Notes From a Native Son: This is the Year When Our Long-term Future Will be Decided

Hal Austin

Hal Austin

Introduction:
As we enter the dawn of a new year, all attention will be focused on the coming general election and, for some of us, the paucity of ideas battling for votes from a badly informed electorate. As things stand, it is largely a competition between tweedledee and tweedledum, although the recent injection of a broad, if under-articulated, idea of privatisation has raised its head.

However, even this glimpse of an ideological difference has been crowded out by the yahboo background noise of party humbug, rather than a rational discussion of the notion that firms owned by the private sector are in themselves inherently better managed and more efficient than those held by the public sector or social enterprises. Such closed mindedness also acts to shutdown debate, the arguments become irrelevant, as by definition people are either for or against the idea under discussion.

Now, as I have said here before, the world is entering a new phase in which the old economic assumptions are now redundant and the new global economic (and military) power will be centred in the early part of the 21st century in Asia and to some extent, Latin America. Therefore to understand what is taking place and the possible outcomes, one needs to read the runes carefully.  For a little island state, proud of its independence, careful observation is more important now than at any point in our history.

Analysis:
As befits its status as the most powerful economic and military nation in the world, everyone is obsessing over the so-called fiscal cliff, the description given by Ben Bernanke to the series of tax increases and spending cuts arrangements left in place for President Obama by George W. Bush and which come to an end at the end of December. In global terms, these developments are not as important as some seem to suggest; it is not economic Armageddon. Unless the Republicans and White House come to an arrangement, it is conceded that the crisis may tip the US back in to a recession. (see: the Congressional Budget Office: “The Economic Effects of Policies Contributing to Fiscal Tightening in 2013.

If the projected fiscal cliff deficit cuts go ahead, leading to a reduction in GDP of 3.5 per cent, and with the projected two per cent growth, the reality will be a decline in US GDP of -1.5 per cent, plunging the economy back in to the much talked-about recession. But, as I have already said, the world has moved on and the US economy accounts for about 25 per cent of global GDP or 21 per cent according to the IMF), a smaller portion of the global economic drivers than it did five or ten years ago. Even so, it is unlikely even the Tea Party wing of the republicans will like to be held responsible for plunging the economy in to a death spiral, and it is very likely that at the eleventh hour, a compromise will be reached; also, American consumers are back spending money, and this too will have an impact on the wider economy. This short term belt-tightening should see the US, by 2020, become self-sufficient in energy with its shale oil and gas production, according to the International Energy Agency. Further, US banks are holding about US$1.4trn in liquidity with the Fed, and, unlike the UK, banks have been extending their lending to households and businesses.

On the other hand, shadow banks are experiencing shrinking balance sheets, falling from about US$14.8trn at the fading end of the credit boom in 2008, to US$9.9trn by the end of Q3 2012. Equally, household debt to income ration has been reduced from a peak of 134 per cent to just over 112 per cent at the end of Q3, 2012, with incomes set to grow by three per cent in 2013, above the inflation rate. In the Eurozone, the economic cycle is at a totally different stage, but predictions of the collapse of the economic area and the exit of Greece and Spain, are grossly exaggerated. This is inspite of the extra-ordinary sovereign and bank debt, and the weakening of the German economy, the main driver of the Eurozone, almost all the troubled economies are now showing signs of stabilising. About euro20bn of Greek debt is maturing in 2013, compared with euro100bn in Spain and euro300bn in Italy. Sometimes it is forgotten that the success of the export-led German economy depends on three key exports: all luxury car s – Mercedes Benz, Audi and BMW vehicles. German high-end engineering cannot sustain the economy, outside the Asian rush for these top brand cars, and German consumers are unlikely to take up that slack (Germans do not spend), so sooner rather than later, Germany will have to find alternatives exports.

To all extents and purposes – and despite the predictions by the Centre for Economics and Business Research that the US, China And Japan will remain the top three economies over the next ten years – we can dismiss the long period between the 1960s and the turn of the 21st century as the high point of Japanese economic dominance, second only to the great US.

I do agree, however, with the CEBR that by 2022, China’s economy will be about 83 per cent of the US and rising, from its current 53 per cent. The Asian financial collapse, the recent global banking crisis and the two decades of stagnation have combined to anchor any hopes Japan had of economic growth firmly bouncing along at the bottom. As it struggles to recover, it will continue to face the growing military and economic might of China for regional dominance.

Further, its post-war dependence on US military protection will be in vain, although we cannot rule out a nuclear war between the US and China, and, in any case, an intense trade war between the US and European Union. The US mind-set, as we have seen from the Connecticut school massacre, is to shoot first and answer questions after. This domestic psychology flows over in to America’s approach to the rest of the world, from legislation with tentacles that stretch all around the world, to the assumption that any offence or alleged offence committed on the internet becomes automatically an alleged crime for which the US can demand that the suspect be extradited.

In the UK, the government is now estimating that its fiscal squeeze will last until 2018, so our biggest tourist market will have further belt-tightening for another five years. Added to this is that British households have one of the highest debt to income ratios in the developed world, so with high debt and falling incomes, and with the likelihood that unemployment will grow as many of the British ‘zombie’ companies collapse, there is unlikely to be a significant reduction in this level for at least another five years.

In the emerging markets, growth has slowed from about 11 per cent seven per cent in China with inflation at two per cent, and in Brazil dropped from 7.5 per cent to two per cent. The continuing war in Syria runs the risk of a regional conflagration if Israel and Turkey become involved, but as long as the Jewish state and the secular Muslim neighbour keep out of the civil war, then the only state to be destroyed will be Syria.

Conclusion:
How this new reality is going to be played out in Barbados is anybody’s guess. There is no publicly available information from the government or the central bank to suggest that our key policymakers are on top of this global, regional or national economic crisis and have sound ideas for steering Barbados clear of the choppy waters. Ordinary people are left with the impression that there is a level of petty party fiddling while Rome continues to burn.

Whatever the outcome, Barbadians will have to dig deep to maintain the collective standard of living they now enjoy, that which they enjoyed during the boom years on sovereign and household debt, and the national fear of even worse to come.

As we go in to a general election year, serious questions must be asked of all those who set themselves up to be our political masters. Personal friendships and political allegiances must be secondary.

As you reflect on this, have a Prosperous New Year.

56 thoughts on “Notes From a Native Son: This is the Year When Our Long-term Future Will be Decided


  1. @Carson & To The Point:

    Since you guys are now a tag team you could probably respond to the view circulating that Donville is trying to manoeuvre (should we say inveigle) his way into becoming the next PM should the DLP wins the next elections.
    Is there any truth in this rumour that he plans to buy his way and oust Freundel with the support of the other MP’s come early February?
    Just Asking?

    BTW, when are the Estimates due to be debated in Parliament?


  2. @ttp
    Yes, pllease go concentrate on the task at hand. We’ll miss you but we’ll cope.

    @carson
    It’s usually said but this is the first election in recent memory where the philosophical and strategic differences are so stark (or at least that’s what they would have us believe)

    Remember “there are no philosophical differences between the two parties on privitisation”???

    Just observing


    • A scan of the gloabl news makes one wonder what definitive plan/strategy is possible for Barbados. We are an island that imports practically all of our fuel needs bar 1000 barrells. We import 700 million in food, practically all and we rely on tourism, International Business and related activity to pay the bill. The prospect that the markets we depend on like the UK and a sluggish US economy makes mid to long term planning a challenge but yet we must. Some will argue that the government’s strategy to build out an RE program is good although being implemented with Stuart like deliberateness.

      Agree howver that holding a a course to nowhere will not do it. We need to increase our activity. If tourism it is then we have to up our game in the sector.


    • Regarding the BLP privatization plan many have criticized it and wondered why put it on the table for discussion to muddy the national debate. A generous spin on it maybe that it is their attempt to put something tangible on the table instead of the steady state approach of government.Yes it backfired but the original thought remains. We cannot continue borrowing to pay salaries. We grow revenue or cut expenditure or both. Something has got to give.


  3. If that is the case will someone please stop donville, with that mentality it would definitely be a wrap for Barbados.


  4. @ David | December 28, 2012 at 7:53 AM |

    The privatization of State entities of a commercial nature is one of the non-negotiable requirements of an IMF restructuring programme.

    Even a blind DLP hack like ac sitting backwards on a trotting horse can see this irrevocable date with the privatization destiny. The difference between the two parties is that the DLP is lying to the people to be re-elected then after to release the privatization bomb on them.
    There absolutely nowhere that public expenditure can be significantly reduced to meet IMF requirements and satisfy the credit rating agencies criteria without the government divesting of its ownership and control (and even closure) of a number of public sector business entities.
    The DLP hacks can talk as much as they like. The BLP can back peddle as much as they like. But the stark reality is staring right in our face and it is inevitable that within 6 months the more marketable term ‘economic restructuring’ will be this country’s main event.
    Hence my wish that the DLP be the chief cook and bottle washer in this pending drama as they continue to blame the BLP for creating the privatization devil.
    I can just imagine Estwick saying: Dem BLP people made me do it!


  5. @david
    “Mid to long term planning a challenge, yet we must.”

    You are correct. These are the times where you build for adaptibility and responsiveness. Concrete rigid plans will be problematic in this environment. Thinkers, risk takers, analysts, and visionaries are the ones needed. The old way of doing things just will not work. The world situation is the “new normal.”. We seem to be dodging that reality.

    Observing


  6. millertheanunnaki | December 27, 2012 at 10:45 PM |

    All the rumors in the world will not get you lot off the opposition benches any time soon.


  7. observing

    “Remember “there are no philosophical differences between the two parties on privitisation”???”

    The only one saying that is the Barbados Labour Party and they dont speak for the Democratic Labour Party.

    There is a world of difference between the Barbados Labour Party and the Democratic Labour Party!!!!


  8. @ Carson C. Cadogan | December 28, 2012 at 9:29 AM
    “The only one saying that is the Barbados Labour Party and they dont speak for the Democratic Labour Party.”

    Are you, Carson C. Cadogan, calling the MoF Chris Sinckler a blatant liar?
    Let us hear you deny that the MoF said that there are no philosophical differences between the two main parties on Privatization.


  9. millertheanunnaki | December 28, 2012 at 9:57 AM

    At least when quoting someone make sure you have them correct.

    But then again you BLP people dont let the truth get in your way.


  10. millertheanunnaki | December 28, 2012 at 9:57 AM

    You real hard ears.

    I invited you and DAVID blog owner to the Democratic Labour Party meeting at Springer School and I look around and look around but didnt see either of you.

    If you had attended neither you nor DAVID would still be asking that silly question.

    But check the dlp website the speech may still be up.


  11. At the next DLP meeting I am sending out a personal invitation for ADRIAN LOVERIDGE to attend, it will make a world of difference to him.

    Stop him from talking so much foolishness!


  12. @ Carson C. Cadogan | December 28, 2012 at 10:22 AM |

    Carson, are you telling us that Chris Sinckler never said on the VOB call-in programme Brasstacks hosted that day by Peter Wickham that there are no fundamental or philosophical differences between the BLP and his party the DLP as far as Privatization is concerned?
    Say it one more time that Chris the Unclear Sinckler is a liar. Tel us that he denied ever making such remarks on the VOB call-in programme.


  13. miller,
    Do not take on “baliar” CCC. Everyone who was listening to Brasstacks that day heard Sinkliar declared on national radio that there are no philosophical differences between the two main parties on privatization. His friend Peter Wickham appeared shocked and asked him to repeat what he just said.

    CCC would not tell BU that after that admission from Sinkliar, he was hauled over the coals at the next cabinet meeting for going against the public policy of the DLP on privatization.

    The DLP thinks it can come to the public and lie to them boldfacedly like they did in 2008 just to win an election. The people have wised up to the DLP, they know the DLP is a lying, incompetent bunch.

    By the way, miller, you asked where the money from the sale of the BNB shares was going? Well I understand that 36 million of it was going into the Valery project and you know that that project is riddled with “steel” plus you know who is a consultant to that project.

    Spare me, Donville for PM of this country, hell no!


  14. millertheanunnaki | December 28, 2012 at 10:34 AM

    I am not saying anything more to you.You should have come to the meeting.

    You and Mr. Barclays Bank.


  15. Prodigal Son

    There you go again, last time you or one of your people say $28million now it is $36million.

    You BLP people and the truth are no friends at all.


  16. millertheanunnaki

    Do you have the answers for Dean Critchlow about the missing tons of money during your administration.

    The other senators want to know as well.

    They are waiting.


  17. Recently I asked a senator if kerry simmonds come back with any answeres about the missing money, and he said you know the answer to that.

    If he came back with answers, the answers would lock up a lot of his people.


  18. @ Carson C. Cadogan | December 28, 2012 at 11:03 AM |
    “Do you have the answers for Dean Critchlow about the missing tons of money during your administration.”

    Not only are you calling the MoF a deceitful liar but also the PM one too.
    The PM made it clear in his recent contribution to the Anti-Corruption Bill that the honourable members of that house cannot be tarnished with any corruption brush. He gave all members including OSA a clean bill of political health.

    You should refer the senators including the dotish ex-cathedra political weathercock to the PM’s speech to get any answers on missing monies.
    So whom are you going to believe? The molasses man of Integrity or the old BLP carrier of the ‘mene, mene, tekel, upharsin ’DLP scales?


  19. @carson
    You and ttp gotta be related.

    Are you denying that Chris Sinckler said that there are no real philosophical differences between the two parties on privitisation????


  20. No wonder they trying to break into Ian Bourne’s website alot of these commentators are politicians or yardfowls (one and the same) who i might add are also entitled to their opinions and freedom of speech. But it certainly begs the question, why dont these anonymous on BFP and BU push for freedom of information act, integrity legislation would be a stretch and asking way too much.In reading these commentaries i can just about tell who is who…….


  21. observing

    You too?

    When I give out invitation to all of you to attend DLP meetings, make a effort and come and you would not have to keep asking silly questions, ok?


  22. CCC,
    You cannot even get Dems to attend your meetings, how do you expect people who are fed up with the Dems to attend?

    Still you have not told miller and I how much money from the BNB shares have gone to the Valery project?

    By the way, did the rush to sell the shares at a big loss to the taxpayers to boot, have any connections with the election that Mr Molasses is so afraid to call? Will any of this money find its way back into the coffers at George Street? We can speculate, you know, after all CLICO’s gravy train dried up a long, long time ago and the queen will certainly not part with any of the largess from FAMILIES FIRST.

    Wow, the Dems cannot call the election because they do not have the finance like the gang of eleven said they had a year before the last election!


    • @Prodigal Son

      You should complete the info and say Uncle Jeff is reported to be going to Parkinson School and Alleyne (?) going to AX. There goes the myth that Uncle Jeff couldn’t be transferred.


    • @Prodigal Son

      You should complete the info and say Uncle Jeff is reported to be going to Parkinson School and Alleyne (?) going to AX. There goes the myth that Uncle Jeff couldn’t be transferred.


  23. Can a bipolar nation outfox the IMF?

    Franklin JOHNSTON

    FIRST, I use buses and public hospitals so I am shocked that so many leaders incurred near $2tn in debt yet none of our services work well. After 50 years of independence, 60 plus of self-government, almost 200 of freedom and 500 years of fame, nothing works. Jamaica has been a brand since Columbus took us to the Royal court of Spain and Portugal and tantalised the English. We made global news for centuries and as Port Royal attests, wickedness was never far off. Usain Bolt and Dudus are part of a Jamaican tradition of excellence in good and evil. So why do none of our systems work? We struggle to get food production off the ground for the “umpteenth” time; health care is shaky, light and power is vilified; housing is saved by its vice-ministry “Food for the Poor”; pick any service and as for education let the record show it has underperformed for decades and many kept silent; and facts as unearthed now match the sub-standard reality we have-someone blundered. A great injustice was done to poor people – the educated are not blameless. Transportation is feral and our poor are disrespected as leaders kowtow to powerful “eat a food” robots and minibuses. We demand no account, ignore betrayal and often “shoot the messenger” and do not heed the message. Which service can you tick off as “Job well done?” We do have a veneer of modernity and civility – little substance. The poor can take no more!

    Read more: http://www.jamaicaobserver.com/columns/Can-a-bipolar-nation-outfox-the-IMF-_13281548#ixzz2GOQnKj4e


  24. prodigal son

    “You cannot even get Dems to attend your meetings, how do you expect people who are fed up with the Dems to attend?”

    I take it that you have missed all the meetings.

    The halls were bursting at the seams.

    My goodness you missed so much1


  25. offtopic

    “Commissioner of Police Darwin Dottin said yesterday that the force had reviewed all related files and “there’s really nothing that would keep me awake at night on this matter”.”

    Instead of just apologising to the innocent man arrersted for rape and pledging that such would never happen again, that is what we got from our top cop.

    He should resign, time for him to go home.


  26. Dottin only said that because the accused was well known to the police as a convicted and well known thief, however there is nothing in that same file to say the accused was ever a rapist, but in Dottins warped, self righteous world there is no difference. Not caring that the real rapist is still out there; and some idiot actually graduated him from university with an LLB and some other idiot made hom commissioner of police.wonder how many men and women who may be criminals, but are now sitting in prison for crimes they did not actually commit. Small island justice.


  27. @carson
    what the hell. I actually agree with you on something!!!!

    Nooooooooooooo!!!!!!!!!!!!!!!!

    Just observing.


  28. ….Is anyone beginning to see why a Bushman would have no interest in the political life of Barbados?
    THE PLACE IS DOOMED!
    We need to look BEYOND the ashes of the Barbados that we know and knew….

    Between the PM, (who must surely be at least smart enough to recognize that he is an incompetent joker),
    -to the Commissioner of Police, who managed to raise the level of National Embarrassment by several notches with his press conference yesterday,
    – to the set of jackass reporters who interviewed him
    – to the complete set of donkey holes associated with the AX fiasco
    – to the unbelievable national embarrassment associated with the John Jackson saga unfolding here on BU
    – to the hopeless incompetence of the leadership of our main industry as highlighted here on BU.

    AND KNOWING THAT NOTHING INTELLIGENT WILL BE DONE ABOUT ANY OF THESE…..or about the hundred other bits of idiocy ongoing in the place….

    The whole thing is best summarized by Denis Johnson in a recent comment on BU – although he put it in his usual sweet diplomatic language….. “Bajans are a bunch of brass bowls!”


  29. I am old enough to remember commissioners such an Stoute and Farmer as commissioners of police, and I do not think that any of them would have made such a basic and semi-literate statement that the man accused of raping the two English women was not cleared by DNA evidence.
    Further, having made this rather interesting statement as his so-called review of the files, is he suggesting that police and the prosecution had evidence of the man’s guilt that was not presented in court?
    This is the second libel against this man, unless the commissioner is playing a game of sue me if you can, on the basis that the balance of probability is a lesser test than beyond all reasonable doubt?
    Are the attorney general and Guyanese director of public prosecutions going to tolerate this nonsense? Is his sorry state what Barbadian criminal justice has been reduced to?
    Where is the public discussion about this crude and uncivilised example of criminal justice?
    The man has got to be removed from office. We deserve better.


  30. bush tea

    “to the set of jackass reporters who interviewed him”

    Geeze, that was the next point that I was going to tackle.


  31. @ Hants | December 29, 2012 at 10:33 AM |
    “Barbados needs a new competent COP.”

    Barbados needs a set of new people in charge of its major public institutions.
    Do you know any in Canada that can come to save this place?
    The next CoP ought to be a foreigner; preferably white so that the blacks around here with their plantation mentality would respect and obey.
    We don’t want another CJ foul up because of old school ties.


  32. millertheanunnaki | December 29, 2012 at 10:49 AM

    I have no problem with that, but would he get good cooperation from those he has to work with?


  33. @millertheanunnaki,

    Retired Toronto Assistant Commissioner of Police Keith Forde would be a great COP in Barbados but I don’t think he would be interested.

    An intelligent,competent ,educated Bajan who made it in Canada through hard work and determination.


  34. Another thing that bothers me is the fact that with much fanfare the Police announced the establisment of a cold case squad a few years ago and to date has it has achieved diddly squat.


  35. The big problem with the Barbados Police Force is Lawyers.

    The rot started when Durant was made COP ahead of senior police officers who were respected leaders in the force.

    It would have been better to put a program in place to send senior superintendents for formal training in Police Administration instead of parachuting a Lawyer in.


  36. hants

    the same thing is happening at the prison, the defence force, the fire service. If you dont have paper qualifications dont care how competent you are, you are not getting very far in these organisations.

    As a result square pegs are being fitted into round holes.


  37. This country is in serious trouble when its future and decision making is in the hands of the DLP and a man called CCC seem to have so much influence. OMG!!!!!!!!!!!!!!!!!!!!!!!!!!


  38. @ Hal
    Bushie was hoping that no one else heard that part of the interview about the DNA…. LOL
    Shoite man, NO ONE can be so damn foolish.
    Last time Bushie heard that kind of logic was in primary school on the subject of marbles…( since I did not see, you cannot prove that you did not brush…. So “up toss you”)

    …lets just hope that the foreign press dismiss the whole thing as some kind of game by the natives….


  39. How is Barbados/CARICOM going to cope with the rearrangements of the tectonic plates of global politics?

Leave a comment, join the discussion.