Notes From a Native Son: The IMF has got Sinckler and Stuart Cornered with Nowhere to Run (Part 1)

Hal Austin

Hal Austin

Barbadians are now getting some external scrutiny of the economic mess the nation is in and shining a torch in those cobwebbed corners is not a happy site. According to the recent IMF report, government has finally committed itself to a number of key proposals, but these still remain opaque and unarticulated, even if they had to be dragged kicking and screaming to admit there are in a deep economic hole. However they may manoeuvre, it is clear the offer of redundancies and a few cutbacks in spending are not the answers the economy needs at this time nor, indeed, do the growing army of un(and under)employ young people want.

The report itself admits this in its introduction, pointing that in December 2011 a previous IMF delegation had stressed that the widening fiscal deficit and debt were the key areas of concern and proposed a “credible fiscal consolidation plan” to resolve the issue. But, the DLP government asked for a postponement because of the general election, which, as we know, the DLP won. So, it is clear, that political chicanery won the day and the DLP deliberately misled the Barbadian electorate during the February 2013 campaign, especially its promise that there would not be any redundancies.

The reports also makes it clear that there is no available full information on financial performance of public enterprises, not only revealing the opacity of government, but, I suggest, not only hiding one of the key sources of heavy leaking of taxpayers’ money, but of gross managerial incompetence. The real problem with the Barbados economy, however, is structural, and deeply so: a public sector which is lacking in up-to-date technology, a working force that believes that taxpayers have a duty to keep them in jobs, a political culture that mistakes the ruling political party as the state, and a portfolio of small businesses and land that the state should not own but should dispose, if only to rebalance its finances. The only real reason for this ever-expanding portfolio of state-owned assets is the control it gives politicians, in terms of jobs for their supporters and a sense of personal social status.

With the ‘great’ IMF now delivering its sermon from on high, a bit Washington Consensus light, all froth but not substance, the DLP Government has still not made clear what its strategy for recovery is. As I write, the nation is yet to know how many people will be made redundant from the public sector, although the IMF states 13 per cent. Given the absence of accuracy numbers, it is very difficult to enter any serious debate or carryout a legitimate analysis of government policy. So, let us assume that there are about 30000 people on the public sector pay roll, 13 per cent of those will about 3900; so far government has said it will be sending home 3000 workers by the end of March. But this is not the end of the matter, since that will impact in a number of ways. Government tax take will diminish, however slightly, a matter that has so far not been raised, not even in parliament; most, if not all of these people will at some point be eligible for state benefits and there will be a drop in national insurance contributions. Consumer spending will also be down, leading to pressure on some parts of the private sector, which may lead to redundancies or at least wage cuts.

As the report states: “Central government gross debt has risen sharply since 2009. The debt-to-GDP ratio has climbed from under 60 per cent in 2009 to 94 per cent at end-September; including government securities held by the national insurance scheme (NIS), it rose from about 80 per cent to 128 per cent. “The gross financing requirement in 2013/14 is 15.4 per cent of GDP including the rollover of short-term debt. The deficit has been financed increasingly with short-term funds from domestic sources. “In the first six months of 2013/14, domestic financial institutions and the central bank provided the bulk of the financing in the form of T-bills, while the NIS provided about 11 per cent in the form (of) longer term debentures. “NIS holdings of government paper are estimated at about 67 per cent of its portfolio, above the guideline recommended in the 13th actuarial review to limit holdings in government securities to no more than 57 per cent.” It warns: “Going forward, the capacity of the NIS to absorb new government debt will be limited by balance sheet constraints as the operating surplus has declined to near balance.” The report does not make clear that the main reason why government has to depend on domestic credit is because with its record borrowing in the international markets will be prohibitive.

For the last five years the main developed markets – the US, Japan and UK – have had central bank interest rates of below one per cent. Had the Barbados economy not been in such trouble, it would have been relatively easy borrowing in the international markets at under six per cent, rather than a domestic market that is charging up to 15 per cent. Further, the report’s condemnation of the mis-use of NIS funds does not take in to consideration the contradiction of conventional investment strategies, especial for a fund with long-term liabilities.
We know very little about how the NIS is run, whether it uses passive or active managers, its asset allocation policies, who undertakes its research, the diversification of its portfolio, all this is kept carefully hidden from public view. Even investing 57 per cent of the NIS fund in government gilts, as the IMF reveals, is a bad strategy since market efficiency should dictate that the fund’s investment universe should be global, and it should have a proportionate percentage invested in accumulation (equities, to grow the fund), fixed income (gilts and corporate bonds to meet near-time liabilities), property, small amounts in cash and a similar amount in high-risk alternative investments. I suspect a lot of the lending is to do with political pressure and ignorance on the part of senior executives and the board of the NIS, a number of whom have no real professional experience in fund management although some may have academic familiarity with the process.

The report continues, and I quote because there have been points raised by myself and a number of other observant people on numerous occasions which are very similar. In paragraph 7, under the sub-headline: Monetary policy has not been consistent with the fixed exchange rate framework, the report continues: “A new interest rate policy was instituted in 2013 that made the three-month Treasury Bill rate the benchmark rate and directed the central bank to intervene in the auction market. “Under this policy, the CBB (central bank) absorbed about 44 per cent of T-bills issued in the first 11 months of 2013 and short term interest rates fell by about 50 basis points. Credit to the private, which had been contracting since 2011, nonetheless continued to fall.” Again, it is basic macroeconomics: the refusal of the foreign-owned banks to lend to small and medium enterprises, the key driver of the economy, was the main obstacle to financial intermediation. The central bank could have used its purchasing power of government gilts not to buy freshly minted short-term bonds, but to buy gilts off the banks on condition that the additional liquidity would have been used to lend to small and medium enterprises. Further, government, either through ignorance or stubbornness, has in fact refused to substitute that lack of bank funding with shadow banking or a strategically planned quantitative easing (on par with Obama’s funding of the Detroit car industry, which is now back on its feet) – the cheapest and most effective way of which was the creation of a post office bank (with a 17-strong established distribution network) or by introducing legislation to create a trade union/credit union/cooperative retail bank. So, there is a vacuum where an effective, well capitalised, well supervised and regulated banking system and monetary policy ought to be.

The other failing is that the government, like previous governments before it, has depended too much on the national insurance scheme as a piggy bank, which it can dip in to as it likes, and a mountain of commercial credit to pay for their programmes. This credit-based growth, as Lord (Adair) Turner, the former chairman of the UK’s Financial Services Authority and one of the most authoritative public intellectual economists in Britain, has led to rising leverage and debt overhang, a natural outcome of this credit-intensive growth. It is a policy based on a total disregard of the investment strategies and actuarial assumptions behind a hybrid contributory and pay-as-you-go pension scheme and ignores completely the scheme’s future liabilities. Part of the inept management of public accounts is reflected in the increase in the growing current account deficit, which the report could have said more about. Explained in simple terms, if the government gets Bds$100 in revenue during the tax year, but its expenditure is Bds$101, it is living beyond its means. This principle applies to households as it does to governments. The basic principle is for government to forensically audit its outgoings and cut back where necessary. This is true in principle, even if a government differs from a household in that it also invests for future generations. But that a government, fully aware of the global economic crisis, can still continue to spend taxpayers’ money as if it was going out of fashion borders on the fraudulent.

The other mantra which has captured the thought processes of most Barbadians is the redundant one of accumulating foreign reserves, presumably in preparation for an external shock of some kind. It is an obsession that has no basis in modern macroeconomics, the mantra of an evangelising old guard tat is convinced that financial economics has not moved on since the 1960s and 70s. This obsession with foreign reserves only serves to obscure the real shortcomings of the central bank’s reluctance to enter the futures and derivatives markets and its overall bad management of the nation’s finances. By entering the futures and derivatives markets the central bank will free-up much needed cash that can be invested in other more urgent and pressing assets. (Without overburdening this analysis, see: Joshua Aizenman, et al : “International Reserves and Swap Lines: Substitute s or Complements”, National Bureau of Economic Research, Working Paper 15804). Continuing to stockpile foreign reserves, in the vain expectation of some severe externality, is voodoo. By definition, we do not know what the external shock would be, but the last real shock the Barbados economy faced was on September 22, 1955, Hurricane Janet, and two years later the nation had entered a contract with the construction engineers Costain to embark on the biggest capital project in its history. Huge reserves will not be of any real use if the external shock is a new strain of bird flu from China, or some terrorist attack on Grantley Adams International Airport. The foreign reserves mantra is preached mainly by worn out economists who did their studying in the 1960s and early 70s and have not really freshened up their knowledge of macroeconomic theory since graduation. Some of them probably even continue to teach from their old undergraduate notes.

Global Economy:
But the world in 2014 is a different place to that in 2007/8. We have already seen China’s economy, for most of the last 14 years the most dynamic in the world, has recently returned growth figures of 7.7 per cent, most impressive for the majority of developed economies, but a wake-up call to what was the fastest-growing and largest emerging market in the world. As Jay Bryson of Wells Fargo has pointed out, at the end of 2012, developing nations accounted for 49.6 per cent of global GDP, and although 2013 figures have not yet been confirmed, it looks as if this figure will rise to over 50 per cent. This growth confirms what Pascal Lamy, the former director-general of the WTO called the Geneva Consensus, the increasingly central role that developing nations now play in global trade. These developments, the new normal, play on the blind side of the people who manage the Barbados economy and are responsible for monetary and fiscal policy. None of this figures in their analyses or debates on economic policy, what little discussion they have narrow-focuses on foreign reserves. It is like asking someone on the eve of the discovery of the internal combustion engine what mode of transport would he prefer, knowing full well most people would ask for a faster breed of horse. There is a paradigm shift, and has been with a vengeance since the early 1990s, in the way we manage national accounts and currencies, and the stockpiling and warehousing of foreign reserves is not it; even at a household level we no longer stash our money in a savings account, we invest, make it work for us. It has gone further than this. In the old days of the 1980s, when we talked about a developing economy we often meant one based on the development economic theories of Sir Arthur Lewis, Gerard M. Meier, Joseph Stiglitz and others. Modern developing economies are increasingly consumption driven, rather than just producing the raw material for a commodity-hungry developed world. We now live in a global economy in which 35 per cent of exports from developed countries now go to developing economies, up from 20 per cent in 2000, and that trajectory is going further north and faster. But a lot of this growth is based on debt, about US$8trn, an increase from US$5.7trn in 1997, as Lord Turner has pointed out. The world has changed and policymakers and academics who fail to keep up will be left behind.

The DLP government is learning the hard way that we now live in a globalised world and governments and their advisers can no longer operate in an opaque and deceptive way. Further, all economies, no matter how small, are now globally inter-connected, and a high wind one part of the world can lead to crashing waves the other side. It is relevant therefore to remember how the Asian crisis of the late 1990s occurred. All the key nations were linked to the dollar, all had huge current account deficits and falling foreign reserves. This cocktail of macroeconomic imbalances came tumbling down like a deck of cards once the Thai government decided to devalue the baht in July 1997. The Stuart government has not yet learned this simple fact of global economics and is still operating as if it is the repository of all wisdom when it comes to the financial economic government of the nation. Even though the IMF report should act as a wake-up call, it does not deal with the offloading of non-core assets, such as the state-owned Transport Board, a portfolio of under-performing hotels, a massive land bank, massive shares in LIAT, post offices, the inability to auction a television licence, an inability to collect VAT and national insurance. The decision to establish a revenue authority is not the same thing as collecting outstanding revenue. This is made worse when one considers that VAT is a tax paid at the point of business with the private sector acting as collectors for the state. All civil servants have to do is to collect the money, failing which the guilty party will be prosecuted and barred from running a business. It is organisational competence, not creating a new organisation, that is the real solution.

Equally, the lack of up-to-date and accurate information on the financial performance of public sector enterprises, including statutory bodies, is not a coincidence, but a deliberate attempt to mislead the IMF and the general public.
Any competent organisation would have produced annual reports, giving details of the business, future plans and its profits and losses, if only for internal use. The report’s authors also make a mistake of assuming that the financial sector is well capitalised, but has produced no evidence for this, apart presumably from central bank assurance.

But there is another way of looking at the banking sector (since there is no substantial shadow banking or non-banking sectors, apart from insurance), and that is to assume that the regulatory and supervisory systems are weak and that the banks manipulate a local light-touch regulatory regime lacking in expertise. How does the central bank carry out its stress tests? By examining capital adequacy and depending on the inadequate Basel III requirements? It is common knowledge that banks have one of the most flawed business model in modern capitalism, with some major international banks at the dawn of the global crisis having an asset to liability ratio of six per cent. Even local businesses have a minimum average ratio of 30:70. If any small business person had such a ridiculous asset to liability ratio and went to a bank to borrow money s/he would be chased out of the building. Banks are allowed to get away with this because of the discrepancies in their accounting practices. Banks do not have to explain in their annual reporting their liabilities in a way that any other ordinary business will have to. In this way they avoid runs, the main concern of governments, especially if the central bank is lender of last resort and will have to rescue troubled institutions.

But this is not the case in Barbados. It is almost certain that banks do not explain to supervisors or regulators their lending assumptions, therefore their capital adequacy is not properly explained; and, even if they were, they will tell the central bank that their foreign parent banks will cover any short falls. And they will get away with it, be they subsidiaries or branches because the banking regulatory and supervisory systems operate by deference.  The report’s authors have at times taken the self-confirming myths of central bank and civil service staff too much to heart, such as that Barbados is highly competitive. Although this is qualified, by pointing out that that is when compared with other Caribbean nations, it is really still disingenuous.

Its claim that ‘domestic’ banks appear to be well capitalised, lacks a clear definition since domestic is a mute point, given it also makes clear that the foreign-owned banks – with the parent companies of three are domiciled in Canada, two in Trinidad and Tobago and one in the US, with the assets of the Canadian-owned banks accounting for 75 per cent of total banking assets. This raises further serious regulatory issues since it is not clear who regulates local banks and, if the central bank, as is the legal position, who the real regulator is. To be competitive, an island 166 square miles and in which most official business is concentrated in the space between the City, Bay Street, Whitepark and Warrens, it should not take longer than five working days for an entrepreneur to register a new business. Where there is a cash purchase for a property, the entire process should not take longer than two working days for the sale and purchase of that property. Of course, all this is not the civil servants’ fault, although they are responsible for a large part of it. The bulk of it is caused by lazy, and in many cases, dishonest lawyers who tend to operate like a Mafia.

Good government would break up this professional monopoly by separating out advocates, those with permission to appear before the high courts and the Caribbean Court of Justice, and legal consultants, those permitted to give advice in their chambers but not to appear in court. Government should also introduce licences for conveyancing, labour law specialists, health law specialists and others, people who on qualifying would have the right to appear in the high courts representing clients on those specific subjects. Of course the lawyers and their supporters will scream, but this is one way of introducing a new professional competitiveness in the economy. We also need transparency in governance, with politicians and senior civil servants who appear to be living above their official incomes explaining the source of their wealth or having it seized and face criminal prosecution for abuse of public office. In real terms, Barbados has had nearly five decades of under-performance, years of lost productivity, which are now creeping up on us like disease in old age. We know our knees are not what they used to be, but we hardly remember when as teenagers we were kicking hard breadfruits around the playing field. Those days off from work, and when at work talking more than working, taking the children to school and then arriving at work just before lunchtime, not answering the telephone and leaving work early, all these and more will eventually come back to haunt us – and they have. One black hole that is not talked about by unions, policymakers or politicians is the massive cost to the taxpayer of absenteeism, but again the IMF appeared to have overlooked this. It would be worth while if the government commissioned a report on this from the university.

As Dilaka Lathapipat and Thitima Chucherd, writing about the Thai economy reminded us of developing economies: “In addition to building up a highly-educated and well-trained workforce, having a well-functioning labour market is crucial for a country to enhance its economic efficiency and competitiveness.” The authors also remind us of the definition of labour market efficiency: flexibility, controls on wage fluctuations, easy re-allocation of workers. We only have to look at the public sector trade unions, like the 10 per cent pay claim put in by the National Union of Public Workers, just months before a massive redundancy programme.

Of course,, most of these approaches are outside the IMF remit and are rightly the concerns of the ruling party, but it is basic macroeconomics that unless there is an improvement in productivity there will be very little or no growth.
It is also important to note that poor productivity in Barbados, in particular the public sector, is not just cyclical; it is rooted in deep structural flaws and in a post-independence culture that the state will provide. Making a few people redundant without fixing the fundamental problem is just pushing the can down the road. The machine of state is grinding to a halt because it is out of oil and it needs fixing.

In the final analysis we urgently need a new national mind-set, which places things such as fashion, cruises, whisky, four-by-four petrol guzzlers, foreign holidays, home improvements, and other materialistic trivia come second to securing one’s financial future.  We have to get real as a people and as a society.

  • Reading: Rene M. Stulz: “Should We Fear Derivatives”, NBER Working Paper 10574, 2004;
  • Neil Irwin, The Alchemists: Inside the Secret World of Central Bankers

172 thoughts on “Notes From a Native Son: The IMF has got Sinckler and Stuart Cornered with Nowhere to Run (Part 1)

  1. Hal, I will concede that the USA is no longer even close to being as dominant a world power as it was. Furthermore, had this country been a non-white country, it’s global dominance would be a thing of the past. Your point is very salient in that, most of the world’s countries really want to run as far away from the US dollar as is possible. The extraordinary economic catatrophe visited upon the world was backed and financed by the inepitude of Wall Street. The global economy was incapcitated by the malfeasance of the American Poodle Tony Blair. Had he not been so inept, the Euro would have surpassed the dollar as the world’s reserve currency. Relative to Africa, the instability and ethic cleansing from Nigeria to the horn of Africa, will plague any foreign investment on Africa’s continent. China’s best opportunities will be found in South America, and the Caribbean, which will in years to come release more natural gas reserves than anywhere else on the planet. Just one quick retracement Hal, Argentina, has always been involved with revolution, and has never settled into really being South American. Of all the South American countries, Argentina accepts its connection to its European colonizer Spain, more than any other Spanish speaking South American Country. Hence, Argentina has never been able to find its South American identity. The vast majority of South American countries do not trust Argentina, for the most part.

  2. @ Victor

    Ahhhh! You have hit a point about Argentina and one that can get me worked up. Why do you think so many Argentinians have Italian names? And the Welsh in Patagonia? How about all those farms (ranches) owned by wealthy Brits?
    What has happened to Argentina’s black population? Whey have they stolen the tango from black people?
    Victor, black people in Latin America is a pet subject of mine and I can bore the nation of Barbados on it.

  3. Hal buddy, I am very honored to learn from all of you. I am like a kid in a candy store, just ready to soak up the knowledge. Thanks for your fine contributions, and your wide expanse of knowledge.

    • @Miller

      Your reference to credit unions being allowed to buy into TB. Hasn’t the IMF in its recent report indicated a preference that state assets be purchased with FDI? There is obviously a balance to be found given our voracious and insatiable appetite for forex.

  4. My preference is for Barbadians to buy the Transport Board, and any state assets, including a large part held by stakeholders.
    The IMF is going back to an orthodoxy about FDI. Look at the UK, with most of its businesses owned by foreigners.
    The people to own Barbados are Barbadians.

  5. @ David | February 17, 2014 at 9:33 AM |

    So this is the stage the country is at, being dictated to by the IMF just because of vision-less leaders on both sides of the political fence?

    The IMF is not really taken up with state assets that have no forex earning capacity like the T B. The IMF just wants to see the parasitic T B off the liability side of the fiscal balance sheet.

    They are more concerned about the State-owned commercial entities like GAIA and the Port where the country can earn or save forex to pay back its overseas creditors.

    The TB needs to be privatized, preferably by way of a vehicle to facilitate black economic enfranchisement, in order to bring about greater efficiencies and managerial competence even if it requires some measure of justified State subsidy because of its ‘social good’ importance.

  6. Put barbados in the hands of the BLP right now and in four years one woud see who owns barbadois. why u think DE has become the “darling of the BLP and OSA Loving his UAE plan. w

  7. The economic hit men in the form of the IMF have arrived, and nothing will ever be the same, again. It is perhaps more of a destabalizing affect to have remnants of an old colonial master in the IMF standing over your country than anything else. I agree with Miller, in his assertions, referencing how things were in Barbados, and that the country could very well be returned to a sad state of affairs. Can someone out there tell me if this global mess is fixable, and how? Hal remember the major cause for the American Great Depression, it was centered around the direction of the interest rates. Hal I’ve read and looked at your concepts and writings, permit me to say this, an economy like the US which has to receive a financial stimulus of Eighty Five billions dollars a month, cannot be doing something right. What have these world leaders been doing with their economies? I want to ask you very learned people, if you believe that the causative effecst of the 911 situation perpetuated the untenable circumstances, that the United States has found itself in. Would any of you support the concept that when Wall Street was closed for an entire week during the 911 situation, and coupled with two wars, the USA was economically devastated. Can Barbados’ economic woes be linked to the USA financial mismanagement?

  8. @Victor R Callendar

    The woes Barbados has can be mostly traced to having its currency pegged at 2 to 1 to the US$ without any ability to trade the Barbados dollar or exchange it for the goods we need. The Trins dollar is about 6 to 1, the Guiana 200 to 1, the Jamacian 100 to 1 and the East Carib dollar 2.7 to 1. We have simply made ourselves non competitive and spend more than we bring in. Who would invest money in a country where there is a very good chance you will never be able to take any profits back out in the currency you used to invest it in.

  9. @Miller etc.
    The TB needs to be privatized, preferably by way of a vehicle to facilitate black economic enfranchisement, in order to bring about greater efficiencies and managerial competence even if it requires some measure of justified State subsidy because of its ‘social good’ importance
    Sounds good on paper but the privatization of TB would be the death knell of public transportation as we know it. It would immediately penalize those living in far flung districts as the motive becomes profit driven why would a business continue with a scheduled route to Bayfield when they could go to Oistin’s for the same fare? What would be the alternative? Staggered fare where those living further would pay more? Unless that is where you see the State subsidies kicking in and wouldn’t we be in the same boat?

    The Transport Board has some major problems and among them are political interference throughout the years and collective bargaining. When you have a pensioned off Bank Manager who has never managed anything beyond a ten man Branch in charge of one of the major conduits for public good in Barbados you should expect problems. When you have collective bargaining where you can’t get rid of the bad apples you will have problems. Coupled with the fact that TB buses compete with the mass of private cars on the crowded road to get their passengers moving no wonder many people opt for private transportation to get where they are going so with privatization we could expect more FE to leave the country. Perhaps the notion of dedicated lanes for public vehicles e.g. buse,s ZR’s taxis etc. during rush hour may be a possible solution.

    There are some things in ordered societies that the State has to manage they are Health, Education and Transportation, if it abandons any of those duties it would be a gross dereliction of duty.

  10. @balance
    “I was trying to keep out the quagmire because I wouldn’t know where to turn if I start getting licks like Miller but to he credit he trying but licks coming too fast and furious and Prodigal like he keeping far too but seriously though what am I to believe”,

    …………….What licks, what?? balance. I read BU daily, blog when I get angry at the nonsense spewed on BU from the likes of these newcomers. They come and spew their DLP rhetoric for a few weeks and then move on or change their monikers like To the point, Warinka, 1000lbs of blubber, observer and I could go on and on.

    Miller is handling these disillusioned dems admirably. I admire his patience in responding to them. I cannot be bothered to engage these dems….they are so ashamed that their beloved party is so inept, incompetent, lied, destructive, arrogant and every adjective you can find……….that they are lashing out at anyone who does not sympathise with their DLP.

    I feel their pain. LOLLLLLLLLLLLLLLLL!

    Miller please do not bother to engage this newbie on the block or the other brass bowls. Let them deal with the Estwick fiasco.

    This DLP is the worst government ever and they do not want to admit that. They prefer to go back to their favourite whipping boy……the BLP do this, the BLP do that……………forgetting that Estwick said last week that the DLP and the DLP alone is to be blamed for this mess the country is in. They can talk until the cows come home on BU, we have never been in this mess during 1994-2008. Bajan held their heads high and were progressing…..not like now where people are in despair.

    This newbie now comes on BU to say that the opposition is not offering any solutions……… friend, the BLP is not the government, the DLP bragged that “we win”……….., what about “we dont want to hear nothing from wunnuh, now is we time, any ideas wunnah got, keep to wunnah self……….what about this that this newbie does not understand?

    Did the PM not say a few weeks ago that he does not want to hear from any eminent person…… Chris Sinckler, John Boyce, Dennis Kellman are who he listens to?

    Did not the PM say last week that he does not listen to anyone who offers advice or criticism…………he called us nuisances!

    And we still have people on BU still defending these brass bowls! Frigging unbelievable!

  11. True dat the IMF are the economic hit men but we borrow and must pay back….. but on the horizon we have some oil bandits lurking outside who wants to get these hitmen off ouur backs and take all and everthing in its way….and OSA have alreay send smoke signals by way of DE to them…can.t getmuch better ior worse than that

    • @Miller

      Understand the view that TB may not be attracted to the foreign investor. The sad reality is that Barbados finds itself in a dark place where the priority to shed the non performing will drive decision making and not what is the best fit if we are to accept Bushie’s argument.

  12. This country is dead broke. This DLP government has been told by the IMF that they need to cut spending.

    Why in God’s name is this government now sending another ambassador off to China again when we have Sir Sandi in today’s paper saying that he had about 12 projects which he could not get implemented.

    To have an ambassador in a foreign country is very, very expensive……these people live high on the hog…… mini gods in their own fancy world and the designated one seems to me as one who will enjoy the perks of the good life having lived it already.

    If what is reported is true that the Duke of York is to go to the UN….my goodness, what a farce! Now we understand why these unions took the position they took………… sold out the workers for a taste of diplomatic sweet life.

  13. @ Sargeant
    “The Transport Board has some major problems and among them are political interference throughout the years and collective bargaining.”

    True Sarge.
    …but an even bigger problem is also highlighted in your assertion that privatization would immediately put in place profit motivated processes “such that people who live far away would be disadvantaged…..”

    Boss man, that is called COMMONSENSE. Bushie cannot understand how wunna could feel it is OK to run a business like a free-for-all ….. and expect that it will not bankrupt you…!!!
    There is no need for any privatization….. What we need is GOOD management and less political idiocy.

    Only a jackass would expect to run a big able bus down to checker hall for $1.50 so that two party animals can get home after 11 p.m.
    While it is fair to have the general society subsidize public transport, that does NOT mean that the political jackasses should then give (sell) licenses to ZR operators to compete with the state transport board ON THE MOST LUCRATIVE ROUTES…..!

    The reason we are broke has been documented LONG ago….
    …A fool and his money are soon parted…

  14. @ Prodical Son
    Bushie notice that you pelting some hot lashes in the bushman’s tail…but you playing you smart…
    …somehow when you advised Miller to “ignore the other brass bowls” Bushie detected a snigger in your tone….

    No need to kill the poor bushman…just a messenger…
    Tek care…. 🙂

  15. @Bush T
    Only a jackass would expect to run a big able bus down to checker hall for $1.50 so that two party animals can get home after 11 p.m.

    I want those “party animals” to take the bus otherwise they will be on the road and wipe out some poor soul who is making their way home after their shift at the hospital or some other establishment but you didn’t mention the shop clerk who is working for minimum wage at some Bridgetown store and who has to make the daily trek. Everybody can’t live at Eagle hall corner, Baxters road or Collymore Rock. There are some things that Gov’ts and civil society have to pay for and the taxpayers have to grin and bear the cost because in the long run it will be better for the country and better for the people.

    Let’s take your argument further, some people eat and drink themselves to diabetes should we penalize them when they show up at the hospital? Should we say “‘Skippa yuh bring dat on yuhself we aint treating you unless yuh got de money to pay”.

    Health, Education and Public Transportation must remain the responsibility of the Gov’t privatize them at your peril.

  16. The Democratic Labour Party is adjudged to have won the last general election.
    The same party is giving a new meaning to the term ‘Opportunity Costs’.
    In Estwick would suggest,aided and abetted by the economists in his ministry as David Ellis suggested,The Dems say its now their opportunity to eat the Fatted Calf,so what is all the fuss about if doing so has a cost attached.A black goat is as good as a white monkey.

  17. @ Sargeant | February 17, 2014 at 5:07 PM |
    “ Health, Education and Public Transportation must remain the responsibility of the Gov’t privatize them at your peril.”

    No one will gainsay the general thrust of your argument.
    Those services are deemed to be social goods and must be made available to those who don’t have the ability to pay.

    As it stands in Barbados there is a two-track supply system in both health and education with the State directly supplying the bulk of the services based on a 1960’s model of socialism to uplift the masses with the objective of creating a bigger and self-sustaining black middle class.

    There is a large and growing pool of health care professionals and providers in the private sector along with a growing entrepreneurial class into general education and certainly adult training and further education especially in vocational areas.
    We would support the argument primary and secondary education should always remain the main responsibility of the State but with opportunities for the private sector to operate to pick up the slack and to cater to those who can pay and satisfy their desires to be snobbishly different.

    The question is whether in 2014 the State must be the sole provider or the main provider of those services given the vast investment over the last 50 years in education and human development. Don’t you think it is time to see some return on investment and demand the beneficiaries display some form of maturity and stop being a fiscal parasite? The PM put it bluntly when he said there were too many sucking on the already sore nipples of government.

    You will recall my reference to a form of subsidy towards mass transportation. Well, that is what the State should be doing. Giving a subsidy to cover the costs incurred as a result of the social or public good component of mass transportation or even in other area of education and health care where there is a sustainable private sector market.

    The State’s direct involvement in the delivery of social goods like tertiary education, non-basic health delivery and public transportation has been too costly an exercise for the taxpayers resulting in excessive inefficiencies, politicized ineffective management and dreadful fiscal outcomes as highlighted by the performance of the many statutory boards.

    It’s time Bajans, who like to boast about how highly educated they are and enjoy one of the highest standards of living in the world, grow up and be masters of their own destiny by letting the State remove itself from the market place, perform the role of regulator and referee and only target those who are in need of social safety nets by way of direct payments to them.

    If the politicians don’t do it the IMF will certainly force them to behave that way because the country has been living off other people’s money and the citizens not earning their way to pay for the big life and conspicuous consumption.

  18. I think we have come to that juncture where we have to ask the DLP WHAT NEXT??? Especially in light of the recent IMF report on Barbados and Estwick economic “presentation” in which both call for URGENT ACTION to be taken to right the Barbados economy. FOR THE DLP TO CONTINUE TO IGNORE THIS ADVICE IS THE HEIGHT OF FOLLY!!!!!! Freundel Stuart style and, with continued declaration is that he has confidence in Chris while he himself has taken a “back seat” when it come to economic matters i.e. basically do nothing, FOR FREUNDEL STUART TO CONTINUE THIS STYLE WITH THE ECONOMIC OUTLOOK SO GRIM IS A GROSS DERELICTION OF HIS DUTY AS PM AND HE IS BEING NEGLIGENT TO THE PEOPLE OF BARBADOS!!!!!!!. I consider the PM to be the equivalent to the captain of a ship or a CEO of a business. Their job is to absorb and analysis all info coming to them and to make decisions IN THE BEST INTEREST of the ship, business etc. Freundel is not even fulfilling this role ; for if Freundel was a captain or CEO behaving in this way he would be ASKED or FORCED to resign!!!!!!!!
    To this end i think that we have come to the point where Freundel Stuart, if he does not follow the economic advice given to this Gov’t within the next THREE MONTHS AT LEAST, MUST be ASKED to RESIGN as PM. If Freundel does not resign i call on the 15 other DLP MPs to REMOVE HIM AS PM IN THE BEST INTEREST OF THIS COUNTRY!!!!!!!!!! I am not making this call as a BLP supporter but as a Barbadian who do not like the info that is coming to him.!!!!!! Freundel Stuart actions are now within the realm of LUNACY!!!!!!!!. How can a PM knowing at least since 2010 that Bdos has economic problems, has a MOF for nearly 4 years preside over the worst economic crisis in Bdos heading towards economic disaster and devaluation of the dollar continue to declare he has confidence in him!!!!!. Freundel has had opportunity to remove Sinckler as MOF but by continuing to endorse him makes him (Freundel) even more culpable for this economic disaster that Barbados is facing right now!!!!!!!

  19. @DLP (formerly CBC) TV | February 17, 2014 at 8:44 PM |

    I think we have come to that juncture where we have to ask the DLP WHAT NEXT??? Especially in light of the recent IMF report on Barbados and Estwick economic “presentation” in which both call for URGENT ACTION to be taken to right the Barbados economy. ……………………….

    I could not agree with you more!

    The onus is now on David Estwick……..there is no way how he could or should remain in the cabinet having expressed a total lack of confidence in the MOF and to a lesser extent the PM.

    I have come to the conclusion that we have a selfish government, the PM being the chief culprit who only care about themselves. I have concluded that this government will have to collapse under its own weight because they only care about themselves, not Barbados.

    For we well know that David Estwick could never do what he did and then someone leaked a whole presentation to the press and still remain in any one else’s cabinet, only Freundel Stuart’s. Any other PM would have fired him three weeks ago. But Freundel only wants to be PM so the ministers can do as they like. eg Inniss and now Estwick. He has no conscience either. DE now got an light bulb moment after defending and voting for all these measures he now admits have destroyed Barbados, not to forget the stout defence only last year.

    It is time these nitwits stop thinking about their pensions and put Barbados first. What use will the big gratuity and pension be to them if the dollar loses its value?

  20. @ Sargeant
    …but the end result of your (our) approach will be that not only will the party goers not have any services available, but neither will the workers, students and other productive citizens who need the service – even if THEY are willing to pay a reasonable fare.

  21. “What we need is GOOD management and less political idiocy”
    Surprise at you Bushie for even imagining such a pipe dream

  22. It is better to thought of as a fool, than to open one’s mouth and remove all doubt. Prime Minister Stuart understands all to well, that he sits awating his political execution. Mr Stuart knows that the crisis in Barbados has placed him in the ignominious position, as Barbados’ most hated man, or second only to Chris Sinckler. Both of them now hope for the eqivalent of a political miracle. In most things, silence is golden, but not when you are the Prime Minister (Chief Executive of Barbados)and as in Chris Sinckler’s position, Minister of Finance. Leadership in Barbados seems to be woefully lacking, and critical thinking, definitely absent. I am told by those more knowledgeable than myself, that even the once heralded level of political discourse in parliament, has become scarce, and a thing of the past. Mr Stuart relishes in the idea of his own intelligencia, but doesn’t the old African proverb apply to him “To thine self be true.” History is a great teacher, and perhaps those who contend that they possess the mandate of the people, should turn to the pages of our country’s storied history, if only to reflect on the bygone days of the essence of “Pride in Industry.” Being industrious should not only be for the people of Barbados, but for the politicians who lead our Island nation.

  23. @ Victor
    What is really embarrassing is that the country is in serious trouble, even Sandiford sees it, and the prime minister is still not saying anything, he is not taking over the leadership.
    This is simply incredible.

  24. Hal, I’ve never seen anything like this. I am watching the possibility of another situation Like that of Bruce Golding in Jamaica, absolute catastrophe. At the apex of all of this, is the reluctance of the lame DLP party stalwarts and the members of parliament to call for a “No Confidence Vote” against this Prime Minister. Freundel Stuart is like a pied piper leading Barbados to its eventual fate, and the members of the DLP are all acting as if they are some how exempt from the tragic end that awaits everyone else. Certainly, this current administration knows, that the executioner, which is the general elections, which is the people of Barbados will spare them not. Mr. Stuart there will be no commutation in your sentence, Mr Sinckler no reprieve. Both of you, coupled with the political mendicancy of your party the DLP, have facilitated for a long political sentence of never being allowed the privilege to serve Barbados’ people. As we turn to the ages, I can only ask, what would Barrow think, what would the Adams’ do, where have all the leaders gone?

  25. @ Victor

    The real embarrassment is not that he leads the DLP, that is for party members if that is the best they have, but that he is the leading politician in Barbados, our national leader.

  26. @Hal Austin

    Barbadians have now entered a point in our country’s history, where we have to all collectively form a bond to break the cycle of useless leaders, and partisan political cronyism. An informed electorate, should be able to look at empirical politcal data and use commonsense in formulating opinions about who should lead, Barbados. It is said that “An intelligent question, is one half of wisdom.” Substance seems to be seriously missing in our country’s political discourse. I sense that bajans are tired, not energized to get rid of these political tatterdemalions, who pose only as sensitive to Barbados’ needs at election time. How many times will Barbadians continue to go to the well, before they realize that there is no water? We bajans must invest in the belief system that politicians are the servants of the people, and that the pervasive British foolishnes of the past, is long gone. We must employ the philosophy that we are “Out of many, one.” That we as Barbadians are buoyed by our struggles, and cemented by our fervor for change. We must understand, that the “Perfect, can never be the enemy of the good.” Change starts in the mind, and it allows us to understand that to govern requires being first governed yourself. Power should not espouse political drunkeness, but should be sobering. Politicians should not be celebrities, or treated like rock stars, the people offered them the mandate to serve. Power in the political sense, should be temporary less we risk the possibility of entitlement. Bajans, can’t be afraid to get rid of everybody, and start all over again. “Power corrupts, absolute power, corrupts absolutely.”

  27. @ Victor

    One problem is that our minister of finance does not have any financial experience, over and above the international trade post-graduate course he did at Cave Hill.
    One suggestion I have been putting forward for years is a National Growth Fund, an open ended fund to finance small and medium enterprises. Say, for example, a BDS$100m fund, with minimum retail investments of $10000 and institutional of $50000.
    If this is structured so that it is taxed income in, tax free growth and tax free dividends, I am sure it will attract a number of small investors. Another investment vehicle could be a Diaspora Development Fund open only to Barbadians in the Diaspora, a closed ended fund, tax free as long as money remains invested for minimum of five years.
    All these funds will be fully independent of government, including their investment policies. They will be bringing much needed funds in to the country and creating new jobs.
    But we have a mental obsession with government (ie taxpayers) funding all new investments, unless it comes from some rich overseas player or one of the local money people.
    Why can’t they value the Transport Board then sell it to local and overseas Barbadians?
    Restructure the board – property (sell and move to St John), vehicle repairs (turn the mechanics in to a coop without the BWU), management of the transport network.

  28. @ MillertheAnunnaki, Bush Tea, Sargeant, Well Well, RR and others of the reasonable men and women of Barbados who blog here

    Sargeant you said “ Health, Education and Public Transportation must remain the responsibility of the Gov’t privatize them at your peril.

    And Anunnaki you said “…the citizens not earning their way to pay for the big life and conspicuous consumption”.

    I am being purposefully eclectic because both you gentlemen in my humble opinion have uttered two good points (among several others)

    The thing is that if we examine the pages of history this small island of BIM will see that what Sargeant has posited is prophetic particularly in the context of a small island state.

    There are certain services that, if they are placed in the private sector, will absolutely discommode the (increasing) population of people in the poverty segment of our society.

    Already we are seeing the long hand of the unconscionable showing what privatization will do with things like health, as some are now playing havoc with the lives of people as specific insurance companies are “buying up all the MRI facilities/equipment on island” and making it virtually impossible for a poor man to afford to have an MRI.

    What is worse than this Anunnaki they then tamper with the results of the MRI, if it means paying out a premium to the insured party.

    You Anunnaki made the point about the big life and conspicuous life style that we have been living as a collective, since, to echo the words of Bush Tea, is it not the consecutive incompetent governments that we have elected that are incapable of managing our country’s affairs?

    So what if Stephen Worme and the BL&P state that Renewable Energy is not viable and that they will not invest in PhotoVoltaic Cells and Solar panels to offset the cost of our $500 million fuel bill?

    I am sure that the IDB, which has spent billions of dollars in South America in RE would be willing to develop a national Indicative programme with BIM focused on RE for the express purpose of reducing Barbados’ imports

    But that would mean that our Minister of Energy Q. Boyce would have to be able to think, wouldn’t it?

    And what, if in the same Sinckliar manner of “temporarily increasing VAT”, that the Minister of Transport were to “temporarily engage” a competent team of advisors for the Transport Board, and have the clowns, the Banker, and the other clowns take a sabbatical while an efficient system of TB services was implemented?

    Suppose that system was to (1) establish five secure car-parks outside of the Btown city limit replete with lighting and cameras (man they could redeploy the cameras from the Israelis at Station Hill District A Police Station, i wonder if Mark Fenty/Gilkes know bout them?? being that he from Station Hill and everyting) (3) establish a regular bus to city service from each of the park and rides and (3) establish 7 tributary toll gates that charge $15 for anyone driving a private car into Btown along Bay Street, River Road, Roebuck Street, Whitepark Road, Baxters Road, Fontabelle and Princess Alice Highway.

    The thing that a primary school student can understand is that if your income is $10 and you are spending $12 then, in 6 years time, you owe somebody $12. I is a simple ole man and i doesn’t have the brain capacity to unnerstan’ balance of trade etc but i think that your personal wallet operates the same way, dont it?

    The simple problem is that with all the layoffs that will be coming, the DLP and the BLP, DO nOT HAVE any idea as to how they can retrench workers in sustainable enterprises or generate any FOREX outside of the hairbrained Fumble Stuart gesticulating feverishly about the millionaire Chinese.

    He talking bout millionaires coming from china while his incompetent Minister of Foreign Affairs, Maxine McClean, flying all over the place with her Land Bags, and the Chief Immigration Office Ms. Phillips, the two of them cant issue a visa!! The two of their brains combined cant provide enough material to make a shoe laces!!

  29. @miller and Sargeant

    All can be decentralised. Why can’t heads have control of school budgets, reporting to a board? Why can health and long term care be decentralise, with hospitals reporting to their own boards? why can’t the TB be privatised?
    Those of us old enough to remember Coward, Tudor, Trotman, Liberty and the other privatised bus companies have had experience of this.

  30. @ Hal
    “Why can’t they value the Transport Board then sell it to local and overseas Barbadians?”

    “They” who…?
    Who does the transport board belong to now?
    Who paid its full cost – plus all the ongoing over-runs for it so far?

    …so you want the shiite politicians to value an asset that belongs to Barbadians and then sell it to the same Barbadians….?
    …oh !!! Bushie forgot… is brass bowls we dealing with nuh…?

    Skipper…if we were intelligent and had balls, we would simply take control of our assets and appoint professional managers to run the damn things instead of the politically appoint donkey holes currently down there…..
    …from the central bank to the Transport Board.

    How ? …you asked?

    ….but wunna like to make mountains out of little ant hills….

  31. @ Bush Tea
    The TB belongs to all Barbadians taxpayers. But it is insolvent and not a going concern. So, ownership is technical. I am suggesting valuing the enterprise and sell it off to its stakeholders and other Barbadians.
    That cash will then go towards reducing the mountain of debt this and the previous government have built up over the years.

  32. “Change starts in the mind, and it allows us to understand that to govern requires being first governed yourself”
    yes change starts in the mind provided that the mind has been adequatelyprepared for change.The culture of mendicancy to which we have grown accustomed since 1961 has so permeated our minds that it might prove easier to move a mountain than to espouse political drunkenness

  33. @ balance
    “…The culture of mendicancy to which we have grown accustomed since 1961 has so permeated our minds that it might prove easier to move a mountain than to espouse political drunkenness”

    This sounds like a deep and balanced position, but has it not been compromised by verbosity….? What are you saying here balance… ?Wuh you sound like Mark Fenty now…. 🙂

    @ Hal
    Perhaps by now you have reconsidered your position on the TB.

    So Bajan Taxpayers (BT) own the Transport Board (TB), which has been run (down) on their behalf by a bunch of jackasses called politicians for the last 40 years.
    It is now broke …..and only continues because BT continue to pour $millions annually into the hole….called TB.

    YOUR solution now, is that the jackasses who have for decades run the TB into the ground, now decide on a “VALUE” for this liability, and SELL the TB to the VERY SAME brass bowls (BT) who own it AND who have been throwing $millions of dollars annually into its coffers… do what?

    What the hell!!

    ….and bright people like Miller and Enuff, who went to a big-up school bout here, …actually agrees with you…..

    …but Bushie forgives you Hal….cause if you did not give Rubbernut so much trouble, you would have been far less troubled with the arithmetic involved…..

    This is yet another VERY SIMPLE challenge….
    All it needs is that the BT (brass bowls) who ALREADY own the TB – get together and THEMSELVES elect a board to run their affairs – WITHOUT going through the jackass politicians….who have proven again and again that they are incompetent donkeys…

    To do this only needs someone with a big mouth, two real balls and a little vision to conceptualize a position, start a movement – and DEMAND that the politicians BACK OFF and arrange for the election of such a National Enterprise Board of management to run such entities as:-
    – the NIS
    – the Transport Board
    – BNOC
    – The Airport
    – the sea port
    – BTIC
    – BTA

    Let the politicians play with the NCC, civil service, police, BDF, hospital etc

    But of course this would call for men of vision, charisma and BALLS….and such are not found in abundance among brass bowls…
    …and all Caswell does is write shiite and snipe at small fry…

  34. @ Bush tea

    I have. I think that all non-core state-owned enterprises should be sold within the next six months. They are mainly trophies to make ministers feel important.

  35. Well Hal, you should move back to Barbados. It seems that you will fit in well here….
    Every shiite bout here – people decide based on politicians….
    -What politicians say
    -What they do…
    -where they sleep..
    …and now
    -What their trophies are..

    It must be some shiite that Bajans eat when we are young (cause you like you still got um)

    Don’t you get it?
    Politicians shiite!

    You mean that you would sell our state assets because the politicians use them as trophies….?

    How about taking them away from the donkey holes and finding INTELLIGENT and wise managers?
    ….AND KEEPING THEM…..and ensuring that they SUCCEED…?

    You mean you going find MORE money to buy YOUR OWN ASSETS ….and still have no idea how you will manage them? it is, the VERY SAME politicians will end up still in charge after we are couple more hundred million dollars out of pocket….

    Any bets that you poor as shiite???!
    – just like Caswell, Peter Wick, Miller and the rest of wunna …
    No coincidence…..
    There are some things that are mutually exclusive with wealth……

    ….and Bushie don’t take financial advice from poor people,
    …nor medical advice from pot-bellied, unhealthy .so-called doctors….
    …nor moral advice from sexual freaks….

  36. @ Bush tea

    I am too sensitive for the Barbadian jungle. They will eat me alive. The big problem in Barbados at present is economics versus politics. And, in this culture, politics wins all the time.
    That is why we are in the mess we are in.

  37. @ Hal Austin

    Ole age and maturity are really game changers (lol)… The Hal Austin I had as a classmate at Combermere would have thrived in any jungle (lol)

  38. Why can’t they value the Transport Board then sell it to local and overseas Barbadians?
    Restructure the board – property (sell and move to St John), vehicle repairs (turn the mechanics in to a coop without the BWU), management of the transport network.
    Perhaps at this point we should pay our respects to Captain Hugh Cameron Hill, who recently passed away and was interred at Coral Ridge yesterday.
    Captain Hill has gone down in history as the first and only General Manager of the state owned Transport Board to have realised a profit during his first stint in office.
    Rest -in-Peace, Sir.

  39. Bush Tea | February 19, 2014 at 8:38 AM

    …and all Caswell does is write shiite and snipe at small fry…

    well said////////////////wuhloss muh belly LMAOF

  40. @ Colonel Buggy
    …all the thing EVER needed was an intelligent, competent and strong manager and leader.
    …still does.
    …but then – that goes for most failures….

    You can’t run it for them for two years?

  41. “Captain Hill has gone down in history as the first and only General Manager of the state owned Transport Board to have realised a profit during his first stint in office.”
    While having to compete with an abundance of private bus companies as well but different era, different set of circumstances; still praise must be given where praise is due. Decent and unassuming chap he was. Managed the Green Line Taxi cab on Bay Street for many years before assuming responsibility for the Transport Board.

  42. Barbados is really at the crossroads considering there is a dearth of competent grassroots and intellectual talent in both political parties destined because of our system of governance one or the other to rule us forever.

  43. @ balance
    The problem is not the lack of competent and grassroots intellectual talent (we have our share)……it is the lack thereof IN THE POLITICAL PARTIES.
    The question is why….and how- that can be changed.

    Which competent intellectual talent would join a political party today?
    Don’t persons join these parties as a means of “getting through”?
    Competent intellectual talent have no such needs…..and somehow, Bushie cannot see an ‘Amused’ or Hal Austin going around begging people like ac to vote for him.
    Was that not the problem with Henry Ford? …could not be bothered to be PM…and Barbados suffered as a result.

    Even with our best and brightest brains in control, we would face a challenge of succeeding in this world and unless we can attract these to leadership positions we are without a doubt, DOOMED.

  44. “This sounds like a deep and balanced position, but has it not been compromised by verbosity….? What are you saying here balance… ?Wuh you sound like Mark Fenty now…. 🙂 ”
    what it says bushie is that the gimmee gimmee mentality we have grown accustomed to since we start shitting in high grass got we believing we have a God given right to get everything for nothing

  45. President Mottley, in her Paul Prebisch Lecture, has called for change, n particular in the structure of companies. She can start by introducing a new Company Act, which wipes out the nonsense that a company’s only interest is its shareholders.

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