BDS $ 140 million in tourism value added to have clearly arrived from the point of supposed depressed tourism activity at the start of 2009, right through/up to the point of growth at the end of 2010, the point where the country’s tourism sector was said by this ram shackled DLP government to have been growing at more than 3%.

Clearly the logical spin offs ( even to the extent of 1/4 of that BDS $ 140 million amount) from this NON-EXISTENT FICTITIOUS growth are at this stage not being seen, felt or heard in terms of  real contributions to reversals in the declines and stagnations found within the retail, wholesale and distribution, manufacturing, agricultural, construction and financial sectors of the country.

So, therefore the government is LYING that there was a 0.3% growth in the economy last year!!!!

Moreso, a look at the 2009 review of the so-called Barbados economy showed that the economy contracted by 4.8% – we believe it to be more in the region of 6 %. Therefore, the Barbados economy lost about BDS $ 360 million in real economic activity for that period. The said review 2010 – Table 1 – Main Economic Indicators – shows that in 2010, real GDP declined by 0.4 percent – which translates to a BDS $ 32 million dollars loss to economy activity in the country in the said 2010.  But these latter figures are really compounded by the recent false notion that economy grew by 0.3%. Thus, in so far as taking the latter into consideration, there would have had to be a reversal with regard to that extent of decline to the tune of at least BDS $ 400 million worth in total value added produced across Barbados, enough to realize any growth coming about in the economy.

According to the review 2010, the only other major sector other than tourism that grew was transport. So, again, there was NO WAY, NO  WAY whatsoever  that tourism could have produced near BDS $ 400 million in value added sufficient to simply arrest the decline in those other sectors and furthermore to replace the value added (over $ 100 million ) that was likely produced in the tourism sector in Barbados.

Finally, it is clear from particulars contained in the 2010 review that the high cost of importation/exportation, the alarming costs of living and doing business, TAXATION, and the high costs of government borrowing and amortisation in Barbados, among other relevant variables, have since the mid 2005 helped to keep this so-called Barbados economy in depression, and have helped to keep unemployment on the rise. In the case of each of those category of costs there have been increases far more than the 3% growth that has been said to have been realized in tourism in 2010, and the 0.3% that was lyingly said to have been achieved in the economy then.

Surely, the government must stop DAMN LYING about the performance of this economy.

(NB February has come and gone and Four Seasons has not restarted as Professor Persaud had said it would).

0 thoughts on “Do You Believe The Local Economy Grew 0.3%?


  1. a lot of your comments make sense but sometimes lose their sting when you try to preach your socialist type mumba jumbo which will never see the light of day in barbados. we in barbados do have our shortcomings and over the years has lost our sense of reasoning in our support for the tweo traditional political parties but at least we recognise that we have a short life here on this earth to enjoy and live meaningfully and we are not going to subscribe to any ideology fascist, communist, socialist that encroach on our freedoms of expression and travel such as is the case of cuba, iraq, iran, egypt or anywhere else. i would not be suprised if the wave of protests sweeeping the arab world hit cuba too but of course the use of the internet is controlled there too. but you are rigt in your analysis, the government has no answers so they are going to foster lies down the throats of their gullible supportes aided and abetted by a compliant media partisan to whoever is in power.


  2. gdp growth normally is calculated via constant prices. given the levels of suggested growth and the decrease in the fiscal deficit I don’t think that was taken into consideration. We await the governors revised report on march 21 to see if he will contradict chris.


  3. Maybe everyone including the PDC will have to get accustomed to the idea that the days of growth are rapidly coming to an end, i.e. the world is reaching the point where it is becoming self-evident infinite growth in a finite system cannot go on for ever despite whatever economic mumbo-jumbo is used to tell us it can and it must.

    You can be sure that if we can’t arrange our lives and economies to exist within nature’s limits ourselves, nature will at some point make the necessary arrangements for us to do so without any intervention on our part.

    Where we are headed: Peak oil and the financial crisis

    Posted by Gail the Actuary on March 25, 2009

    Our economy is very much a one way economy–because of its heavy reliance on debt, it needs to grow.

    It is easy to overlook the importance of debt. Most businesses would not be able to build new factories without debt. Businesses would tend to be much smaller than they are today without debt. International trade would be much more difficult without debt. Even at a personal level, debt is very important. How many citizens would be able to purchase homes without a mortgage, or go to college without a student loan?

    In order for our debt-based system to work as planned, the economy needs to grow. Otherwise, there are way too many defaults.

    In a growing economy, many debtors find that their financial situation has improved by the time it becomes necessary to pay back the loan. Even though it is necessary to pay back the loan plus interest, the debtor still has plenty of funds left over for other things, because of the growth of the economy, and his or her improved circumstances.

    The reverse is true in a shrinking economy. When the time comes to repay the loan, many debtors find that they have been laid off or their incomes have declined. Repaying the debt becomes much more difficult. Default rates rise. Those who do repay debt often find they do not have funds left for all of their other obligations.

    snip

    There is an academic paper called This Time is Different: A Panoramic View of Eight Centuries of Financial Crises. The paper finds that throughout history, government defaults on debt have occurred very frequently. The paper notes (page 15):

    It is notable that the non-defaulters, by and large, are all hugely successful growth stories.

    This is precisely the effect we would expect. When economies of countries are able to grow rapidy, they can repay their debt with interest. But as growth wanes, it becomes much more difficult to repay debt, and many more defaults occur.

    Our debt-based financial system needs growth to continue. It is not a Ponzi scheme, but it has the same problem with not being sustainable without growth. The inability of the financial system to continue without growth becomes a separate risk factor to the economy, greatly magnifying the effect of even a slight long-term slowdown. The need for growth is the reason why Bernanke and Geithner are working so hard to get the economy to grow again.

    If all of the raw materials we need continue to grow rapidly, then there is a chance the growth paradigm can continue. But increasingly, this is not the case. A major stumbling block is cheap energy:

    The Energy Stumbling Block:

    * Cheap Energy has helped fueled our current system
    * Cheap Energy keeps our factories buzzing
    * Cheap Energy keeps our cars running
    * Cheap Energy leaves consumers with enough money that they can repay their mortgages
    * Cheap Energy permits globalization
    (* Cheap Energy permits mass tourism, Green Monkey’s own Addition to the list)

    We live in a finite world. Cheap energy can’t go on forever. Eventually it runs out, and we have to move on to expensive energy. This is precisely what has been happening, for both oil and natural gas.

    snip

    This financial crisis is precisely what many of us had forecast would be the outcome of peak oil, because resources need to be level to increasing in order for the economy to keep growing. (One can disguise the lack of growth for a time by expanding credit, and Greenspan used precisely that approach in the early 2000s.) Once available resources start declining, growth begins to decline, debt defaults start rising, and soon after that, credit availability starts to decline.

    snip

    All of these problems lead us to the current financial crisis, caused by trying to continually expand our economy in a finite world. Lack of low-priced oil was a major limiting factor. Even if we had managed to get past the need for low-priced oil, there were other limits as well that we were reaching, like fresh water and cheap natural gas. I won’t be able to talk much about these today, but these limits would also tend to have the same impact on a financial system that requires growth–cause massive debt unwind, and possible collapse of the system.

    Read the complete presentation here:
    http://www.theoildrum.com/node/5230

    Center for the Advancement of the Steady State Economy

    FAQs

    Why is economic growth a threat to economic sustainability, national security, and international stability?

    To grow, an economy requires more natural capital, including soil, water, minerals, timber, other raw materials, and energy sources. When the economy grows too fast or gets too big, this natural capital is depleted, or “liquidated.” To function smoothly, the economy also requires an environment that can absorb and recycle pollutants. When natural capital stocks are depleted, and/or the capacity of the environment to absorb pollutants is exceeded, the economy is forced to shrink.

    National security, meanwhile, is a function of economic sustainability. The economic strife of a nation may result in insurrection or revolution, and eventually the nation may turn its agressions outward. From the Nazi doctrine of Lebensraum to the 21st century powder kegs, war invariably involves, and often revolves around, struggles for resources by nations that have exceeded their ecological capacities – or have had their capacities impacted by other nations.

    More FAQs about economic growth and steady state economies at: http://steadystate.org/discover/faqs/


  4. The former Govenor of the Central Bank Sir Courtney Blackman has basically slapped down the minister’s boast by saying the 0.3% is within the margin of error. I am sure that the technocrats in the ministry must know this age old fact so my question is doesn’t the minister take advice from his experts before going to the press or is it that he is a know-it-all.
    Why run to press with such information I certainly would not because if my employer had given me an increase of 0.3% increase on my salary of $5,000.00 that translates into $15.00. So why the big song and dance ?


  5. CABLE & WIRELESS BERMUDA has been sold to a Canadian company.
    The Bragg Group has purchased the Bermuda operations of C&W Communications Plc. (CWC) for US$70 million.


  6. Hants
    Why would you weant to change the subject? maybe becauase it’s not to your liking? The reality is that it is good to know that it has grown but that is doubtful but even if it did 0.3% is nothing to write home and tell your mother about.


  7. Say what you want the GDP graph which shows real growth on the Central Bank website is trending North which is where you want to be. Perhaps that’s the big picture take?


    • @anthony

      You must yield to the point that growth in an economy like Barbados is externally driven in the main. If key source markets i.e. USA, UK are struggling that immediately impacts tourism and FDI.


    • @anthony

      Agree with you but anyone who understands the workings of the civil service knows that to wrok around uncooperative Permanent Secretaries is practically impossibly, ask Haynesley Benn.

      It seems any government who wants to bring the portal/e-commerce setup you want will have to wait for some of the dinosaurs to retire.

      Sad but true.


  8. Indeed we all want growth. growth fuel jobs and stable work hours. growth also would by in part reduce the government deficient. growth help to increase the standard of living cross the board. We all want growth especially the kind see impacting daily lives.


  9. The Scout wrote “HantsWhy would you weant to change the subject?”

    There is no obligation to write what according to the subject. When rules are imposed on blogs then I will either follow them or quit blogging.

    @David since I don’t have to read and spell for you, I know you have already made the “connection”. Canadian company- BL&PH.
    Canadian company_ C&W Bermuda.
    Pattern redeveloping.
    Canadian companies flush with cash are “hunting in the Caribbean.”


  10. indeed david but as hants illustrates the Canadian market is flush with cash. not to mention the increase buying power of the Canadian dollar which has risen over the us dollar. maybe we should stop trying to do the same thing as always and focus more where we might better get bigger returns for now. I guess we can attribute this the governments normal bureaucracy and non willing to change to suit market demand or innovations. When will we have a proper government portal working. when will the government embrace e-commerce they are always sprouting about. As you suggested in the past it probably stalled by permanent secretaries but if the ministers doesn’t put pressure to force it in then we will never get anywhere.


  11. http://www.nationnews.com/articles/view/60m-drop/

    This does bring a question to ask. Shouldn’t the bl&p share sale which had payment due to owner on jan 31 inject 80 million us/cad into the foreign exchange reserves? So why hasn’t it been taken into account as yet ? the money had to pass thru central bank before getting to the shareholders via the exchange act. If it has been taken into account well 🙁 we have alot to worry about.


    • @anthony

      Are you assuming that foreign exchange made it to the Central Bank? Wouldn’t a bank have acted as an intermediary? Could it that the funds made it to the banking system but not the Central Bank?


  12. @David

    So your suggesting the bank took the 160 million from assets deposited at it to pay the shareholders and didn’t give it in the 80 million us/cad to the cbb ? I hope you see the folly in your statement there. If someone sent you wire transferee to pay a bill here in us you get bajan and bank send the wire credits to cbb to be reimbursed. Same as this deposit.


  13. @anthony

    Help BU to understand. If Emera bought Barbados Dollars and paid CAD/USD to a bank or banks in Barbados and those banks had the BDS available in their accounts what is the obligation of the bank to the CBB in the transaction?


  14. The final caller on VOB Brasstacks today, bitterly, but boldly declared that “Clyde Mascoll was one of the ones who allowed the last Government to SPEND $700 MILLION ON A PRISON !!!”

    I believe the correct amount SPENT was approx. $230 Million to ensure the continuance of a safe and secure Barbados.

    Moderator “Now-More-PHONY-Than-Ever” Marshall, after desparately trying with great futility to foil and confuse the enormously valuable explanations of Clyde Mascoll, who was online speaking inter alia, on the subjects of Tourism and foreign reserves, gleefully allowed that final caller to get away with the stupid, lying remark, that the last Government had SPENT $700 MILLION on the new prison!!!

    The least you could have done Phony, was to ask the man your standard question to BLP Callers, “For the benefit of the Public, would you provide the evidence to support that misleading statement?”


  15. Thank you Mr.Mascoll, for your erudite contribution. Keep on teaching the public and demystifying these sometimes complex and technically difficult subjects. No guile, and no spin, like the Central Bank Governor. Just plain facts and common sense …. and poor Marshall trying his best to make you look like you don’t know what you are saying and to embarrass you in public!


  16. BU agrees with Mascoll’s position. The payment for Dodds is not an unexpected item, it was paid last January. Given the increase tourist arrivals Jan 11 over Jan 10 Minister Sinckler is not being transparent in his rebuttal to Mascoll.


  17. BU. what utter rubbish. Who says that the payment is a surprise. That is not the issue. Of course the payment exists every body knows that. But that those does mean that it does not have to be paid.

    What it means is that the Minister of Finance and by extension the public of Barbados have to fork out 30 million every January. Now unless something spectacular happens in January, that will cause a spike in Foreign Exchange earnings in that month, then the additional burden of carry that 30 million payment will stick in our crows and more likely than not reflect itself in a decline in the reserves.

    So what was Mascoll’s point? Mr. Marshall asked him a simple question: would the reserves position had been the same if the payments not been made? his response ” oh that is a red herring” Yes it is a red herring……a 30 million dollar red herring.

    What is not being transparent about what the Minister of Finance said. Did he hide the fact that the reserves feel. NO. Did he hide the fact that Tourism spend is NO. Did he not give an explanation for where most of the money that was drained from the foreign reserves went to do YES. And can his statement that arrivals in January cannot show up corresponding receipt in January, be disproved by you or Mr. Mascoll? absolutely not. So what is your point BU.

    Put on yuh thinking cap. Think for yuhself for once nuh.

    The problem BU is that you guys get caught up with a lot of economics hoopla and jargon and allow other people to do your thinking for you.

    Mascoll made a fool of himself on radio once again because he his too arrogant and self consumed and angry to be able to make sense of anything. And what he is now displaying is this sick desire to see Barbados do badly just so he can be proven to be right. He was wrong in the past, is wrong now will continue to be wrong so long as he utterances are consumed more by his self adulation than any genuine desire to help Barbados.

    BU, please feel free to join the nonsense.


  18. Well to give some relevance to the situation.
    In 2006 dec to jan 2007 there was increase in fx reserve by 12 million . in 2007/2008 there was a decrease of 13 million this was start of recession and the first 30 million bds payment. In 2008/2009 there was a decrease of 46 million at the height of recession. In 2009/2010 there was a decrease of 26 million. So expectantly one would expect a decrease in the range of 30-20 million. Given tourism higher number even less decrease. So a 60 million decrease kinda light up and screams something the matter here when you look @ reports.

    And yes his statement the January receipts can’t be report in January is true but aren’t we not march ? One would expect some good estimates of the numbers by now. took the government a month to expound and declare it wasn’t -0.4% but 0.3% we still out on if it really is 0.3%. But that a margin of a percentage point. We can all hope for them finding another 30-40 million in receipts but how likely is that ?

    In other word the question are valid and something does quite add back up now.


  19. Mia Mottley, is suggesting that Barbadians use social media as an avenue to bring about change.

    tot she did want to ban bloggin wen she did a minista.


    • @Anthony

      Good response to Little Angel, still waiting on the response to the bank transfer issue.


  20. @hants

    Not now she see how useful blogging is in assassinating OSA Character While she stay in the background and lap it all up!


  21. @david Sorry for the delay

    The process for payment of shares must be approve via the exchange act 8 (b) by the central bank. Part of that authority in the exchange act can be used to make entities surrender foreign deposits. Given the position of the foreign reserves i would think they would like to shore them up even more with influx of foreign captial that came in.

    of course this assume that central bank wanted to foreign exchange. If they didn’t then your scenario could have very well played out, but i think one of the reason the government wasn’t against the sales was they wanted the foreign exchange for the reserves. We can see the result when they do the final annual report and put up the preliminary on-line statistic for year.


  22. I believe the correct amount SPENT was approx. $230 Million to ensure the continuance of a safe and secure Barbados
    ———————–
    Correct – how often this stupid contraversy over the prison comes up what would some have -prisoners shackled to palm tree?


  23. “Barbados is on course for a slow recovery in the short term. That’s the prediction of the island’s six month old early economic warning system, which is managed by the the Economic Affairs Division of the Ministry of Finance and Economic Affairs. In their latest analysis, officials said, based on the key indicators for the period October to December 2010, things were looking up. Preliminary estimates suggest that the Leading Economic Index increased by a margin of 0.1 per cent, the Coincident Economic Index increased by 1.1 per cent, the Lagging Economic Index decreased by 0.4 per cent,” the report said. “The LEI (which one?) constitute the key factors officials are using to determine the future economic performance of the economy. It’s components include the average lending rates, durable consumer imports, the labour force, long stay arrivals, the money supply, oil prices, real GDP in the Unites States and United Kingdom, and the Treasury Bill Rate.” – Taken from a news story captioned: slow recovery expected, in Barbados Today, 3 March, 2011. For more on that news story see the said edition.

    It is clear again to the average social critic that the Government is still proceeding to use false misleading information to hoodwink many people in Barbados into believing that material and financial recovery is really happening in the Barbados economy, when in truth and in fact it is not happening at all.

    Here are three reasons why this joke ossie moore DLP Government is again found to be lying about the current performance of the Barbados economy.

    1) The said economic warning system that has been referred to in the Barbados Today news story was set up for purposes of the then Ministry of Economic Affairs analysing interpreting economic and financial data and information available to the government during the current economic crisis – and NOT BEFORE OR AFTER SUCH A CRISIS.

    See the following part of a news article that was taken from CFI HAITI, for support for this view – BRIDGETOWN, Barbados, February 11, 2009 – Barbados is looking into implementing an early warning system to track the economic performance in the tourism industry, international business and other vital income-generating sectors.

    The proposal has been revealed by Minister of Economic Affairs and Empowerment, Innovation, Trade, Industry and Commerce Dr David Estwick.

    “With the economic crisis unfolding worldwide, we have to be able to track the magnitude of its impact and the rate of change of that magnitude of the impact on the sectors that we depend on. So, we need to be able to track what is happening, for example, to bookings at a hotel, airlift capacity and the number of tourists passing through the airport,” he said.

    “This would give government an idea as to how the tourism product is being affected by the international crisis. By doing this, it would allow us to put pre-emptive structures in place to mitigate the impact on our foreign reserves earnings.”

    To facilitate the monitoring system, the Minister said the necessary Information Communication Technology (ICT) base was being developed to allow officials to track macro-economic information. The system would also be linked to the Automated System for Customs Data (ASYCUDA) currently used by the Customs and Excise Department and the hotel sector’s computer systems.”

    Therefore, by this so-called early warning system having been set up in this depression – which has largely been created by the former BLP Government and the current DLP Government and the financial sector – it dangerously ignores pointing to those variables ( TAXATION, INTEREST RATES ( not just average lending rates), REPAYABLE LOANS FOR PRODUCTIVE PURPOSES, FISCAL DEFICIT, GOVERNMENT BORROWING/REPAYMENTS, GOVERNMENT EXPENDITURE, ETC) that have fundamentally helped – in their very negative behaviour – to create this depression in Barbados, while including some that are too weak to be included – Real GDP of US and UK, AVERAGE LENDING RATES.

    It is very intellectually biassed and partial against some variables that really must indicate whether or not recovery is taking place in Barbados – PRIVATE INVESTMENT (local and foreign), PRODUCER/MANUFACTURER CONFIDENCE/OUTPUT, BUILDING CONTRACTOR CONFIDENCE/OUTPUT, CONSUMER SPENDING, ETC., Clearly these variables are not performing very well at this stage in Barbados.

    2) The so-called Barbados economy is operating at a level whereby there is a lack of underutilized capacity in terms of labour – there is still too much labour being used in the same way as before in too many of the same conditions wherefore national output has been falling, purchases are declining and per unit operating costs increasing in Barbados, generally. Without serious reductions in the so-called labour force in the public and private sectors to help bring about downward adjustments to the operating costs of government business enterprises there will be no recovery at this stage. Furthermore, there will be no growth unless investment and business costs are brought down substantially. Were there substantial unemployment in the country, and were there the creation of sufficient new private sector business enterprises to assist in the production of greater value added, it would have been clear by now that prospects for recovery under this current economic system would have been present. National output will only be raised when substantial underutilized capacity is used up by a substantial amount of new businesses that are created or by old ones that are expanded or by the restructuring/repositioning of enterprises and their relationships with other enterprises in given household business sectors. Therefore, this DLP Government cannot reasonably state that recovery is taking place when actual employment/operational business costs across the country are rising substantially and when there is no national income sufficient to properly purchase the amount of output produced, far less to invest in and expand income generating opportunities in the country. The USA with substantial unemployment lower production costs is in a far better position to recover so-called economically than Barbados.

    3) There is no growth taking place in this economy simply because there has been no national growth strategy to provide for any national growth or, say, national recovery. In this context, this DLP Government has only a wicked strategy to make things worse so-called economically via increases in TAXATION, increases in fuel prices, and in helping to dramatically increase the costs of living and doing business in this country, while at the same time general purchases and income in the country decline.

    So, there you go.

    PDC


  24. Anthony
    You seem to be a very enlightened person who can dissect the intricacies of our economic problems.
    I am hypothetically putting you in charge of the Ministry Of Finance for this year. I want you to put forward two strategies which could make the Barbados economy grow outside of depending on tourism receipts.
    I heard on the news today that Suriname economy will grow by 5% this year because of their increase revenue from gold, oil and alumina.
    America economy is struggling so as the UK, therefore we are between a rock and a hard place to see the kinds of growth we were seeing in the past because WE DO NOT HAVE THOSE RESOURCES.
    I am getting the feeling that most persons who support the BLP blindly are terrified that Barbados can have any growth at all in these harsh economic times in the WORLD.
    Do you want to hear that the economy decrease by two percent or twenty percent? This is your country and BLP or DLP have no control of what is happening globally.
    THERE IS NO MORE PONZI MONEY TO BUY LAND AND CONDOS TO SWELL UP OUR FDI. So selling the land to this highest bidder is not going to work in the future.


  25. Charlie most of the developing world has been experiencing growth over the last year. It not we don’t want there to be growth it just if you do nothing how do expect there to be growth until the markets recover. We expect to be in growth already since mid last year but there is no action or direction from government other than to tax the people

    . 1 Kill the bulk sugar. It make no profits. rebrand all as muscavdo gold and ship to various markets.

    2 Kick start back our sea island cotton industry. It was consider some of best cotton in the world but been left abandon over past few years. cotton prices have double over last year


  26. I am not an economist and therefore may not be able to debate with you the finer points of why we are not experiencing growth like the other countries.
    But is economic growth not primarily driven by improvements in productivity, which involves producing more goods and services with the same inputs of labor, capital, energy and materials?
    If that is so, I do not think that your two suggestions will solve our problem?
    I still support those two initiatives because we should by now be selling our own special sugars and producing our own garments from our cotton.
    The wage bill and input costs makes us very uncompetitive in producing most of our goods and services.
    Can we get them down?
    One further question
    Why do governments increase taxes?


  27. @Charlie
    BLP & DLP have no control over what is happening globally. Famers hav eno contorl over the weather, and ship captians hav eno control ove rthe seas. But the duty of both is to estbalish a se tof reposnses that minise impact, conserve produce/cargo and manouevre through to reduce losses. The more able and competent the captian and crew, the farmer and labourers the sooner things are brought to normal or the less loss occurs for the duration of the challenge. Barbados has the misfortune to have at the helm the most unprepared and arrogant set of ‘wild boys’ Arthur’s words. Now I see them in action I have to agree, they are wreaking havoc albeit in ignorance in the economy. Well it is not we fault the Bees ain’t left no money, not sure what money they were expecting. I thought gov’ts levy taxes yearly. ‘Lord the mountain of debt killing us’, but add 1.5b in 2 years. Do something, do something, the people say. We ain’ doing nothing cause we want to be conservative with the people’s money (2 years later 1.5b in more debt and just went back to Parliament for more). Misguided spending – 22m for polyclinic for 8000 people, but 6m for tourism which directly affects 20,000 people and indirectly 270,000.


    • @Anthony

      For the same reason we can’t compete because of high production cost can’t the same thing be said that others can do what you are suggesting better as well?

      fyi

      Barbadians will be paying slightly more for petroleum products in the next few days. Effective midnight, Sunday, March 6, the retail price of gasoline will increase from $2.95 to $2.96 per litre.  The price of diesel will increase by nine cents from $2.53 per litre to $2.62 per litre, while the retail price of kerosene will be $1.74 per litre – an increase of 11 cents.


  28. Not necessary more good and services. By that definition it merely reduces us and everyone else to only mass production. We cann’t win via any mass production route due to high min wage ( in comparison to china ,malaysia, brazil,mexico etc ) They will always be able to bid lower and make a profit still. What we as small island must do is recognise that we can’t compete via the mass production. we must go for high quality good and services. With high quality you can charge a premium . A gold rolex vs a gold citizen watch have mostly the same parts but rolex you can charge 10-20 times the price of citizen. it all about brand name equating extra quality that you pay for. Now rolex would make way less watch than citizen but the profit from one watch would be equal to profit of x of amount of watches from citizen. So that model we must follow. So we need to brand our sugar that equates it to high quality and so too the local cotton industry, We want that if fashion house want cotton that they flock her to outbid each other in getting out cotton because it the best. So to it must be for service companies. We not the cheapest but we are the best. People pay extra for the best.

    Your suggestion that it doesn’t grow the economy isn’t true any little increase in service or goods is growth in economy so they will grow it.

    the short answer why governments increase taxes is because they need more revenue balance expenditure. Now the expenditure can be balance three ways. more revenue via taxes or government borrowing to pay off the excess expenditure and finally government lower expenditure. Now 3 method would mean the government need to streamline operations since we don’t want any cuts in employment. Don’t know if they did all the streamlining they could but they did so some. No2 been using for the current account deficient. It also been use to sure up the foreign reserves by 270 us million in 2009 and 100 us million in 2010. no1 been used in 2008 & 2010 budget to get more balanced budget it yet to be seen if the 2010 will be as effective in generating revenues as government hopes.

    The first year while not bad did not generate much confidence in government the second year i think i think the defining moment was when they let four season close. As the biggest project going on it injected massive amount of foreign exchange and employment and taxation for government. They should have never let it close down as long as it did. that of course is my opinion. But i think that was when the economy truly fell apart.


  29. @david

    It possible for anyone to go for both end of the market but few do. one of the points of making a high quality product is that you always make supply less than demand so as not to flood the market. It the only strategy I can see working that we can do that will make people will want products from here. If anyone else can suggest something I have overlooked they are welcome to do so.


  30. David,Anthony and Hants,c’mon guys i thought you all were awake,the Rothschild’s along with the Elite families are crashing all world economies,hell the people put the info on Youtube for you to break it down for yourselves and in news articles,can’t you see what is going on in the middle east?As far as foreign companies going into countries and buying up all the banks,gas stations,water companies,electric companies this is part of the peoples plan to control “EVERYTHING”,so expect Barbados to follow suit,we signed agreements with the IMF right?,who you all think OWN the IMF and that nice building down town called the Central Bank?


  31. Freewilly:
    Thanks for reminding Bajans that our very own Central Bank is in fact owned by Rothschild.
    As are the great majority of the world’s Central Banks.


  32. Straighttalk..i won’t lie to you,i am so far ahead of the average Bajan on certain subjects it ain’t funny,some i won’t discuss because of the secretive world we live in and the fact that so many people are still sleeping,but i will say this,no politician in Barbados can save this economy because they all follow orders from up high on the international scene and because of greed Bajans have and will be sent further down the river because of politics and greedy politicians..past and present.


  33. It does not matter how much money the elites have at the end of the day, freedom will win out. The flow and development of consciousness in the universe is unstoppable. As for the greedy they are already dead, for the greedy are never content and are their own personal damnation. In the very midst of salvation they are lost. To its terminal extent greed is the great devourer and once there is none else to consume, invariable turns upon itself, it is then revealed as one of the paths towards nihilism.

    Humanities darkest nights have always preceded it’s greatest dawns. Try to understand the shifts in consciousness for they always occur before a change in material reality, no matter how grim that material reality may be, it does not reign over consciousness.

    At the heart of the “economic” problem is a moral problem. Are the relationships that currently exists between areas of our economy consistent with the goal of growth and development? Where in nature have you seen a host thrive in a parasitic relationship? Which of the following areas of our economy match the terms below?

    Producers
    Consumers
    Scavengers
    Parasites
    N.B as with any categorization there will be overlap, and some areas that don’t quite fit into any of the above.

    What areas are feeding others, what areas are feeding on others, are they are symbiotic relationships? What/Who are the parasites? All the talk of growth of the economy is B.S, first change the moral paradigm and the economy will follow necessarily, not merely to multiply but to increase the joy.

    High praise for anthony’s contribution thus far:

    Barbados branded muscovado sugar (supreme quality+marketing genius = cocaine prices) it is a great idea

    Sea island cotton as well, combined with a thrust towards tourism and international fashion, high fashion…would yield profits.

    In the future we need diversity, not only does it mitigate risks
    (avoids all eggs in one basket scenario) but by combining industries and ideas were can create new products and services. Lots of growth opportunities post depression, if we prepare from now. In energy alone Wind,Solar and Tidal are all viable..

    On the issue of macroeconomics the world is in commodities and gold bull run of immense proportions, yet we have failed to capitalize on it…. truly a sad state of affairs.

    Twiddle dee and twiddle dum (Bs&Ds) have been given plenty of opportunity to govern. Now more than ever, it is time for bold ideas and new thinking….While the realm burns, do not be distracted by politics, be a part of solutions. No contribution is too small, no idea too crazy or different to be given a fair listen. Quit whining, complaining and just “bring it”. We have run out of time for silly partisan games…if you love anything other than self you would understand, it is a paradox to love family,community and country and be partisan. As citizens of this nation, free to determine our future, our politicians are to follow our collective will…for too long the tail has been wagging the dog.

    Remember Barbados is always Home


  34. yes the dlp might not have any control over how the world economy is managed but they certainly have control over the local economy is managed. yes, certain events globally will impact on us but this does not mean that the govt must lie down and play dead and continually pass the buck and hope for events to play out to their satisfaction. no, we do not pay them for that. this is when the tru mettle of a govt is tested when the wicket is playing badly not when it is good. we pay them to put on their thinking caps and introduce bold and innovative ideas to keep the ship from sinking. not to play politics with every comment levelled at their economic performance. sorry i have to sing the spiteful short man tune but his management of the economy over the past 14 years gives me the confidence that he and his advisers would have come up with something and public workers by now would chave been agitating for a bigger increase rather than none at all.


  35. Since no one has taken the bait, let me ask…. How can an economy where producers, whom are taxed to the heavens, to supply revenue for a government than generates very little of its own, ever grow?

    Government works best when it is lean and efficient, not when it enlarges itself feasting on the productive elements of a nation. Our version of socialism is morally bankrupt. Public workers are there to be CATALYSTS, the government earns its taxation only if it makes more growth and development possible. Public sector jobs should never be anywhere near the private sector in number….but should be far far less. Politics, nepotism and cronyism are draining this nation. Jobs as favours produces monstrous redundancy and the weight of this bureaucracy threatens to crush us all. The Government and public service is littered with the unimaginative, inhibited, insecure, cowardly and incompetent. The few shinning lights endure limitless frustration. The last administration 2003-2008 was very poor, but this one even poorer. It is not a DLP vs BLP issue, each successive government is getting worse.

    Playing politics will do solve our problems, think about your government, and what is best for Barbados, discuss these issues with family, friends etc… Pretend that the DLP and BLP does not exist, don’t be surprised to discover that nothing has changed in your life, you may even feel better.

    IGNORE the politicians, most are charlatans and fools, instead ask what kind of government does this country needs, and what you can do to get us there.

    N.B Our model of the civil service was designed in the interests of an Empire(Britain) it is epic idiocy to believe it would work for a small country in the era of globalization.

    Barbados is Home


  36. as side note

    Can anyone believe lerroy parris is suing clico for unpaid bonus. After pillaging the company, getting his investment out, getting the gold handshake he still wants more. Isn’t this the same man who pleaded and begged the policy holder not to sue clico. Guess they should done that from the start since he not following his own advice


  37. Surgery, radiation, chemotherapy……take your pick and let us be rid of this cancer. Greed knows no limits.


  38. to aod- i am a product of the civilservice where standard procedures albeit its shortcoming offered the opportunity for persons with requisite qualifications and i admit some without to enter the world of work and to progress where the circumstance arose and of an education system where interested boys and girls could go to sixth standard and hold their own intellectually anywhere in the world; so, i do not cry foul with the civil service or the education system of yore because as time passes, it is expected that changes would of neceesity occur. of course, some changes would be good and some might be bad. one such change that i believe would have done irreparable harm to the public service would be the changes arising out of the 1974 constitutional amendments which placed significant power in the recruitment of public workers in the hands of the political elite. the emasculation of the public service began with those amendments and it will continue so until they are repealed to prevent the blatant practice of nepotism by both political parties. justice must not only be done but seen to be done.


  39. AOD speaks as if the private sector in Barbados is over flowing with imagination, creativity and bravery and devoid of nepotism. STFU

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