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Review of Barbados' Economic Performance for the First Nine Months of 2012

Review of Barbados’ Economic Performance for the First Nine Months of 2012 (Text)

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Review of Barbados’ Economic Performance for the First Nine Months of 2012 (Text)

98 responses to “Review of Barbados' Economic Performance for the First Nine Months of 2012”

  1. Weston Avatar
    Weston

    The Governor seems to have missed the point on tourism when he blamed the lower UK arrivals on the cancellation of the second BA flight. That flight was cancelled BECAUSE BA were not selling the seats. UK tourists really need value for money now that they have less to spend and we all know that Barbados cannot compete with lower cost warm climate destinations, many of which also offer more idyllic scenery. At the same time, the importation of foreign currency by foreigners to buy real estate has slowed to a trickle while the international sector is hamstrung by increasing market regulation and huge frustrations over continued departmental delays in granting licences/permits/approvals. The recent haemaorrhaging of our reserves will continue until some tough decisions, and actions, are taken. At this rate we may only have a few months before we can add a foreign exchange crisis to the domestic government debt crisis which is already upon us. It’s tragic that this is all happening at election time when neither party feels able to adopt the unpopular policies which could protect our way of life.

  2. Adrian Loveridge Avatar
    Adrian Loveridge

    Weston,

    very good point. Not suprisingly, travellers (everywhere) are looking for value-for-money. Operational costs have increased so much on Barbados, its currently almost impossible to deliver this. Government has to take some of the blame. 16.6 per cent increase in VAT plus the windfall for Government created with increased VAT on higher fuel/electricity costs. 50 per cent increase in land taxes. And the extra costs in doing business like waiting over two years for VAT refunds.

  3. millertheanunnaki Avatar
    millertheanunnaki

    @ Weston | November 1, 2012 at 9:31 AM |

    We are singing from the same hymn sheet as far as visitor arrivals out of the UK are concerned. Much of BA’s customers who previously came to Barbados are now looking towards St. Lucia, and Cuba and even Jamaica. For the last 18 months many of BA’s flight to Barbados were suffering from poor load factors with many seats unsold.
    The Governor should stop blaming BA and the IMF and whomsoever he can identify like poor David Ellis at the recent press conference. Many of our problems lie right here with us and are of our own creation.

  4. Observing(...) Avatar
    Observing(…)

    @DAvid
    “BU remains sympathetic to the Governor’s view that we need to protect our forex reserves at all cost.

    but we are sticking with the strategy and still leaking forex without signs of requisite growth anywhere. That’s my worry. The holding pattern stops the bottom from falling out the bucket, but, over time dry rot will kick in.

    I agree Mascoll needs to show how increasing spend will help the economy while not depleting forex.

  5. David Avatar
    David

    @Observing (…)

    Have a fiscal policy which protects forex is agreed.

    The issue of possible forex leakage is another issue which needs to be investigated.

  6. Observing(...) Avatar
    Observing(…)

    @David

    not possible leakage david, it’s actually happening. Worrell’s explanation is low net capital inflows. The magic question is, what is being done proactively to increase capital inflows? If the answer is “waiting on new tourism projects” what does that mean in the interim as we lose 100 million forex here and 100 million forex there? The trend since 2007 has been downward.

    Another concern is the “only path” comment. Are there no other possibilities or combination of policies???

    Just observing

  7. David Avatar
    David

    @Observing (…)

    The point the Governor seems to have made is that to increase spend we need to increase forex inflows and or reduce expenditure. This is the theoretically framework decisions have to be made.

  8. Observing(...) Avatar
    Observing(…)

    k. Understood and agreed. So here comes the magic question.

    what are we doing to increase forex inflows?
    what are we doing to reduce expenditure?

    Just observing

  9. millertheanunnaki Avatar
    millertheanunnaki

    @ David:
    “what are we doing to increase forex inflows?
    what are we doing to reduce expenditure?”

    We are still awaiting your input. What do you have to put on the table other than say oil and food make up the bulk of our imports and the banning of the importation of cars will come to naught?
    So what is sacrosanct and what can be sacrificed to save us in the next 10 weeks of forex cover? October gone so: 14-10 = 10 weeks.

  10. millertheanunnaki Avatar
    millertheanunnaki

    @ millertheanunnaki | November 1, 2012 at 3:07 P

    “October gone so: 14-10 = 10 weeks.”
    should read: October gone so: 14-4 = 10 weeks.

  11. David Avatar
    David

    @Miller

    These are matters the BU family has discussed many times over. What does any household which encounters difficulty do? All members of the household have to tighten their belts. As a country there continue to be the expectation that lifestyle should not be adjusted. Both political parties continue to fool the people that the government is responsible for the current state, vote out the government and the problem is solved. A listen to Brassacks today confirms. We have to get individuals to appreciate the need to make sacrifices. Is it not Mascoll who preaches that an economy is made up of aggregate demand?

    Let both political parties begin from this position. Can they do it?

  12. Observing(...) Avatar
    Observing(…)

    Agreed! And leadership must come from examples! So, where has the government tightened its belt…without loosening ints pants lef that is?

    Also, in these times of ignorance, has anyone ever come to we the people and connected what they are doing nationally to what we need to do individually and show how together they would help the policy/economy?

    Just observing

  13. millertheanunnaki Avatar
    millertheanunnaki

    @ David | November 1, 2012 at 3:39 PM |

    Then let the political officials stop lying to the people and come clean. Stop fooling the people that everything is stabled and under control.
    Stop giving the people false hope that things will be OK tomorrow.
    Stop telling the people the government would ensure they have guaranteed jobs in the public sector.
    Why did Kellman lie to us by telling us exports increased by over 20% while the Governor is saying manufacturing did not contribute significantly to our forex earnings?

    When the government start making sacrifices like reducing the size of its Cabinet, curtail discretionary expenditure like futile CoI’s and competing football tournament that could have been paid from the Families First Account and all the eating up and drinking up of taxpayers money then we individuals would follow these exemplary decisions.

    This criticism applies to both political parties.

    So now let us hear what you have to offer in terms of specific proposals to rescue our forex position from pending disaster other than placing the blame on Bajan John Citizen.

  14. David Avatar
    David

    @Miller

    You understand the point and we are seeing your party continuing the myth by promising VAT rollback, return of allowances which we agree we’re illegal, subsidizing fuel etc.

  15. David Avatar
    David

    Observing (…)

    This is the honest conversation which both political parties must start BUT there is a general election to be fought.

  16. millertheanunnaki Avatar
    millertheanunnaki

    @ Derick Browne | November 1, 2012 at 4:16 PM |
    “I believe that the younger whites will have to shape up or ship out.”

    And what do you mean by that?
    Why don’t you look beyond your racist blinkers and see that whites except for a few well-known individuals are no longer in economic control of this country?
    This country economic wealth is controlled by transnational corporations, Trinidadians and local people of East Indian descent.

    Get over your plantation mentality and realise that “massa days done” as far as controlling the economic direction of this country. Sugar is dead and the importation and distribution of food and other goods is no longer the province of the local white oligarchy.

    Leave the young whites to their own self-destroying devices some of which you are quite familiar with including interbreeding and skin cancer causing activities. Where would you like them to go? To Ireland or Newcastle? What about the blacks going back to Ghana and Ivory Coast?

  17. David Avatar
    David

    @Miller

    Please ignore that comment he is the resident spammer.

  18. millertheanunnaki Avatar
    millertheanunnaki

    @ David | November 1, 2012 at 4:33 PM |

    And we are also witnessing the DLP purposely and deliberately lying to the people that there will be nor privatization or divestment if the DLP is returned to power. That all public sector jobs will be preserved under the DLP but 10,000 will be sent packing under the BLP.
    That the BLP would sell out the rest of the country to foreigners and put it in the hands of the IMF if the people were to elect the BLP.
    So who is fooling whom? Who is driving fear into the people instead of being honest and upfront with them, David?

  19. David Avatar
    David

    Amazing to here Ryan Straughn suggesting Barbados needs to ramp up manufacturing and agriculture for exports. Where were these people when Barbados economy was being built out on services?

  20. Observing(...) Avatar
    Observing(…)

    @david
    Ryan straughn is a convenient economist. Lol. What manufacturing and agriculture for export what. We struggling to provide for and feed ourselves far less gain forex from it. As most things, sounds good but….

  21. Prodigal Son Avatar
    Prodigal Son

    David,

    Dont you think we could look at the possibility of exploring the oil identified off our coast? There was some talk of this during the dying days of the BLP administration.

  22. David Avatar
    David

    What about Sir Roy firing his first salvo at privatization and divestment? What is the role of the social partnership? What role will the unions play in the next general election?

    On 1 November 2012 22:06, Barbados Underground

  23. David Avatar
    David

    @Prodigal Son

    It appears that the government has no appetite for going in this direction and has placed its focus on building out a clean energy program. Darcy Boyce has been mum on this matter. What are the issues? Given current price levels is drilling in our deep waters not economic at this time? As usual we the people have not a clue given the close communication policy of the government..

    On 1 November 2012 22:26, Barbados Underground

  24. Hants Avatar
    Hants

    agriculture for exports is a waste of time. Food security and food import substitution is more important.

    Anyone living in major North American cities can tell you that South America is flooding the markets with fresh produce and agricultural products.

    Grow food for local consumption and eliminate middle man called freight.

  25. David Avatar
    David

    @Hants

    There is the view that Barbadians will NOT buy local which explains the earlier comment about the need for BOTH political parties to have a conversation with the people reading from the same book.

    On 1 November 2012 22:41, Barbados Underground

  26. Hants Avatar
    Hants

    David when the forex dries up and Super Centre shelves bare then they will be shopping at my favorite spots. Eagle Hall,Spry street, Roebuck street and James street.

    The big shits will be sending duh maids to front fuh dum.

    Blame the DLP for mis management of the economy but there is a harsh reality Barbados must face.

    THERE is no ECONOMIC RECOVERY in North America or Europe.

    http://www.cbc.ca/news/business/story/2012/01/31/gdp-november-economy.html

  27. Enuff Avatar
    Enuff

    Folks the ‘plan’ is NOT working. Why are we over analysing the situation? The imposition of those huge tax increases out of panic at the early stages of this government’s tenure has suffocated the economy. Running a government in the 21st century does not only require ‘brightness’, a Cabinet with critical thinkers is what is necessary and I have said repeatedly that this administration’s policies are disjointed and antiquated–a sure sign of poor critical thinking and analysis. Who else would promote as a brilliant idea the establishment of a physical ‘showroom’ for local producers rather than virtual in this the internet age? Who, faced with a traffic nightmare in Warrens, would build a multi-storey government office complex in Warrens?

    I am happy to see that all of a sudden the ‘pundits’are asking the for evidence to back up their proposals. Had they done the same in 2007/08 we may not be in so much doodoo.

  28. Bush Tea Avatar
    Bush Tea

    “Folks the ‘plan’ is NOT working.”
    ***********
    LOL at Enuff
    Nothing could be further from the truth. The BIG plan is working EXACTLY as laid out.
    After years of missing the REAL important things of life because we have been distracted with accumulating “things”, we are about to go through a phase when most of these ‘distractions’ will be taken away from us (in an effort to get us to focus on the REAL issues of life).
    Obviously most of us will continue to miss the point….and the boat, …but a few will see the light…..and because of those few, it will ALL be well worthwhile..

    The PLAN is wukking Enuff 🙂 you can trust the bushman.

  29. David Avatar
    David

    @Prodigal Son

    You reference to Sir Roy was appeared to be not complimentary. Wasn’t it a BLP government which conferred the Knightship?

  30. Observing(...) Avatar
    Observing(…)

    @david
    That’s the least they could do for him “helping” them to simultaneously take down sandi, turn worker opinion and a 1994 victory. Fair is fair 🙂

  31. Hants Avatar
    Hants

    Bushie “but a few will see the light”.

    and a lot will feel the pain.

  32. David Avatar
    David

    @Hants

    You are correct. So far nothing has happened to cause BU to change our election picks. People are just tired of the lack of vision and creativity being demonstrated by both parties. The Barrow model which was changed a little by Adams.

  33. Bush Tea Avatar
    Bush Tea

    @ Hants
    Amen.

  34. DavidB Avatar
    DavidB

    Aside from the loss of the second BA flight, Virgin’s forward bookings for winter are not looking too good either. The outlook among other tour operators from Europe and the UK is not very promising either.

    It’s scary to see the tired, dead and dying tourism plant across Barbados. The question is whether we have passed the tipping point from which we might not be able to recover.

    Likewise for the international business sector.

    I have seen much criticism on this blog about the reliance on these sectors in the past, but I have not seen any credible alternatives put forward. Look at our circumstances and tell me what else we have or can do that would earn the foreign exchange to finance our lifestyle.

    The fact that a lot of our business is moving to St. Lucia suggests that we are doing something wrong. A big part of it is over-taxation, poor service, lack of value for money, governmental bureaucracy and a lack of leadership.

    At this point, I would not wish this economy on my worst enemy. So, I don’t know why Owen would want to be saddled with this basket case at this stage of his life. It would likely take much of the first term even to able to make a dent.

  35. We do not want back Owen Arthur Avatar
    We do not want back Owen Arthur

    The Rating agencies cite structural issues with the Barbados economy which affect our competitiveness. The BLP supporters on this blog mistakingly suggest that this must be blamed on those who assumed the reins of government in 2008 when our trading partners economies deterioated.
    That is a lie. The BLP rode the world global boom from 1994 when the foreign money was flowing. The sugar industry was not restructured, alternative energy was not addressed, the runaway cost of health care expenditure was not addressed, the size of the public sector was increased- These are the facts – Arthur dropped the ball – ask Clyde Mascoll.

    Privatization will not yield the returns at this stage because if you are selling your house and I know that you are desperate for money, I will hold out for the lowest possible price.
    No private sector entity will take up a public sector entity and keep the wage bill up. People will have to go home. Sinckler is exactly correct.
    The BLP wants people to believe that we can have our cake and eat it too.
    Only an ass cannot see that this is modern day corn beef politics – Why did Arthur not pursue a policy of privatization before when money was flowing?
    Because Arthur lacks vision, is motivated by power and is vastly overrated as an economist.
    The BLP needs to tell the truth and stop these pie in the sky promises which we all can see are just to try to fool people for votes.
    Bajans must reject this backward BLP proposals- Arthur clearly does not have any fresh,visionary ideas.

  36. balance Avatar
    balance

    Observing(…) | November 2, 2012 at 7:50 AM |

    @david
    That’s the least they could do for him “helping” them to simultaneously take down sandi, turn worker opinion and a 1994 victory. Fair is fair

    SANDI TOOK DOWN HIMSELF AND THE PARTY HE PURPORTEDLY LOVES BY CALLING AN UNNESSARY ELECTION TO THE DETRIMENT OF THE PARTY

  37. We do not want back Owen Arthur Avatar
    We do not want back Owen Arthur

    If you do not want to see the return of the most overated, vindictive, spiteful and corrupt politician in Barbados, let us come together and declare – “We do not want back Owen Arthur”.
    Arthur has nothing fresh, new or visionary to offer Barbados politics. He is trying to win an election by referring to a time of global boom when Barbados trading partners and our neighbours were growing.
    The world has changed since then and Arthur refuses to be honest with the people of Barbados. Instead , he is throwing “Pie In The Sky Promises” to catch gullible people. Independents will not be fooled as Arthur tries to insult teir intelligence.
    You will not improve Barbados economy by putting back a man who Clyde Mascoll said was a disaster as an economist.
    Back then , Mascoll was free to speak and not driven by the politics of revenge. We do not want back Owen Arthur.

  38. Observing(...) Avatar
    Observing(…)

    @balance
    The decision does not erase the antecedents.

    Just observing

  39. old onion bags Avatar
    old onion bags

    SANDI TOOK DOWN HIMSELF AND THE PARTY HE PURPORTEDLY LOVES BY CALLING AN UNNESSARY ELECTION TO THE DETRIMENT OF THE PARTY

    ***********************
    But if PM Stuart was on the ball…and called it round this time LAST YEAR…Carson would be sitting tight …and not on his rant……its called a strategic endowing…..”but a miss is as good as mile…and no need crying ova spilt milk”…..( I know who would have been on the ball hint Owen Messi)
    opportunity gone a begging Carson…

  40. theone Avatar
    theone

    And what vision does the DLP has except of course blaming the last administration, seems we are in a very dire situation

  41. David Avatar
    David

    Didn’t Sandi lose a no confidence motion and following took the decision to get a mandate from the people?

    On 3 November 2012 13:09, Barbados Underground

  42. theone Avatar
    theone

    Dr worrell claims he is cutting the spending power of barbadians more or less, but who’s spending power, the middle, poor and underprivileged, cause the man at the top can afford these cuts.

  43. David Avatar
    David

    In a ‘democratic system’ like ours there will always be groups at the two extremes of the society. It is a reality which to be managed.

    On 3 November 2012 13:14, Barbados Underground

  44. DavidB Avatar
    DavidB

    @ We do not want back Owen Arthur | November 3, 2012 at 6:55 AM

    Despite your arguments, the people of Barbados have already made up their minds to rid themselves of the current administration, and will continue to do so in increasing numbers.

    This is not about counting chickens before they have hatched, but more about a people being fed up with government inertia and incompetence resulting in a burden that is too heavy for the country to bear.

    It is also about trust. Owen may have his faults as all of us do, but, rightly or wrongly, people trust him to get the job done because of his experience.

    In criticising Mr. Arthur’s proposals, the Barbados Economic Society lacks credibility because of their prolonged period of silence in the face of the outrageous promises made by the DLP prior to the last election. They have also largely been silent as the economy has declined and people have suffered. They are viewed as a group of academics that lack the practical experience of managing a country and an economy and some of their criticisms seem to have a personal edge to them.

    As to be expected, there is a possible downside to the growth policies announced by Owen Arthur. In the initial stages, for example, there is likely to be considerable pressure on our foreign reserves. But people would rather take on those risks than keeping the status quo of negligible economic growth, skyrocketing prices, rapacious taxation, rapidly declining balance of payments with nothing to show and the overall dreary outlook that is being promoted as the only path forward.

    So unlike you, most people do want back Owen Arthur.

  45. Gabriel Tackle Avatar
    Gabriel Tackle

    When investors have confidence in an administration, forex will begin to flow again.Way back in the 70’s a landowner cum hospitality entrepreuner who happened to be a dem said, when the dems are in power,investors hold back.The same obtains now.If perchance the bees are returned,a new ball game starts and this economy will grow once again.Fact.

  46. Sargeant Avatar
    Sargeant

    Since the subject of Foreign Exchange always seem to rear its’ head on these blogs could someone analyse the following article published in the Nation on Sept. 27/2010?
    If the Governor of the Central Bank is a creature of the PM why didn’t Arthur exercise this authority by eliminating these controls during his years at the helm? What does “gradually phased controls down” mean? Can I take his comments to mean that Foreign Exchange Controls will be a thing of the past if he gets another mandate?

    MON, SEPTEMBER 27, 2010 – 12:00 PM
    THE CENTRAL BANK OF BARBADOS should start getting rid of the island’s foreign exchange controls – and stop being so dogmatic.
    These suggestions have come from former Prime Minister and Minister of Finance Owen Arthur.
    Arthur told BARBADOS BUSINESS AUTHORITY that the bank seemed to be holding on to the controls because of the thinking that they protected the exchange rate.
    “I lived in Jamaica in the 1970s and [former prime minister Michael] Manley had exchange controls, but if you increase your deficits at an alarming rate and print money to finance them, there are no exchange controls that can help you,” he argued.
    Exchange controls
    “But what has been our reality? Every major new sector in Barbados that has been created has required the removal of exchange controls for their creation.”
    “In order to get new investments here, you have to remove them, so you may just as well remove them.”
    Arthur made the point that “having exchange controls would not help you maintain your exchange rate if you do other foolish things with the macroeconomy”.
    The way he saw it, “the key is not to have these massive deficits that you finance by printing money”.
    Arthur made the comments after addressing and fielding questions from members of the Barbados International Business Association (BIBA) at The Savannah Hotel on Tuesday.
    He complained that the Central Bank had been “asserting itself too dogmatically” in the country’s business and financial affairs.
    He said that the thinking of the Central Bank needed to relate to 21st century challenges.
    “In England, at the time of the war with Napoleon, they had a post called the bell-ringer,” he recalled. “A man was to stand on the Cliffs of Dover and ring a bell if Napoleon’s army approached.
    “That post was abolished in 1945 and the point which I am making is this: that bureaucracies develop and they hold on to purposes long after any justification exists for their survival.”

    Arthur went on: “The Exchange Control Act says that the Minister of Finance is the exchange control authority but he devolves responsibility to the Central Bank.
    “So the Central Bank has created a bureaucracy to deal with the devolved authority long after any justification for it exists.
    “All of our major investments require the removal of exchange controls, so we may just as well remove them in the law.”
    Arthur, who was minister of finance from 1994 to 2008, said his government had “gradually phased [controls] down”.
    “Apart from Belize, we are the only entity in the Caribbean that has maintained exchange controls,” he complained. (TY)
    http://www.nationnews.com/index.php/articles/view/foreign-exchange-controls-must-go/

  47. DavidB Avatar
    DavidB

    @Gabriel Tackle

    “Way back in the 70′s a landowner cum hospitality entrepreuner who happened to be a dem said, when the dems are in power,investors hold back.”
    =======================================

    Now i know the source of the mantra that I hear from all the DEMs’ supporters. I call it a “political dog whistle” because it really seems to get them going when no one else can grasp what they understand by it.

    But they have the logic backwards. I have had to point out to these fellow citizens that people invest when they have confidence that their investments will be successful. No businessman would hold back investments in order to be spiteful, because quite simply his interest is his pocket. Why would anyone jeopardize his or her own economic interests?

    If people do not invest when the DEMS are in power, it is because they are not managing the economy well. Full stop, end of story.

  48. Michel Avatar
    Michel

    I’m really enjoying the design and layout of your blog.
    It’s a very easy on the eyes which makes
    it much more enjoyable for me to come here and visit more often. Did you hire out a
    developer to create your theme? Great work!

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