Submitted by M.R.Thompson
The Barbadian Economy and Finances are suffering from a self inflicted malady and urgently in need of a CURE. The prescription is a foul concoction and unpalatable which will no doubt result in severe blame the other guy, political suicide, I told you so, reduced quality of life and other as undiagnosed complaints.
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Immediately Devalue Barbados dollar to a ratio of 3:1 of the US$. Re-evaluate after 5 years.
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Immediately Reduce the level of civil service employment to 10% of the population, ie: 29,000. This level (29,000) includes direct civil servants, All agency employees, All board employees, All Central Bank employees, All Police Employees, All Teachers, All Defence Force, Transport Board, etc., everyone that is directly or indirectly paid from the public purse.
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Immediately implement programs to streamline the collection of taxes aimed at efficiencies and recoveries.
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Sell off or disband all non performing (money losers) entities not related to Health Care, BWA and NIS Pensions. Sell Off all government held property that cannot be substantiated for retention, provided a reasonable rate of return can be obtained, ie NO FIRE SALES.
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NIS to have an immediate financial audit to determine what is the state of the portfolio. NIS held government debt be reduced immediately to no more than 25% of the portfolio. NIS be allowed to hold off shore assets in the portfolio. NIS employee levels to be evaluated.
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Central Bank Governor be immediately FIRED and function filled with a non Caribbean Capable Financial Currency Board.
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An extreme policy adjustment be made to see that ALL Barbadian Laws are fully enforced and complied with.
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Integrity Legislation be immediately implemented with severe penalties for non compliance.
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An agricultural/import policy be implemented with the goal to becoming self sufficient in food production within 5 years.
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IMF be invited in to oversee All Government Operations.
It’s a BITTER PILL but the alternative MAYBE the DEATH of a NATION.
125 responses to “Barbados – The Prescription”
@ are-we-there-yet? | June 11, 2014 at 10:03 PM |
“Time looks like it is running out and this, as I said much earlier, is an option that deserves to be tried. The BLP opposition must be shamed into accepting a rollback of the law for the greater good of the Country and the Government must not be allowed to play political tricks and run away from doing what is necessary. Let them both eat crow and bring a joint resolution so that there is no future benefit.to be gained from being able to claim that the other side reduced the people’s salaries”…………..
The DLP should have changed the law when they had a majority as they KNEW what the true state of the economy was. But for political reasons, the economy was stable.
And you know that the DLP CANNOT be trusted……….the day the BLP makes a deal with them………….my goodness, the likes of the Stinkliar, Kellman, Donville and the PM will spin it upside down on the political platform to say that the BLP cut civil servants’ salaries.
That Donville Inniss had to turn to MAM and Kerry Symmonds for help with international business speaks volumes………….he who said he aint want to hear nutten from wunnah, keep wunnah ideas to yuhself……..they are clearly out of their depths and need to go!
I would not make a deal with them, let dem find a way out. Estwick gave them a solution and that seemed have been thrown into the file 13 dustbin.
David
Sometime ago you wrote that Hal Austin will return, so where is he?
Seems like everyone is jumping on the devaluation bandwagon with esoteric arguments about what the price of a Chefette Roti is likely to be in the event that Barbados crosses this Rubicon. These discussions don’t amount to a hill of beans as the average Bajan mindset rises to the level of “yuh can’t nyam the money” so Haloute’s profits are safe come high or low dollar.
In the rush to devaluation (at least on the blog) I am reminded of the words “those who fail to learn from history are doomed to repeat it” and the history of this region has two prominent examples where devaluation is still a work in progress.
Guyana and Jamaica are two countries with abundantly more resources than little Bim and a generation of a lower dollar has produced scant positive economic results. In Guyana’s case Forbes even banned the importation of many food items as this action was supposed to save Foreign Exchange and create a nation of self-sufficient farmers and entrepreneurs but instead it led to a mass exodus of people who fled to any country where they can find safe harbour. Jamaica has not fared much better and despite a burgeoning tourist industry, an agricultural product of worldwide renown (Green Mountain Coffee) indigenous music of International acclaim and bauxite exports it is still considered a “have not country”
Be careful what you wish for you might get it.
@Sargeant
BU communicated the info received.
Sargeant wrote “Seems like everyone is jumping on the devaluation bandwagon.”
Sarge there is no point waiting for it to happen.
Now is the time to discuss issues pending the inevitable “address to the nation” which has to happen sooner or later.
Bim MUST NOT DEVALUE!
Devaluation is a false Eldorado and just increases everyone’s cost of living. Societal breakdown would quickly envelop the nation , it would be the Grand finale.
Bim must run a tight ship financially for a few years and creatively encourage Business and JOB creation. Invite entities with very deep pockets to come to Bim and invest heavily. I understand that some rich Arabs wanted to invest $Billions a while back and Froon would not even meet with them, CRAZY! They could have had those fellas build 5000+ Housing units for the people. Couple Billion could kick start many concepts that could lead to JOBS!
when all is said and done, a lot more is said than done. As Pachamama said : The same cold soup only warmed over! Barbados is not unique- it is suffering from all the ailments found in fear and refusing to accept change. The economists and others who have mastered some aspect of “education” cannot save us. They are nothing but empty sounding brass. With all the fancy knowledge, not one of them is capable of removing themselves from what they consider to be superior intellects. Not one of them has brought a new solution to any of our problems. They all operate in the same manner. Enough said. Listen to Pachamama. By their fruits you shall know them.
David please read epaper BarbadosToday pages 6 & 7. titled SUGAR STUDY.
Serious allegations with regards to compulsory acquisitions of land.
So we are saying that small wage government workers have to get pay cuts so that Freundel can have the largest cabinet we have ever seen and keeo all of their ‘not necessary’ allowance and priviledges. Let the political class lead by examples, put down the expensive cars paid from our money, who pays for their gas, their entertainment, i know government agencies where droves of money is still being mismanaged. When we take a salary cut are you sure the money would be properly allocated. Government need greater prudence period and until that happens i aint supporting no salary cut.
Money brain is correct do not devalue…carpet baggers like myself are waiting for that event to buy property . As much as I like money I like Barbados more, take the pain suffer the Imf directions keep me and my Canadian dollars at bay
PNO
Thanks! I wanted someone else to dismiss the nonsense that Bushie and others are spouting about a pay cut for public officers.
Public officers did not create this mess, so why should they have to bear a disproportionate burden in order to bail the country out of the hands of the international vultures of last resort. The politicians created this mess with their lies and general corruption. Before any civil servant suffers a reduction in salary, those responsible should have to go, preferably to jail.
Civil servants last saw an increase in their wages in 2008/9 and that merely put them back to where they were in in 2006/7. Thereafter, every conceivable thing went up in price: water by 60%, Road tax, light and power, telephone, gasoline, bus fare, and the list goes on.
If the members of this Government were working in the private sector and they were performing so poorly, they would have been fired. They would not be able to claim compensation for unfair dismissal
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@Caswell Franklyn
The truth is Caswell that their are bad elements belonging to the two political parties that are part and parcel of the government. They are called the lackeys and are quick to tell you who their friends are and why you cannot touch them. They are a ‘large minority’ and them along with their political masters are the ones who need to suffer more than a pay cut but complete removal from office with immediate effect. Their devices are responsible for where we are today.
Most of the comments under the lead article and pertaining to this illogical impractical false notion of devaluation are absolutely far-fetched and are steeped in unrealistic thinking.
Using the real actual cost of use of money variable assumption/variable/principle/theory, the PDC can prove that such comments are exactly so.
The fact is that there are two fundamental purposes that users of money in Barbados generally have going for the existence of money:
1) To create their own uses of money out of their own nominal incomes, revenues and transfers;
2) To represent whatever amounts of nominal incomes, revenues, and transfers and or their enumerated costs and other relatives.
There are four basic uses of money:
1) As a way of dealing with the real actual cost of use of money in various settings.
2) As a commodity that has denominations, and that is passed on or received by whomsoever in the context of the intertwining use by users of money of extant ideological, counting, financial, property owning, political and too legal, and commercial industrial systems.
3) As a temporary indicator – in recurring ways – of the nominal savings of the relevant individuals, businesses and other entities in the relevant financial institutions in the country.
4) As a means of representing gifts by some people to other people.
Now the PDC is going to use the real actual cost of use of (local) money assumption/variable/principle/theory to show that there is no revaluation – upwards or downwards, appreciation or depreciation of the Barbados Dollar.
First what has to be understood is that no resource, good or service, costs any thing in money terms.
So it is absurd for any one to write about the price or cost of an import going up, or the price or cost of an export going down, when in the first place there is no such thing as the price or cost of an import/export, and even after it has been considered by any one that there has been a change in the ratio between the Barbados dollar and the US dollar from 2 to 1 , to let us say 4 to 1.
Too, what is therefore derived from this real actual cost of use of money variable/assumption/principle/theory is that all nominal remunerations that are transacted must be derived not from money, but the use of money in particular systemic circumstances, and which – when seen by any serious thinker to be the case – must also express such remunerations.
Having established such, we now make the point that each and every coin and bill is only related to itself and to no other in particular, what ever the amount of the denomination.
Thus, a one cent will always be a one cent and no more or less. A five cent, a ten cents will always be a five cents, a ten cents and no more or no less, in both cases. A two dollar on its own (or in remunerations), a five dollar on its own (or in remunerations) will always be a two dollar on its own (or in remunerations), a five dollar on its own ( or in remunerations) and no more or no less in the four cases. And we will go on further to add that there are no relationships between any coin or bill and another coin or bill. But we will stop there for now, given that the point has already been made.
Thus it is very absurd also for any one to state that – with a change in the ratio to, say, 4 to 1, the so called value of 1000 BDS dollars in remuneration savings diminishes (by what??) in real terms, and that – with the aforementioned change in the ratio to, say, 4 to 1 too – the so-called value of a so-called amount of money debt of 1000 BDS $ to a certain financial institution diminishes ( by what ??) in real terms.
Well with regard to the PDC answering how and by what means the savings/ the so-called (really non existent) money debts are diminished, there are no logical answers to such, since no coin or bill relates to one another (in particular NOT as a whole).
Now the fact that the cost of use of money (local) has only to do with whenever the relevant persons, businesses and other entities charge one another for the earlier use of money, out of the relevant others’ remunerations (collectively expressed as an estimated average percentage of 100 per annum), must mean that – to the extent of the real actual cost of use of money (local) – it is the USE by the relevant persons, businesses and other entities of denominated money that brings about such nominal remunerations, and must mean that – to the extent of the real actual cost of use of money (local) – there is absolutely no way in which such USES of denominated money CAN be revalued downwards or upwards, appreciated or depreciated.
Otherwise said the higher and higher the real actual cost of use of money goes, the slower and slower the uses of money will be, invariably meaning that with the real actual cost going higher and higher, and thus its taking up greater and greater amounts of uses of money, there will be less and less overall nominal remunerations being given by the relevant persons, businesses and other entities to one another – while at the same time we are holding for a relatively fixed amount of money in circulation in Barbados.
So finally it is the amount of money in circulation in Barbados; the real actual cost of use of money in the country; the amount of entities competing for and actually having the use of money constantly in this land, that will primarily determine the amount of nominal remunerations any persons, businesses or any other entities will get at given periods in the short or long term, or if they will get any at all in the final analysis, whether in the short or long term, and NOT any change in the ratio that exist between, say, the Barbados Dollar and the US Dollar, as that, this ratio is NOT the indispensable USE of MONEY (local or foreign) by users of MONEY (local or foreign) itself.
PDC
David,
It is unfortunate that in this day and age you still believe that there is something called inflation/deflation that is in existence in Barbados.
Indeed, it is utter false thinking to have and possess such “in one’s mind”.
The fact that there is and has never been any empirical proof of inflation/deflation having been/being in existence in Barbados or anywhere else, illustrates that it does not exist and has never been in existence in a world of objective and scientific truths.
What bunkum about inflation/deflation being in existence any where any time!!
Only primarily in economics will such bogus concepts be found; bogus concepts that do not have any bases in logic or general human conduct.
To show how counterfeit the concepts of inflation/deflation are one only has to look at the fact that one of the false concepts purporting to support these illusions of inflation/deflation – price – does not even have any objective existence of its own whatsoever outside the human mind.
Indeed, what farcical falsities that only obtain “in the sights of the minds” of hordes human beings in Barbados.
PDC
David | June 11, 2014 at 6:55 PM |
“What if the printing of money is to mainly satisfy government’s servicing of bond and TB redemption? The printing of money is not being released into circulation per se but represents a ‘book entry’?”
David,
I view the printing of money as an increase in the money supply without an associated or corresponding increase in products or services. Offsetting ‘book entries’ cannot create a net increase.
Let us look at government servicing a bond as a simple example.
Government needs $1000 to spend now. It approaches you and tells you that if you lend it $1000 today, it will give you $50 each year for the next 5 years. At the end of the 5th year, it promises to repay you $1100.
You accept the deal. Note that at this point, there is no increase in the national money supply. Money has simply been transferred from you to government.
In year 2, after trying as hard as it could, the government cannot come up with the $50 it promised to pay you. The responsible thing for the government to do is to let you know it cannot pay you right now, and to negotiate a new deal . For example, instead of paying you $50 next year, it can offer to give you $110. This responsible approach is known as debt restructuring. Note that there is no increase in the national money supply when debt restructuring is used. Money that was supposed to be transferred from government back to you will take a little longer, that’s all.
An irresponsible government, on the other hand, would order the Central Bank to make $50 available so that it can pay you. Someone has now entered the financial relationship between you and the government, and it is solving government’s debt problem. The $50 you receive, and will go out and spend, is not a payment from government’s revenue. It is new money entering the system. Money has been printed.
At this point, you should be getting a little concerned. The printing of money will create inflation and the $1100 that you expect to receive in year 5 might not be worth “what Paddy shot at” when that time comes.
The lesson to be learnt here is that responsible governments tackle their debt problems by using debt restructuring techniques. Irresponsible, unenlightened governments print money instead.
@ David
Butch should not be dictating to Caribbean goverments, they should be dictating to him!!! Sandals/Beaches is a Caribbean product i.e. it depends on regional locations; and as I have said before the governments within Caricom should not allow Butch or any other developer to force them into bidding wars to see who can offer the sweetest concessions. There must be a policy at the regional level that promotes cohesion through sensibe, balanced development that acknowledges natural, physical and other endowments. The existing dog eat dog scenario is the reason Butch could trick Grenada and Barbados.
Thanks Walter for taking the time to explain issues raised by the blog. May strip out your responses to form another blog. Another concern which has been discussed on the BU before is to what extent Central Banks takup of Treasure Bill to effectively lend to government creates an artificial price in the investment arena.
@enuff
Theoretically your response makes sense BUT in the world of business what Butch is doing is making use of a competitive landscape where many islands WANT the Sandals brand to boost product offering. You alluded to it, what a smart Caricom leadership should have done is to harmonize on how to treat Sandals under a pan Caribbean arrangement, CLICO must have thought us something.
the truth is now that public servants have been cut ( one of the first calls by the BLP leaders and yardfowls going back to 2008 ) seems least likely to produce the financial bonanza that they had hope for,,as usual the yardfowls look for another panacea or a quick fix,,hence you here the loud calls for devaluation which has proven to further weaken small island economies,,,,,and destroy social stability,,,,,this call for devaluation like privatization would never work as it further strengthens the rich while wrecking havoc on the poor,,, including reducing the dollar strengths of spending power. while increasing inflation.. ,the govt must remain strident and conservative in its approach fiscally putting policies in place to collect the billions owed,,,there are those who have lived large on the fatted fatted calf and they too should be called to make equal sacrfice even if it takes govt use of laws to do so,,,….there are no sacred cows,,,,
@ Caswell
When it comes to matters of money, Bushie suggests that you defer to Moneybrain, Lawson and Bushie…..men who HAVE some….
Kindly stick to matters of transparency, governance and spilling the beans on crooks….
Bushie was talking about ACROSS THE BOARD adjustments in wages and salaries aimed at REBALANCING an obviously dangerous situation which WILL RESULT in a devaluation if left unattended.
You have this bad habit of rushing where angels fear to tread …..and of NOT rushing where you need to BUP…..
The INEVITABLE ALTERNATIVE will be a Jamaica/Guyana scenario.
To those urging Government NOT to devalue the Barbados Dollar…..PLEASE NOTE THAT DEVALUATION IS NOT ALWAYS A CHOICE TO BE EXERCISED…..IT IS OFTEN A CONSEQUENCE OF ILLCONCEIVED EXCESSES.
There is no painless alternative……but the DEFAULT option of devaluation will be DEVASTATING…..
….so talk shiite about not wanting wage cuts and see what we will get.
Bushie:
How you could tell the man he does not have any money. The other day they found a lot of charity owners had swiss bank accounts or Caswell could have some benefactor who set he up real good!! Bushie stop meking sport at we poor people!!
@ Walter
I view the printing of money as an increase in the money supply without an associated or corresponding increase in products or services. Offsetting ‘book entries’ cannot create a net increase.
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You, like Caswell, have a way of making unintentional absolute statements. This is dangerous.
How then would you describe a situation where a Government negotiates a loan for Bds $10M to build an administrative complex/ police station/ coast guard base/ oil terminal/ poly clinic / Marina ….etc …which is finally completed at a book cost of $30M?
…due to “over-runs”
Have you not created “book entries”of $20M?
In most cases the actual asset is only really worth $5M anyway….with the lotta steel that goes into them, while the book values are way inflated.
You think the Auditor General does be exaggerating?
Why do you think government finances are ALWAYS 5 to 10 years behind……unlike EVERYONE ELSE…including Moms and DADs corner Snow-cone cart? ….because government accountants are idiots?
Can you imagine how ridiculous the numbers would look if CURRENT valuations were used in CURRENT financial statements on these kinds of projects if accounts were up to date????
…even the Auditor General would be shocked…..
These crooks can create money in their sleep Walter….
@ Lemuel
Caswell does make a church mouse seem well off…it is better that way….he would be REAL uncomfortable if he had a lotta money.
You gotta understand that Caswell has an inbuilt mechanism that makes him suspect ANYONE who has more money than needed to survive.
How would the man be able to sleep – if he always suspected himself….?
LOL…. hahahahahaha
The man is purpose built for the job of overseeing transparency and integrity……
Bushie
Stop talking crap!
When salaries were cut in 1991 several people got a zero on their payslips after deductions, and that was because the computer was not programmed to give minus dollars in some cases.
Cut salaries what? With all the brain power at the disposal of the Government that is all that they could come up with? How about collecting the in excess of $1 billion in VAT that was collected and not paid into Government. They had six years to do so. Some of that went into the campaign treasury of both parties. That is why both of them are keeping quiet on that issue. Also allow the public officers, who were going after defaulters, to do their jobs. With penalties and interest, how much Courts would owe on their original $25 million tax dodge.
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Please continue the discussion here – Walter Blackman’s Perspective on Devaluation and ‘Printing Money’