The Wolf is at the Door

Walter Blackman

Walter Blackman

When judged against the harsh background of adversarial politics, only two prime ministers of Barbados (who led the country for 7 years or more) can lay claim to being able to escape the clutches of the IMF for the entire period of their rule – Errol Barrow and Owen Arthur.

Say whatever you will, it is an undeniable fact that Barrow and Arthur were able to utilize whatever resources they had available at their disposal without plunging the Barbadian economy into disequilibrium. This achievement in itself represents a public demonstration of their political and economic skills. One was from the DLP, and the other is from the BLP, but we must commend and applaud both of them equally for distinguishing themselves in this regard.

Borrowing, taxation, and easily accessible NIS funds were the main resources available to Barrow, Arthur, and all Ministers of Finance. Naturally these resources varied in amount as administrations came and went.

By the time the David Thompson administration assumed office in early 2008, the world had changed drastically. Volatility and uncertainty had become so widespread that the Governor of the Central Bank informed and warned all Barbadians that the macroeconomic models used to analyze and predict outcomes under the “old” economic order, were no longer applicable.

The quality of hundreds of thousands of Barbadian lives depended heavily on Thompson’s ability to successfully confront the challenges brought on by weakened world economies. Recessionary conditions in Britain and the USA especially, two of our major tourist markets, had the potential to adversely impact our foreign exchange earnings and cripple our economy.

Unfortunately, the Thompson administration decided to spend its way out of the problems created by the global crisis. Rather than tackle economic difficulties head on, the government offered Barbadians a placebo of propaganda and encouraged them to seek solace out of the fact that, whereas the global meltdown had wreaked havoc on nations worldwide, our tiny country was still holding its own.

Nevertheless, when all of the political spin has been cast aside, an impartial analysis of the economic performance of the brief Thompson administration paints a picture of woe.

The administration had come to power promising to control and reduce consumer prices, but prices surged instead.

By the time of Thompson’s death, the public debt had soared from about 7.3 billion when he assumed office to 9.5 billion. Unemployment moved from 6.7% to 12.1% in 2011, an increase of just over 80 ½%.

By late 2010, when Freundel Stuart emerged as PM of Barbados, the deteriorating state of the Barbadian economy ought to have been weighing heavily on his mind. To compound his problems, a multiplicity of issues related to CLICO, Al Barrack, better governance, transparency, integrity legislation, white-collar crime, and political corruption were crying out for attention.

Philosophically, as Prime Minister of Barbados in the twenty-first century, Mr. Stuart would have been well advised to reflect on the following definitions, listed in declining order of national pedigree:

Bajan – A person born in Barbados

Barbadian – A citizen or Permanent resident of Barbados

West Indian – A person born in a CARICOM country

Alien – A person not born in a CARICOM country

Philosophy and economic considerations converged in the form of the St. John by-election in January 2011. Given the perilous state of the economy, the by-election presented Stuart with an excellent opportunity to broaden the knowledge base in his cabinet by searching for someone with a business, economics or finance background.

By selecting David Thompson’s wife, Stuart eloquently told his subjects that he could not find a Bajan amongst them who was qualified for the job, and furthermore, he demonstrated that strengthening the cabinet to tackle economic issues was not one of his objectives.

Not surprisingly, the economic morass left by Thompson worsened under Stuart. In its 2011 consultation with the Government of Barbados, The IMF emphasized that the government should concentrate on reducing its expenditure, cutting its wage bill, lowering its transfer payments to statutory corporations, and minimizing tax exemptions.

The Government of Barbados opted to disregard the IMF’s advice.

However, despite the untouched worsening fiscal deficits, the unchecked declining receipts in tourism and exports, and the galloping public debt, private capital inflows and increased government borrowing were enough to absorb the pressure that was brought to bear on the balance of payments situation. At September 2011, international reserves were respectable enough to provide 4.5 months of imports cover. Yet, cognizant of the government’s unwillingness or inability to effectively tackle economic problems, the IMF cautioned that the international reserves could reasonably be expected to come under pressure in the short term.

The IMF did not have to wait very long before its expectations materialized. Downgrades and an unstable outlook by the international rating agencies sent a signal of alarm to investors and eventually made it increasingly difficult and expensive for our government to borrow. By 2012, private capital inflows had begun to dry up. Paltry private capital inflows, reduced tourism earnings, and the severely limited borrowing capacity of the government all conspired to produce the ingredients needed to create a balance of payments crisis.

Therefore, at the end of 2012, despite public and political declarations to the contrary, Prime Minister Stuart certainly knew that the economy was hemorrhaging its way into disequilibrium. Alas, with general elections just around the corner, political self-interest dominated a DLP strategy aimed at convincing the electorate that there was no need to worry about the economy. It was stable and jobs were safe. Instead, so went the propaganda, all energies ought to be directed towards building a society. Building a society? I can picture the biggest village idiot in Barbados asking “Was there a society before? If so, who destroyed it?”

By the time the 2013 general elections were over, a triumphant Prime Minister Stuart had missed two opportunities.

One, Stuart would have observed through his ‘historian’ eyes that Erskine Sandiford had used an 8% civil servants’ salary cut to get the economy off the rocks after he had crashed it in 1992. Owen Arthur, sensing an opportunity to build up political capital among civil servants, had responded by promptly amending the constitution and restoring the reduced salaries to their original level.

Knowing at the end of 2012 that the economy was headed for much more dangerous rocks than in 1992, Stuart should have attempted to regain the ability to cut civil servants’ salaries just in case the economic situation desperately required it. Put differently, it would have been worth Stuart’s political while to amend the constitution to reverse Arthur’s effect. Mind you, even with the ability to cut civil servants’ pay, given the damaged state of the economy, it would still be reasonable for anyone who is not a fool to expect significant job losses.

Politically speaking, the clean, quick across-the-board salary cut option was now out of the question. Stuart was now limited to the messier options of selected furloughs and firings.

Two, the general elections of 2013 provided another opportunity for Stuart to introduce fresh ideas and new talent into his cabinet aimed at battling the economic crisis. Again, he demonstrated that constructing a cabinet with an increased ability to understand and solve the nation’s economic problems was not one of his top priorities.

Before delivering his budget speech in February this year, the Minister of Finance alerted Barbadians to the fact that a yawning ½ billion dollar fiscal gap had opened up in the government’s finances. Remedial action needed to be taken swiftly and comprehensively, he argued. The Governor of the Central Bank, obviously sensing the stress being placed on the balance of payments, also recommended a fast acting solution.

Sir Frank Alleyne, convinced that the brittle economy could not withstand the shocks that would be generated by the effects of such a huge reverse multiplier, condemned such swift comprehensive action as madness. The Prime Minister, clearly not backing his Minister of Finance, opted for a time-consuming process of post-budget meetings and discussions with a view to minimizing or eliminating job losses.

Just a couple of days ago, the Minister of Finance announced that 3,000 civil service jobs will be eliminated by March and ministers and junior ministers of government will suffer a 10% cut in their salaries. To my mind, this action amounts to nothing more than an appetizer. The main course of pain, suffering, hurt, anguish and deprivation is yet to come.

Why do I say this?

Between 1948 and 1966, just over 130,000 babies were born in Barbados. These were the local representatives of the widespread post-world war II baby boom. The front wave of our baby boomers reached age 65 this year. From 2013 to 2031, our cohort of baby boomers will exert excruciating pressure on our health care delivery, social security, and private and government pension systems.

The repeated reckless, ignorant and irresponsible raping of our NIS fund means that government will have to tax the Barbadian population to the tune of over $2 billion, again, to provide future NIS retirees with the benefits their contributions paid for over their working lives.

Increased taxation of Barbadians will most likely provoke civil unrest, so the baby boom generation is destined to receive considerably reduced NIS benefits.

Additionally, government has promised generous benefits and gratuities to retiring civil servants. These pension promises have not been funded, so taxes will have to be raised to turn the promises into monthly pension checks. That will not happen.

Clearly, the quality of retirement life for civil servants who will be depending heavily on NIS and government pensions is very, very uncertain at this stage.

The IMF has repeatedly cautioned government that it will have to seek a private sector solution to the CLICO crisis so as to minimize the use of government funds. Since 2009, it is possible that many of the younger, healthier CLICO policyholders have lapsed their policies because of the great level of uncertainty. If they did, a toxic portfolio heavily weighted with older uninsurable lives may be all that remain. With each passing day, a private sector solution to the CLICO scandal thus becomes less likely.

Conclusively, I would like to stress that in Barbados, some problems and issues emerge within government, get outsourced and solved (e.g. .The Alexandra School Affair), whilst some get outsourced and remain unsolved (e.g. The Barrack Affair and the CLICO Affair).

Serious national economic problems that emerge and remain unsolved get outsourced to the IMF. Each time, we, as a country, went to the IMF, the economy was in a worse position than the time before and the remedial medicine became more bitter and difficult to swallow. I cling tenaciously to the view that the Barbados economy in 2013 is much, much more damaged than it was in 1992. Cutting 3,000 civil servants and the salaries of ministers will not get us near to solving the problem.

145 thoughts on “The Wolf is at the Door

  1. Observing | December 15, 2013 at 12:42 PM

    the next statement from the PM will be his Christmas message. Lol.

    • We have made the cuts how are planning to grow forex?

      The PM mentioned that we have been in similar situations in our history but there is a reality, the way the world is found business has changed. Our plan to stay with tourism and IB, what does it bode?

    • Now we have made the cuts how are planning to grow forex?

      The PM mentioned that we have been in similar situations in our history but there is a reality, the way the world is doing business has changed. Our plan to stay with tourism and IB, what does it bode?

  2. @ David | December 17, 2013 at 7:09 AM |

    The PM speaks with a forked tongue.
    He has previously stated on numerous occasions- to describe the state of the economy or to justify his administration’s slothful inaction- that the international recession affecting the country is unprecedented and even worse than the Great Depression of the 1930’s.

    His previous claims of being in uncharted economic waters do not gel with his new refrain of “we have been here before” comparison except in the case of the 1991-1993 period of economic mayhem and dislocation brought about by the same tissue of lies, deceit and piss-poor management.

    He should follow his predecessor of that same ‘déjà vu’ 1991-93 period and undertake with haste a programme of divestment and outsourcing to reduce significantly the role of government in commercial activities and provision of services more efficiently produced by private enterprises thereby limiting its role to that of a regulatory “Big Daddy” and referee.

  3. @ Miller
    It is clear that the PM is a joker who is WAYYYY out of his league. He probably would make an excellent Sunday school teacher or something so….
    However, for an alleged Anunnaki, you yourself does REALLY talk some shiite too…. Ya could really STFU* if you can’t come better….

    What Divestment what!?!
    So when your family face hard times your plan will be to sell off all the assets like your house, insurance, car, land etc to people like Bushie who have money…?? …so when the money from these “sales” is gone – what the hell will you sell then? ..the damn children?? Steupssss….

    There is NOTHING wrong with government owning these national asses on the people’s behalf……what needs to change is that HONEST, INTELLIGENT, COMPETENT people must be put to manage and operate these entities…
    People who have the County’s interest at heart…. Instead of the lotta thieving morons and bribe-takers currently looking to exploit the brass bowl mentality of Bajans…..

    Additionally, those managers who fail to achieve set targets should be IMMEDIATELY dismissed. If ya can’t do the job DONT TAKE IT …!

    You only chirping this divestment shiite so that you and your moneyed cohorts can now grab the family silver cheap cheap and go on to amass millions at the expense of poor Bajans….. SCAMP!!


    * STFU – Stop Talking Foolishness U. 🙂

  4. This morning there was a discussion on BBC’s on the politics of “UGLY” PEOPLE!




    It’s one thing to be “ugly” but to truly lack “CHARISMA” is inexcusable!


    What’s worst than being “UGLY” & lacking “CHARISMA” is to be “BROKE” and not have a clue how to “REPLENISH” what was lost due to mismanagement!

    It’s like most of our politicians – they have not only proven reckless “STUPIDITY”, by operating in a “BROKE” dilapidated system but moreover, Barbados politics has become the “SICK” man of the Caribbean.

    So I guess being “UGLY” is not half as bad as being: STUPID, BROKE & SICK all in the same breath and with no hope of anything changing anytime soon!


  5. @ Bush Tea | December 17, 2013 at 8:36 AM |

    Bushie, you could cuss the miller until your tongue explode in your mouth it wouldn’t change a thing.
    Yes, brass bowl, cuss the miller. You were doing the same thing with the layoff proposal.
    Listen backward bushman, it is NOT the miller alone who is proposing divestment of some of the state-controlled assets but also the Donville Inniss and MOF at the behest of the bailiffs for the country’s international lenders, that is the IMF.

    It is precisely because of the abject lack of “HONEST, INTELLIGENT, COMPETENT people” to manage and operate these entities that the country has turned into a PARO State. Instead there is a “lotta thieving morons and bribe-takers currently looking to exploit the brass bowl mentality of Bajans” running things in the ground.
    Deal with that!

    Do us a favour Bushie. Instead of calling on Caswell to fix the governance problem in Bim why don’t you be one of those “people who have the County’s interest at heart” and get off your lazy black ass and start the ball rolling and stop with this armchair leadership you seem to get your kicks from?

    All I am doing Bushie is drawing to the attention to those of any intellectual worth the inevitability of what is before the country as far as the government’s future role in the economy is concerned.

    Don’t wait until the situation gets so bad that the terms and conditions of the inevitable divestment of the assets are forced upon the government; just like the Layoffs.

    You would be doing yourself a huge favour in terms of a reality check if you were to spend some time cogitating on the serious ramifications embedded in the following extract from the MoF’s recent speech to “Parliament:

    “Additionally Mr. Speaker, earlier this year, the Ministry of Finance formally requested technical assistance from the IMF’s Fiscal Affairs Department in two critical areas of government’s operations: Tax administration, and fiscal/operational reform in the key statutory entities which rely on central government for large transfers for their operations.

    For some time now most internal and external examiners have expressed deep concerns about both of these areas as key examples of parts of government’s operations which exhibit unacceptable levels of inefficiency and dis-functionality resulting increasing financial burdens to the state.

    I am happy to announce that the Fund has accepted the requests and starting next month, the first team will begin its examination of the fiscal and operational challenges of some of our key statutory entities

    In anticipation of that and in an effort to advance and concretize this work, the Ministry of Finance will assemble a high level task force of senior finance, business and accounting experts to work along with the Fund’s team to finalize a reform agenda for the selected entities to be presented to the Minister before mid-year.

    I also anticipate that very shortly the Fund will identify a team of experts to conduct the long overdue comprehensive assessment of the direct and indirect tax systems in Barbados with a view to advising government on major reforms necessary in both tax policy and administration.”

  6. @ DAVID
    “We have made the cuts how are planning to grow forex? The PM mentioned that we have been in similar situations in our history but there is a reality, the way the world is found business has changed. Our plan to stay with tourism and IB, what does it bode?”


    David, tourism & IB have put monies in the kitty for decades but short-sightedness and a lack of “VISION” & forward-thinking have got us to this destination point. The BLACK, elite Bajan political mindset is still stymied by what has plagued AFRICA since post-colonialism!


    Other than Botswana who have been rigorous about stemming CORRUPTION and have worked assiduously to make its economy as fluid as possible – so as to offset the tremors of global economic seismology!

    Just as was previously sited: IT’S THE ECONOMY STUPID!

    In the same breath: IT ABOUT “leadership” AS WELL STUPID!

    David, when we had the time and things were “good”; when the sun was shining we should have reinforced the roof – we should have made the investments in 21st century industries (e.g) medical, robotic & other cutting-edge technologies including self-sufficiency in the development of solar-cells; social media development; HITECH food R & D & manufacturing; health tourism; agro-food security; public “WATER” transportation between island “hubs”; global development of creative & culture industries; and this is merely the tip of the iceberg!

  7. GP……’s really annoying that they are so many political parasites sucking the blood of the taxpayers with no valid reason and none can create a damn job, they all continue to burden the taxpayers while calling themselves Ministers and Senators, all they know is to sprain their brain to raise taxes a la Sandiford-Garner…..add burden to the taxpayers……..political parasites………i have no patience for that lot.

    Enuff………bobool is a part of life in Trinidad, but all the companies are wealthy and the country has money to BURN, do some research and see how many companies Trinidad gov and Trinidadians own around the world, then tell me how many there are from Bajan governments, black bajans, then we can dissect the difference from there going forward….

  8. Yesterday PM Stuart statement was one Of compassion complimented by his and the parties trust in the barbadian people. his tone exemplfies that leadership must be one of responsibilty first and foremost to the people especially to the less fortunate.. it is no happenstance that at this time in crisis that the role of PM was afforded to HIm. it also bears well to point out that in such adverse times a voice of calm ! patience and compassion isnecessary to ride these troubled waters.PM Stuart is that voice.

  9. ac…..maybe you can tell us if PM Stuart, SInckler and retarded Worrell from the Central Bank will continue to show compassion and allow Parris to export his 8 million dollars from Barbados to some lucky country that will promptly FREEZE IT……….or they can show compassion to the CLICO policy holders and have that 8 million FROZEN right in Barbados so that the policyholders can stand a chance of getting back their money.

  10. @ Miller
    “…It is precisely because of the abject lack of “HONEST, INTELLIGENT, COMPETENT people” to manage and operate these entities that the country has turned into a PARO State.”
    There is your error!
    THIS IS ACTUALLY not so!
    ….there ARE honest, intelligent, competent people who CAN manage our entities, …but they are stymied by the crooked politicians and businessmen who currently behave like PAROS.

    While YOU now want to sell our remaining silver to these damn PAROS, Bushie wants to lock their asses up – and encourage the honest, intelligent and honest talent to come forth….. 🙂

    Caswell is man enough to lock wunna up….
    The problem with Bushie is that he is too much like GP…..
    The bushman would opt for surgery……and hang all yuh!

  11. @ Bush Tea | December 17, 2013 at 10:13 AM |
    “Bushie wants to lock their asses up – and encourage the honest, intelligent and honest talent to come forth…”

    If you are that serious why not start like a gravedigger, at the top?
    Let us hear you make a call direct to the pseudo Boss man whom you think is the greatest leader since EWB to stop protecting his pal Greenverbs or Sunny Pookie and let justice take its course?

    With all of that damn mouth you have let us see you call on your incompetent lying friend to contribute to a governance environment of integrity and justice that would “encourage the honest, intelligent and honest talent to come forth”?

  12. @ DAVID

    My cousin Floyd & his wife Gina are currently in Barbados on holiday! Floyd took a pic of Gina on the boardwalk yesterday and not a single person other than the 2 of them seemed to be there.

    What happen David?

    Na tourists in BIM or what?

    It’s XMAS!

  13. The next and another important step is that the DLP get putting pressure to bear the tax cheats sending a stern and firm warning thatb barbados financial houses must be kept in order given the reality that others are asking to sacrifice no stone should be left unturned in getting monies that are over due by these tax cheaters. the TIME IS NOW……go get them…….Sinckler..U got nothing to lose……..

  14. @ ac | December 17, 2013 at 11:35 AM |
    the TIME IS NOW……go get them…….Sinckler..U got nothing to lose…”

    Let me put you in your silly little place by wrapping a roll of masking tape over your lying dirty mouth.
    Would you also egg him on in any investigation of the tax evasion schemes of Leroy Greenverbs Sunny Pookie?
    The man owes millions of dollars in income tax. Why don’t you highlight that too?

  15. Yesterday PM Stuart statement was one Of compassion complimented by his and the parties trust in the barbadian people. his tone exemplfies that leadership must be one of responsibilty first and foremost to the people especially to the less fortunate.. it is no happenstance that at this time in crisis that the role of PM was afforded to HIm. it also bears well to point out that in such adverse times a voice of calm ! patience and compassion isnecessary to ride these troubled waters.PM Stuart is that voice.

    Did he know this before the Last election?

  16. The BLP yardfowls wouldn’.t understand compassion if it fell like a ton of bricks on wunna head cause wunna been calling for these layoffs from 2008 and now trying to use the same measures as politicial Mileage but yuh know what the people can tell truth from deceit.

  17. ac…….as usual you are wrong THE DLP HAS KNOWN OF THE PENDING LAYOFFS SINCE 2008, SO HAS THE BLP and all yall LIED to the taxpayers, now yall got nothing left to lose cause credibility gone not that there was any to begin with, only the taxpayers have everything to lose because of you LIARS.

    David….unfortunately the IMF austerity programs will have to run their courses, note i used the plural because there are usually more than one program and this is just the beginning for Bim, before a new way forward can be forged.

  18. HA! HA! but the point is that the kept their word and held thes people hands for six years any how that u woukd not understand………

  19. ac have you ever heard the expression “tough love”? If the government had acted when it was supposed to, and long before we arrived at this parlous state of affairs, then the pain would have been much, much less all around. This so-called “compassion” that you talk about was nothing less that procrastination masquerading as “compassion”.

  20. Yeah peltdown “tough love”” now this love has been extended to all starting a few months ago and topresent,However when the “tough love started the BLP said that the DLP was treating the poor with duisregard. Wunna can,t have it both ways. The fact is that these decisions must have a level of balance not to damage one side over the other and the PM took much of that into concern before the lay offs.

  21. Yuh know what uh all could shout as loud as you want about LIES and promise the fact is that the PM demonstrated and acted upon that promise until better could,nt be done and that is sufficient to show that he is a man of his word.

    • @Peltdownman

      Ac perhaps and that is a big perhaps may understand the analogy of a gangrene infection where an amputation is usually preferred to save the body. The longer the wait the harder it is to arrest the infection.

  22. One thing about conservatives it is hard for them to understand the nature of a human problem however would use ridiculous/ananlogy to suffice here is a sitiation where thousands of households would have succumb to a six year of hopeleness and david compares this issue to an individual having a sore foot. the point is that there was plenty festering involved debt and societal and the govt took it upon itself to contain both in a humane way.not forgetting that measures where also put in place to tackle debt

    • @ac

      As stated before you are clueless about what happens in Barbados. In 1991 thousands of civil servants were sent home and others endured an 8% cut which provided the opportunity for the economy to recover AND help some others to start out on the entrepreneurial path. Also this same government employed hundreds of political lackeys this year knowing that it would jeopardize the nation’s social security to do it. The IMF has had to come in to dictate at this stage. BU looks forward to the GoCB forth quarter report.

  23. Lord come for yuh world!

    The BLP yardfowls crowing loud,loud loud like they just get some scratch corn.

    It is clear that they happy they can now scream and say ‘we told you so!’

    A more responsible and patriotic opposition would be more restrained and sober in their approach but owen,mia,dale,payne and the lot ain’t care a shite bout the very people they pretending to shed crocrodile tears for because as we done know,they dun got all the people money tief way and lock up in swiss vaults and in the caymans and dem places.

    All they want is a chance to mek a lil more for the grandchildren and for sunderland and dem fellas to get a lil piece.Ha,ha,ha muh belly!

    You notice that Owen and Mia sreaming and shouting but they are not saying what policies they would have taken.

    For those who are smart and listen like I do to the non partisan man in the street I notice not a fella ain’t condemning the government in any large numbers.

    Remember all 2011 and 2012 and leading into 2013 when this blog was hot ,hot hot about how the people fed-up and going to vote out the dems and vote in the Bees and yet on the ground the people were quiet,quiet quiet, and then wax palax.Boy wuh yuh gone and

    If greedy wait hot will cool.2018 is a long,long,long time.Enough time for the economy to get tek apart and mek back up again.

    Wuhloss muh belly.

    The woman marchan from that foreign organisation made some astute points:

    1. All them downgrade reports all close by saying the same thing – Barbados is stable.

    2.She is confident that the indicators point to a recovery in the near future for this blessed lil island.

    No matter how high the paling cocks and the naysayers jump,they will eventually still got to land back on this very rock

  24. @ Common sense is not common

    We have been hearing that story for SIX years!! The tourists arrivals were suppose to be up in August and October and what happened? Stuuupse. Pellets and teargas in the hands of persons like you conveys nothing but fear. You people are willing to do anything to hold on to power, and I mean anything.

  25. @The Transport Board is like a gangrenous limb we trying to maintain for cosmetic purposes but we know it slowly killing us. The transport board MUST be dissolved in its current form!!! prepare the sector for total liberalization, subject bus fares to be under the FTC and later down the road form a new smaller transport board if need be!!! As prime minister I would have said we have gone this far and no farther with the Transport board. It is the pinnacle of inefficiency in Barbados.

    Nuff big words.

    What you really mean is to much tiefin’ in dey

  26. Agree that the transport Board will have to restructure and all the political appointees who are unnecessary and not producing will have to go.

    ALL MPs salaries must be cut by 10%.

    NCC and Drainage must be slim down and made efficient.

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