Submitted by Douglas
Chris Sinckler, Minister of Finance (l) Fruendel Stuart, Prime Minister (r)
The recent report by the Governor of the Central Bank on the current economic performance indicates that the bottom has not fallen out of the economy as the leader of the opposition would have hoped. Yes, the economy did contract in 2013 by a mere 0.2%. A government which was able to control the decline in the economy after our foreign reserves dropped from an average of 19 weeks of import cover to the lowest of 13.4 weeks of import cover deserves some credit for appropriately managing the situation. At the end of the year we were able to restore the foreign reserves to 15 weeks of imports.
This DLP administration deserves credit for sound financial and economic management of the economy of Barbados during the economic recession. We have done an effective job to stabilize the economy and minimize the decline in growth. When compared to previous economic recessions which the country has faced over the years, there is no precedence for such challenges in the Barbados Economy.
We did not adopt a mentality like “Chicken Little” (we leave you to decide who is Barbados’ “Chicken Little”) preaching doom and gloom and warning friends about economic peril. Instead we moved with great haste to develop and implement measures to correct the situation and place the Barbados economy on a sustainable growth path.
We in the Democratic Labour Party firmly believe that, “Cocky Locky”, “Henny Penny” and “Turkey Lurkey” have all lost confidence and faith in “Chicken Little”as well.
To read the full article:
http://www.dlpbarbados.org/site/on-with-the-peoples-business/
https://www.facebook.com/DLPBB
Can anyone tell me to what extent the latest international loans impact on the foreign exchange figures mentioned here? In other words, do we have foreign exchange in the bank because we have just borrowed it, or did we earn it?
Bla bla bla. If only people knew the extent to how serious are Barbados’ economic woes.
The relative spring in the report by the Governor of the Central Bank of Barbados appeared to contradict the national news and many posts on your website over the past few weeks, both of which, as a potential investor, I have followed closely. This placed me in something of a quandary – whom should I believe, the news and your pundits, or the Governor of the Bank?
My decision has not been made any easier by this post by “Douglas”. It appears to emanate from the core of the governing party – or certainly from a close supporter – and is highly self-congratulatory.
However, the post states that “there is no precedence (sic) for such challenges in the Barbados economy”, ignoring the fact that the present economic problems appear to have caught the government, which has been in power for more than one term, totally unawares. In short, these problems which have no precedent appear to be of their own design.
Furthermore, “Douglas” claims “we moved with great haste to develop and implement measures to correct the situation”. Against the backdrop of the facts as reported in the news, this intelligently translates as “once we eventually realised how appalling the situation was, we were forced to take panic measures”.
No congratulation is therefore due, but I presume we all know that already. However, the attempt by “Douglas” to ‘talk-up’ this dire situation has actually reduced my already low level of confidence in the administration. Can I risk my cash in Barbados? I very much doubt it. Would others reading this feel the same? I expect so.
This is an open blog, therefore we do not know whether or not “Douglas” really is a close associate of the government. His post may be propaganda from the opposition, designed to make the government look even worse – if so, this has been a success. However, whichever is the truth, people in my situation will never gain true confidence until we are certain that Barbados is governed by honest, intelligent and sensible people who are putting in place credible plans – however onerous – to ensure that the country is financially independent and politically stable in the long-term future.
I presume that my views will attract the usual rude and unhelpful comments. Please remember, though, that this blog is available to readers worldwide, and many of us are hanging on every word.
@ Interest from Overseas,
There are 3 Canadian banks in Barbados that would give you the advice you need if you are looking to invest in Barbados.
@ Hants
Many thanks for your suggestion. However, it behoves any sensible investor to look further than the banks for information and advice. Quite rightly, banks are in business to make money for their shareholders, which is possibly why one of these Canadian banks quite recently, I believe, overtly encouraged their Barbadian customers to buy new cars which they potentially could not afford. In my view, proper investment must take into account the whole environment of the country into which one is placing one’s money. I have always liked Barbados – hence my wish to invest – but I could not take that risk at present.
@ Interest from Overseas,
You can play it safe by investing in Canada and you can holiday in Barbados.
Barbados is still a great place for a vacation.
@ Hants
That’s a great suggestion, and I like your sense of humour!
However, I was under the impression that Barbados wants – is in dire need of – inward investment to balance its books and provide jobs. Are not some thousands of government employees about to be made redundant? I doubt if they will find jobs unless companies from overseas can be encouraged to invest real money in the country, and I don’t see much sign of that encouragement at the moment.
Note to the BTA and Hoteliers Temperature in Toronto
January 20-January 27 High [°C]
Monday, January 20 -8 Feels like -16 -17
Tuesday, January 21 -18 Feels like -28 -20
Wednesday, January 22 -11 Feels like -18 -20
Thursday, January 23 -9 Feels like -16 -13
Friday, January 24 -8 Feels like -15 -15
Saturday, January 25 -3 Feels like -10 -10
Sunday, January 26 -13 Feels like -20 -16
Monday, January 27 -9 Feels like -15 -15
Whoa;
“Interest from Overseas” sounds very much like a plant by Douglas.
@ are-we-there-yet?
You are entitled to your opinion, but remember that there are still honest people out here. If people post dishonestly, this blog loses its value and might as well close down.
I am amazed at the awakening of the Governor of the Barbados Central Bank. I don’t know who is more myopic, the governor or Mr Stuart. Quiet, often times is good, but the immensity of the calamitous state of economic affairs in Barbados, warrant’s the convening of great economic thinkers, from across all spectrums. Kicking the can down the road, temporarily places a bandaid on a problem, heading for herculean status. Visionary leadership, would be the minimum requirement, to bring to fruition the finacial resolution, needed to lift Barbados, and ultimately bajans, out of this financial abyss. The sounding of the financial trumpet, by the Governor of Barbados’ Central Bank, denoting minimal financial decay and the slippage of Barbados’ credit rating, acts only as yet another insidiously vicious miscalculation on the part of an inept, political party, the (DLP). Leader of the opposition Ms Mottley, does not have access to the credit rating agencies, that rate Barbados’ financial position in a macro-global situation. Hence, it is foolish to believe, that her motivations are to be disingenuous, and to see Barbados in economic retreat. Please, serious times require serious thinkers, not lilliputians who would espouse intellectually inept and presbyopic foolishness. Please we must pay attention to the present, so that we can pay attention to the future, for generations yet unborn. The mark of a society in decay, is an inability to care for its disenfranchised, the elderly, women and children. Those who have ears to hear, let them hear, so mote it be. May we all act according to truth, and be governed by the Supreme Architect of the Universe.
Interesting to listen to the debate about whether ministers should take a cut in salary. While Minister Inniss has responded with a rational view the reality is what are the inputs the populace see as a government showing leadership in austere times. If public sector and consequently private sector are paying the ultimate price, their jobs, how does he respond? What about the reality that this is the biggest Cabinet in our history which has oversight for a contracting economy.
my hands are FOLDED…………..DEMS NOW DEMS AGAIN.
All of them working so hard a la Inniss and yet nothing is getting done except to use the island’s children as guinea pigs, I suggest these ‘hard working’ Ministers of the DLP google……………. Food and Drug Administration HPV Vaccine…………… and get real close and personal with the horrors they will be subjecting the small and vulnerable children of Barbados to (there is a whole manual of horrors associated with the HPV Vaccine online for everyone to see), these ‘hard working’ DLP Ministers should be ashamed of themselves, I just hope not many children have already been vaccinated. Hard working yet not one of them did any research on the vaccine and if they did, not one of them cared enough to retract and pull it from the hands of Ferdinand et al. Unfortunately for Barbados, because of this matter with the ministers and the HPV Vaccine, Barbados is now being referred to as Badbados in certain circles in North America…..time to clean up their acts and cut the damn fat cabinet..
Interest from Overseas
Click the link to the DLP website at the bottom of Douglas’s piece
The entire thing is cut and pasted from the governing party’s propaganda
site
@DD
Finally!
So INNISS DOES DRINK RUM
He just say so on VOB
I ALWAYS THOUGHT THAT HE DOES BE DRUNK AS SHITE—-
TALK TOO MUCH NOT TO BE DRUNK —
TAIL FULL; ASS DRUNK
Not only does the DLP look silly posting articles like this which patently (as Interest from overseas says) do not portray reality, but the BLP is doing itself no favors either. What is Mia up to asking for marches and demonstrations against the job losses when we all know that they would have done exactly the same if they were in power? This kind of naked politicking just gives the BLP a bad name. They would get more support if they told it straight and said they support the DLP in its cuts, but regret that they have to lose so many jobs as a result of not having acted earlier.
@ St. George’s Dragon
…………………………………………………………………………………………..
I totally agree with you about the sudden influx of Forex to over $1 billion. I made the submission on Jan 16 pertaining to Central bank Projects:
“If the GoCB can’t get his quarterly review right – do you feel he can get 2016 projections right? How he can predict $2 billion in 2016. He said that Private Investments were the reason for the slump in FOREX. How come after a slump in FOREX up to the middle of last year he is now able to push FOREX over $1 billion. Who are the investors and where is the actual money. As a matter of fact where that influx came from? Will we see a stoppage of NIS withdrawals?”
People like “Douglas’ are taking us for a ride to nowhere with that cut and paste outlined by DD. In the final analysis, when the said loan is abused and redirect to outstanding payments, do tell the country where will the money come from to prop back up our forex.
We know for sure Sandal ain’t pay a cent as yet. Almond ain’t had to pay a cent for the property but do a little spring cleaning and fixing up a few areas. That we know can’t be over $500 million. So GoCB, come out and tell the country where that money came from.
I agree with the great Sir Frederick regarding Government trimming the amount of ministers. However, you can see the arrogance within the Government with Hon Inniss stating ministers have bills to pay. What about the people who are being sent home. 18 Ministerial posts within a 11 parish country. That’s what you call dumb economics.
The other thing I would hope comes out of this mess, is an understanding of the roles of the credit rating agencies and the IMF.
It really is not sensible to say that it does not matter when the country’s credit rating is cut. It does. It affects investment confidence, incoming foreign exchange, interest rates charged on Government loans and the general perception of Barbados as a well run country – or otherwise.
Similarly, the IMF is really not the big bogey-man which it has been portrayed as. It tells countries in straightforward terms what measures they need to take to correct their economic ills and retain their (higher) ratings. It also acts as a low(er) interest rate loan provider.
The Government has spent years saying the IMF is a demon; now it is doing exactly what the IMF said was needed, while failing to get access to the cheap money that could be on offer through the IMF.
cheez on bread wunna BLP yardfowls don/t wuk………..LOL…….wunna need to get off the palin and find some thing constructive and productive to do wid wunna time cause OSA couldn’t care two wukups bout de party he dey tearing and mauling it to death .. and ..just ass,,ing the cockroach,,,flying all ova de blog,,,,,,talking nuff sh..te…bout she luv OWEN AFFTA,,,,,,
@ Due Diligence
Thank you for pointing out that Douglas’ article is lifted from the governing party’s website – I had not noticed that. In fact, from my point of view, this makes it all look far worse. In a time of crisis, this party – or any other party, for that matter – should not itself be engaging in political banter at base school playground level.
@ St George’s Dragon
I am surprised that there is any misunderstanding in Barbados about the importance of international credit ratings and the usefulness of the IMF.
Barbados’ Credit Suisse loan of Dec 2013 (recently described by Nation News as “The Merchant of Venice Credit Suisse loan”) would probably not have had such onerous terms attached if the country’s credit rating had been better. This, in itself, should have been sufficient to dispel any misunderstanding about the importance of a good credit rating. However, this loan came on the back of a failed bond offer. Traditionally, government bonds are a very good risk for an investor, but that assumes that the credit rating of the issuing country reflects the fact that the country will be able to repay as advertised. A poor credit rating, hence a bad risk, is one factor that would lead investors to avoid a bond offer like the plague.
Furthermore, as you quite rightly point out, a country’s credit rating is a most important factor in attracting inward investment – or not. As you say, the credit rating affects “the general perception of Barbados as a well run country”. That is correct – a low credit rating is a warning to lenders and investors to delve more deeply, and that is exactly what I am doing at present.
Next, the IMF. When a country gets itself into financial deep water, and the depth continues to increase, it could take one of two routes:
First, it could try to maintain its proud independence in the face of adversity, perhaps borrowing on the commercial market or normally ring-fenced government assets, perhaps increasing the money supply, and drawing on internal expertise to manage the country out of the crisis. That might work in the short term, but in the long term the country will be required to continue to pay high interest rates on the borrowed cash – that, in addition to existing interest on previous loans. Therefore, this method has no chance of working unless the borrowed money is put into a project or projects that have a high chance of profit for the country, not simply used as a stop-gap for previous losses. Moreover, if this method is tried, and fails, it generally leaves the country in a far worse situation than before.
Second, a country could swallow a little of its pride – but make high gains in the area of perceived intelligence and common sense – and turn to the organisation designed to help in such crisis situations, the IMF. With assistance from the IMF, the country not only has the benefit of cheap-rate loans, but also the advice of external experts with the ability to view the situation from a fresh perspective. In short, a win-win situation.
I must admit that I was under the impression that Barbados was already going down the IMF route – with the sensible first step in reducing the excessive number of government employees as just the start of the pre-loan changes required by the IMF. It did worry me that the public announcement of this decision was followed by a certain amount of confusion akin to back-pedalling, and then by a delay in execution. But I presumed that the overall plan was to make a start to getting the house in order, then accept much-needed financial assistance from the IMF.
However, St George’s Dragon, you are telling us that the government is not, if fact, planning on taking an IMF loan? That’s incredible, to say the least!
take time out to get the picture