Submitted by Kevin Lashley

“For the cause that lacks assistance, The wrong that needs resistance, For the future in the distance, And the good that I [BU] can do.”

I humbly submit that the cause that needs assistance right now is the impact of the middle-class and poor by the recent policies. More specifically I will speak towards the credit union movement.

I have been a humble servant for several years and the structure of the movement means it is a labour of sacrifice. Thus the structure of a credit union is that “profits” are returned to members compared to a bank where the profits are paid to a couple board members and because we are lacking an indigenous banking system not just BNB profits 40-60% are exported to shareholders. Herein lies my first point the credit in essence is a net saver of foreign exchange. Basically all profits of the credit union remain in the country. A policy such as taxing credit unions is therefore counter-productive and tantamount to shooting yourself in the foot as a government.

Secondly, the credit union provides credit to some people who may not receive credit from the Canadian/Trinidad banking loan system. Taxing credit unions will affect the structure of the credit union and less “ordinary” people will be able to get loans.

Thirdly, when the savings incentive was removed, the comment that was made is that credit unions are making a lot of money. The comment I believed lacked some insight. Firstly, all credit unions are not created equal. By this I mean this country has 3 major players and 30 odd medium to small players. Some with only $200,000 in cash. An incentive such as this stagnated growth for many credit unions in the area of savings – especially the small to medium sized ones. This occurred while the bank had “excess liquidity” yet their rates were not decreasing substantially, why? – because they still needed to export significant profits overseas. Therefore this should be reinstated if even at a tiered basis with the credit union’s size used as a reference.

Fourthly, the current administration criticized the last administration about selling BNB – partly justifiable. Why was it a justifiable criticism? The reason is while it (the sale) gained crucial foreign exchange, it weakened the local control with reference to the local market. To tax credit unions would weaken the same local market that this administration was saying would be weakened by the absence of an indigenous bank. We therefore will not be craftsmen of our fate but satellites of some. If we sell what we have and then weaken what remains, a take-off for this economy will be extremely difficult as others are growing.

Fifthly with reference to the Credit Union Bank – there was talk by the government about having a local bank. The easiest platform for a bank to be started from is the credit union movement in Barbados. The government even alluded to this in the manifesto. The government then has a better option in the future in terms of borrowing because it doesn’t have to borrow as much from a Canadian/Trinidadian bank and continue to keep some of the debt domestic.  Weakening your best platform is again shooting yourself in the foot.

Sixth, the deposit insurance that was promised has still not been delivered. So the credit union is being given a “belly searcher” and still not receiving the “good” that was promised.

Next, where does the “nuff money” that the credit union movement go. 1 – Teaching the ordinary man for free about financial services. 2. Dividends. 3 Making sure that if you die or you are disabled that insurance covers your loan. 4. Better rates for savings. I can also tell you where it won’t go – Canada/Trinidad.

Next when financial institutions are compared, job security is better in a credit union than at banks. Yet despite making significantly more profits than the credit unions, banks have been laying off more people. Why because of the inherent obligation to overseas shareholders. I asked a gentleman that works at a telecommunication company, why were the new entrants able to catch up so fast when they would have been here for way more years. He said the answer is simple – “the overseas shareholders have targets for profit” so there was no investment in the cables and hardware and people laid off for short term gains.
On a slightly unrelated note, why sell the BNTCL to a “wealthy local business man” when in a country where the stock market is haemorrhaging the opportunity could be used to give the Bajan middle class a place to invest by selling shares. The rate for gas in being increased and would give the middle-class a chance to benefit not just 1 “wealthy local business man”. This is why the gap between the poor and the wealthy is widened during economic turmoil. Sell shares in the airport as well to the ordinary man, not just the “Wealthy”.

In conclusion, you realize your opinion only counts if you are part of an eminent persons group and this is the scariest thing about Barbados is that your voice can’t be heard. My layman opinion is if you have a debt problem and you are taxing to gain revenue, you still have to ensure you have a platform to take off for your future if things ever improve and one of those platforms is the Credit Union Movement. At the end of the day all great economies survive base on the quality of their financial institutions. BNB is gone. What do you have left and what are you doing to encourage its growth? We talk about incentives for rum, what about incentives for our people? The credit union has 150,000+ members.