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A Problem of Debt

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debt_highDuring the just concluded 2016 Estimates Debate former Prime Minister Pwen Arthur in one of a few intelligent interventions shared his perspective on the debt problem. It is no secret Barbados has achieved the ‘ranking’ of one of the highest public debt to GDP countries in the world. In the study- Public Sector Debt in the Caribbean: An Agenda for Reduction and Sustainability published by the Caribbean Development (16 Sep 2015) Barbados, St. Kitts and Nevis, Jamaica, and Grenada – are ranked in the top five – all greater than 100%.

Here is a short video shared with BU that summarizes our plight in simple language.

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80 responses to “A Problem of Debt”

  1. David Avatar
    David

    A search of CDB’s website throws up several interesting publications on the subject of debt:

    http://www.caribank.org/?s=caribbean+debt

  2. David Avatar
    David

    We day stop being partisan about how we allocate and spend tax dollars is the day politicians on both sides will get the message. In the early 90s Sandiford trimmed the public sector/cut salaries, when Arthur assumed office the number ballooned and the status quo reverted, the excuse the economy was growing therefore we needed the resources. The idea that we should make our public sector more efficient by improving systems appear not to have been a consideration. The stupidity of our system reached a zenith when the Thompson and Stuart administrations assumed office at a challenging time and continues the trend of spend and reckless hire. The political parties select the ‘jobs’ to farm out to the friends and keep those that are not attractive as revenue earners.

  3. Violet C Beckles Avatar
    Violet C Beckles

    Spending land as money with no return ,free and taken for side pocket payouts and not for the public good, While taxes and vat are launders as Acquired Lands , with no records of clear title deeds or shown payments to the owners , In the name of taking the VAT and TAXES for self, Ministers and Lawyers got the ball rolling, Focus on the land and see all things.Better learn to ask Questions to MIA and Owen , Sir Richard and Sir COW,and why is the DLP covering up these crimes?,By the COP fraud Squad, Numbers dont lie, just the People in charge of the Numbers,Are we smarter than a 5th grader ?

  4. Bush Tea Avatar
    Bush Tea

    The video is BANG on point.

    It can only be something in the water that we are drinking that explains the complete level of STUPIDITY being demonstrated – not only by our politicians, but by MOST citizens – who quietly go along with the idiocy.

    It is PARTICULARLY stupid in a country like Barbados, where for 400 years our ancestors were enslaved by a military and economic system called the plantocracy. One would think that our relatively new BLACK leadership would be especially sensitive about giving similar control of our future back to the descendants of the former slaveholders….

    But…
    A close look at the faces of our leaders would show (to the discerning) the nature of the CURSE under which we are trapped….

  5. David Avatar
    David

    @Bush Tea

    We are sensitive about some things. We need to borrow from what Trump and Sanders have been able to do in the USA – appeal to the youth and others who otherwise been disengage.

  6. Hants Avatar
    Hants

    @David ” Sandiford trimmed the public sector/cut salaries,”

    And got vilified and voted out.

    Bajans do not want to make sacrifices to effect meaningful change.

  7. Bush Tea Avatar
    Bush Tea

    @ David
    Hants has hit the nail on the head.
    The people want freeness without productivity. That means spending someone else’s money.
    When you spend other people’s money you become their slave…. It is basic common sense.

    Sandiford was the worse man in the world because he had this ‘ridiculous idea’ about living within your means ..and (probably most notably) because he had a habit of avoiding the bribe-masters’ cocktail traps and glittery temptations.

    A people ALWAYS get exactly what they deserve….

  8. Bush Tea Avatar
    Bush Tea

    The REAL challenge of leadership in the twenty-first century is one of mass communication, mass-education and change-management. It is a job for top class brains, self-confident, accomplished MEN (with big balls), and visionaries who can see way down the road…

    Instead, we are saddled with losers who could not even hold down a normal job to support their own damn family; whose idea of a vision is a nightmare; and to whom ‘change-management’ is about dispensing with one-cent pieces.

    What the hell do you expect….?

    Take education…
    Instead of creating a national competition to encourage science students to come up with innovative ways to implement drone technology to solve national problems, our government bans the technology because some idiot presumably wanted to see if there was actually anyone ‘working’ in the army…? …and what exactly they did for the $50M per year…

    Who knows if a young ‘William Skinner’ type would invent a machine that could eliminate drownings by responding within one minute to take a line and float out to swimmers in trouble…?

    In Barbados, ignorance IS bliss….

  9. Well Well & Consequences Avatar
    Well Well & Consequences

    First one has to educate the young, the older citizens are too set in their ways and comfortable being stupid, that politicians are their employees, it’s their given right to vote for either political party or individual politician BUT, there is nothing in the constitution that says voters have to blindly follow, pimp for or become yardfowls for any politicians….you are the politicians’ employers, do you see your employer following you, pimping for your or yardfowling for you…..I dont think so, treat the politicians like your employees, that is what they are, watch them, monitor them at all times, hold them accountable and fire them when they are corrupt and do not perform competently as employees should….get rid of the emotional idiocy of being followers and party faithfuls, it’s destructive, be clinical when accessing politicians and their actions.

    The country is your busines, the politicians are employees in your business.

    If the electorate can understand that message, there will be no idiots like AC and Alvin trolling around spewing rubbish.

  10. Well Well & Consequences Avatar
    Well Well & Consequences

    And…that abrupt turn around and change will see a better calibre of politicians presenting themselves to serve the people and not themselves, there will be no yardfowls to stagnate growth, creativity or innovation, politicians will have to start using their brains to be reelected, no yardfowls or accumulating yardfowls to guarantee reelection 5 years down the road, there will be no guarantees….reelection will be based on performance.

  11. David Avatar
    David

    @Bush Tea

    The Greek syndrome?

  12. Artax Avatar
    Artax

    Chris Sinckler ADMITTED on Brass Tacks this morning that Mottley’s allegations were true, but he could not recall at that time if Cabinet made a decision to increase the NIS board members’ stipends.

  13. Old Baje Avatar
    Old Baje

    @ WW&C

    RE: Your 9:58 AM post

    If our school teachers could inculcate that attitude in their students it would go a long way to addressing our problems.

  14. Prodigal Son Avatar
    Prodigal Son

    Is everybody listening to this LIAR on BT?

    This man can lie, you hear! He got up and catgorically denied wht Mia was saying and now saying he was not here, he was attending a IMF meeting…………..so if that is so, why did he categorically deny what MAM was saying?

    These people think we are fools!

  15. Prodigal Son Avatar
    Prodigal Son

    What a poor reason for justifying raising NIS directors’ fees by 200% at a time when they have denied poor workers at the airport a 3.5% increase.

    I hope these poor Barbadians do not still believe that the DLP is a party for poor people. These dems are are for the upper class and three white men.

  16. Alvin Cummins Avatar
    Alvin Cummins

    @Well Well, How about you running for office? At the moment with our electoral system, everyone is voted for as an individual, not a member of a political party. So you would be just …Project yourself enough and get voters for. Get more votes than any of your opponents and you will be a member of parliaMENT..INDEPENDENT AND FREE TO EXPOSE WHATEVER POLITICIAN CORRUPT OR OTHERWISE. HOW ABOUT JOINING GRENVILLE, CASWELL, WALTER ET AL. EVEEN BUSHIE, IF HE WANTS TO PUT HIS HAT IN THE RING.
    WAITING FOR YOUR ANSWER.

  17. Prodigal Son Avatar
    Prodigal Son

    Chris yuh lie…………..were you not transferring millions to the NHC when Michael Lashley was the minister and never broght the details to the House?

    The truth only got out when the Auditor General filed his report.

    This man is a bad nasty liar!

  18. Bush Tea Avatar
    Bush Tea

    @ Artax
    Stinkliar has perfected the art of belligerent bullshitting….
    It baffles brass bowls…

    Imagine that, in effect, the joker has admitted to, while holding the post of MoF, CATEGORICALLY admitting to ignorance on a matter of government spending.
    If you DON’T KNOW something …then ASK!!! …or at least HUSH!!!

    One has to wonder …in how many other areas he has employed belligerence in place of knowledge in making national financial decisions…. CAHILL comes to mind.

  19. Artax Avatar
    Artax

    Bush Tea March 21, 2016 at 12:01 PM #

    “Imagine that, in effect, the joker has admitted to, while holding the post of MoF, CATEGORICALLY admitting to ignorance on a matter of government spending. If you DON’T KNOW something …then ASK!!! …or at least HUSH!!!”

    @ Bushie

    But Sinckler mentioned he ASKED 3 of his colleagues, ALL of whom said they COULD NOT RECALL either.

  20. Prodigal Son Avatar
    Prodigal Son

    Artax

    This is why he should not have jumped up twice and categorically deny what MAM was saying.

    This only shows how ignorant he is and immature to boot. For him, politics is a blood sport at which he must always be the big bad bully who thinks he should win at all costs.

    I wish Ellis would ask him why he and his government chose to pay CLICO 55 million dollars for that building on Collymore Rock.

    Eight years on and they are still in a learing mode………….and arrogant with it at that.

  21. Well Well & Consequences Avatar
    Well Well & Consequences

    Alvin dahling…I prefer sit on the sidelines and expose ya’ll…I can see more from this vantage position and it’s a hell of a lot more fun…lol

  22. Well Well & Consequences Avatar
    Well Well & Consequences

    Sinckler as minister if finance, has to sign off and approve expenditures, incliuding raise in salaries

    He is lying, again..

    See why I like this vantage poibt Alvin…very few lies gets pass me.

  23. Well Well & Consequences Avatar
    Well Well & Consequences

    *Point

  24. Well Well & Consequences Avatar
    Well Well & Consequences

    Old Baje…that education should be made mandatory from secondary schools, before the children start regurgitating the nonsense re politics, politicians and yardfowlism, they hear their parents speak about, which successfully keeps the cycle of ignorance in place….that strengthens and embold corrupt politicians

  25. David Avatar
    David

    The MoF also missed the question by MAM. Make baseline info public. This will never happen of course.

  26. David Avatar
    David

    The MoF stated this morning the government has to reduce its deficit by about $200 million dollars. How will this be possible with a general election on the horizon?

  27. ac Avatar
    ac

    I also heard during the discussion in Parliament on the said matter after Chris stating that he had no knoweldge of the proposed increased. Mia replying by stating that the allegation was not meant towards Chris.
    Then question is why would Mia acknoweldge in Parliament that the allegation was not towards Chris after Chris denial then use grandstanding politics as evidence
    It just might be as Chris stated he was not included in the discussion
    In any case the bottom line would be if there was a final agreement that he had approved.
    But then the Blp like drowning men need every available life raft

  28. Artax Avatar
    Artax

    More verbal gymnastics…. If that was the case, then Sinckler did not have any reason to admit in a public forum that Mottley was indeed correct.

  29. Retribution-things that make me go hum! Avatar
    Retribution-things that make me go hum!

    Art and Prodical, re: Sinckler’s response to the NIS issue – I keep reiterating that the people should not only hold these people accountable for their dishonest actions but we (the people) should take drastic measures and hold these offices hostage.

    How can you get away with a response like that? – Liar needs to be behind bars!!! Mind you; it begs to question what other funds are being moved around illegally.

    Thanks Mia – THE PEOPLE NEEDS TO KNOW, what is going on with their money.

  30. Well Well & Consequences Avatar
    Well Well & Consequences

    AC…ya lie.

  31. ac Avatar
    ac

    the question being was Mia correct on the allegation or was she correct in stating that Chris had knoweldge of the agreement
    From what Chris said in parliament and now supported by a clarification by his response via media Mia still has not proven that Sinckler was privy to the agreement all she has done is started another fire with hope that it would be enough to give her enough electoral support to win the next election which is not gonna happen.
    Now the BLP operatives can say he lie all u want but in the meanwhile tell Mia that she has to show more evidence that Chris participated in the drafting of the document ,, Also while she is digging bring proof of her LEC certification

  32. Prodigal Son Avatar
    Prodigal Son

    When government employees begin to leak government documents…..it is clear evidence that the workers have had enough of the lies and deceit. It is clear that they are fed up with these ministers.

    They did it to OSA and it seems as if they are so fed up of these incompetent dems just like most Barbadians.

    It is passing strange that the person who gave the dead lying king the file from the MTW on the SSS project is now a big BLP supporter.

  33. millertheanunnaki Avatar
    millertheanunnaki

    @ David March 21, 2016 at 12:36 PM
    “The MoF stated this morning the government has to reduce its deficit by about $200 million dollars. How will this be possible with a general election on the horizon?”

    The same MoF has been making the same call since December 2013 when he announced the laying off of thousands of workers from the public sector. The guv of the CB has also been calling for similar measures since October 2013.

    Everybody knows where that $200 million leakage lies. Right in the transfers to the myriad statutory corporation and other superfluously unproductive bodies including some right in the central government army of occupation like NISE and the Productivity Council.

    The challenge is when will the MoF fulfill his oft stated and long overdue promise of restructuring the statutory corporations. Wasn’t a report on this exercise promised since December 2013?

    “Additionally Mr. Speaker, earlier this year, the Ministry of Finance formally requested technical assistance from the IMF’s Fiscal Affairs Department in two critical areas of government’s operations: Tax administration, and fiscal/operational reform in the key statutory entities which rely on central government for large transfers for their operations.
    For some time now most internal and external examiners have expressed deep concerns about both of these areas as key examples of parts of government’s operations which exhibit unacceptable levels of inefficiency and dis-functionality resulting increasing financial burdens to the state.
    I am happy to announce that the Fund has accepted the requests and starting next month, the first team will begin its examination of the fiscal and operational challenges of some of our key statutory entities.
    In anticipation of that and in an effort to advance and concretize this work, the Ministry of Finance will assemble a high level task force of senior finance, business and accounting experts to work along with the Fund’s team to finalize a reform agenda for the selected entities to be presented to the Minister before mid-year.”

    Now how long is too long from July 2014?? The MoF wants to get to fiscal heaven but is unable to pay the price for the trip.
    The MoF is just one big arrogant disrespectful incompetent whose greatest asset is manifested in his outstanding capacity to lie, bluff and bullshit.

  34. Artax Avatar
    Artax

    AC you are political yard-fowl jackasses. Your comments CLEARLY INDICATE that you DID NOT LISTEN to Sinckler’s RESPONSE on Brass Tacks.

    You are trying to “spin the issue” by writing that Mottley IMPLIED Sinckler “participated in the drafting of the document,” when that was never the “bone of contention.”

    Sinckler called “Brass Tacks” this morning to ADMIT he “was privy to the agreement” since it was a cabinet decision, and as such, Mottley was CORRECT.

    When questioned by Ellis about Sinckler about his statement re: “I can categorically deny that I have any knowledge of, or information pertaining to any such matter between the Minister of Labour and the National Insurance,” he said he COULD NOT RECALL the CABINET DECISION at the TIME Mottley made the reference in parliament and “categorically denied knowledge” of the event after consulting 3 of his colleagues, who said they could not remember either.

    Sinckler further stated that, after SEEING the DOCUMENT in print media, it PROMPTED him to REVIEW his NOTES, which more or less “jogged his memory,” and he went on to described and explain the events/circumstances which led to the recommendation of an increase of the NI board stipends.

    Additionally, he said that he did not set out to “mislead the house,” as suggested by Mottley, it was just a case of him NOT BEING ABLE to REMEMBER (recall) at the time. Pure political grandstanding to “sugar coat” he told a lie in parliament.

    He repeated to Ellis on MORE THAN FOUR OCCASIONS that he DEFINITELY HAD KNOWLEDGE of the recommendation and Mottley was correct in her allegations.

    Sinckler subsequently APOLOGIZED, which caused Ellis to say he admired him for being man enough to come to the public and admit he was wrong.

    Look, the man admitted in a public forum that he was wrong and Mottley was correct, and you have now decided to jump into the fray trying to convince BU otherwise.

  35. flyonthewall Avatar
    flyonthewall

    The only thing holding Sinkler together right now is the knowledge that he will leave politics as a very rich man.

  36. Artax Avatar
    Artax

    millertheanunnaki March 21, 2016 at 6:25 PM #

    “Everybody knows where that $200 million leakage lies. Right in the transfers to the myriad statutory corporation and other superfluously unproductive bodies including some right in the central government army of occupation like NISE and the Productivity Council.”

    @ Miller

    You seem to forget that those statutory corporations are used by politicians from both BLP and DLP to give constituents jobs in exchange for their votes.

    It is a known fact that the Transport Board has recently recruited a number of bus drivers, none of whom were among those retrenched in 2014, which clearly contravened the agreement made between the union and TB.

    You have the Urban and Rural Development Commissions both undertaking similar activities. But both Commissions will be valuable assets leading up the 2018 elections, since resources will be allocated to repairing and constructing houses to solicit votes. Case in point, recently, Steve Blackett was seen parading in the media handing keys to individuals in his constituency.

    Then there is the National Assistance Board, which is OVERSTAFFED. Could you imagine that a board with a reduced service load has SIX clerks in the Accounts Section? Then there is a matter of an excess of 80 Home Helpers on the payroll.

    All you have to do is to read the Auditor General’s reports for the past five financial years to avail yourself of the wastage and hiring practices of these statutory agencies.

  37. David Avatar
    David

    Arthur’s point he made last week about the debt is relevant. This government must consider very carefully the ROI of all significant capital projects signed off. Contracting debt or engaging in projects likely to fail and have to be bailed by government will have implications for our children’s children.

  38. millertheanunnaki Avatar
    millertheanunnaki

    @ Artax March 21, 2016 at 6:35 PM
    “Look, the man admitted in a public forum that he was wrong and Mottley was correct, and you have now decided to jump into the fray trying to convince BU otherwise.”

    That consortium of “acs” has sold its soul to the devil called the dangerous lying party (dlp).
    We are just waiting with bated breath to see how that hen of a supreme yard-fowl metamorphoses into a shameful weathercock in servile volte-face support of Stinkliar’s planned privatization programme in his Quixotic quest to reduce the self-made fiscal deficit.

    Only a programme of political euthanasia can save Barbados from fiscal meltdown.

  39. Alvin Cummins Avatar
    Alvin Cummins

    @ARTAX,
    WHAT IS THE ROLE of Home Helpers?
    @Well Well,

    CHICKEN!!! I KNEW THAT WOULD BE YOUR ANSWER.WANT TO EAT THE FOOD AND SAY HOW BAD IT TASTE, BUT DON’T (CAN’T) TRY YOUR HAND AT COOKING.

  40. Prodigal Son Avatar
    Prodigal Son

    miller,

    Someone said in the VOBchat today that the reason why the government cannot cut the public sector to achieve the savings that it wants is that they have already sent home all the Bees.

    So any further staff cuts would have to be Dees…….any you done know that they are not going to touch their supporters!

  41. Tron Avatar
    Tron

    The solution to all these problems might by politically difficult. However, a plan like the following would bring the deficit down. Believe me.

    1.
    – shrink the number of ministries to 10
    – close 50 % of all embassies and missions around the globe
    – release 20 % of public servants to the free market
    – stop hiring public servants for at least 5 years
    – lower pensions in public service by 10 %
    – lower basic salaries in public service by 20 %, the remaining 20 % are paid by performance
    – extend the working hours of public servants
    – join Court of Appeal and High Court to one judicial body and reduce the number of judges by 30 %
    – close less important faculties at UWI, except medicine, law and economics

    privatize most of statutory bodies

    – shut down the most disastrous bodies like NHC

    Teach leadership, integrity and transparency in schools, at UWI and public service.
    Enact bills on integrity and transparency and ENFORCE them.
    Attract the right type of foreign investors

    – do research on personal and monetary background, including criminal records
    – the business model must be self-sustaining, that is NO tax exemptions after opening of hotels etc.
    – do active search for investors in North America, Europe and Asia
    – pamper reliable and trustworthy foreign investors

    Make Barbados great again!

  42. Prodigal Son Avatar
    Prodigal Son

    and

  43. David Avatar
    David

    …collapse the Senate and Lower House, disperse the BDF.

  44. chad99999 Avatar
    chad99999

    It is important for individuals on this thread to be careful about what they say on this subject of debt.
    First of all, the video clip should be taken with a few grains of salt: A country is not a household, and it should not be managed as such. In a country, one man’s spending creates income for another man, so there are many more situations when spending is good for the country than would be the case for a household. When a household spends, the money spent is usually “lost” to others.
    Second of all, we should understand the composition of debt. Not all debt is the same. If a government borrows from its own people (domestic debt), it has more financial flexibility than if it borrows from foreign banks or other foreign private sector lenders. Domestic debt is money a country owes to itself, and the obligations of the government are assets on the bank statements of banks and private investors.
    My understanding is that the majority of Barbados’ debt is domestic debt, so we are not as crippled as the headline numbers might suggest.
    Any economists want to weigh in on these comments?

  45. pieceuhderockyeahright Avatar
    pieceuhderockyeahright

    Chadddddd 9999999999

    Whey you been my man?

    Welcome back

  46. David Avatar
    David

    @chad9999

    Are you attempting to be unnecessarily provocative? Did you not get the point the man made using a simple explantation? We have to learn to spend what we earn read carry a balanced budget.

  47. millertheanunnaki Avatar
    millertheanunnaki

    @ chad99999 March 21, 2016 at 7:48 PM
    “When a household spends, the money spent is usually “lost” to others.”

    You should rephrase that statement.
    The ‘spending’ by households is income to others including the government in the form of indirect taxation e.g. VAT.
    The same way blood circulates through the human body to sustain life so too does money or its equivalent in order to maintain economic activity.
    It’s the quality of that analogical blood that makes the difference to the quality of life or health of the person, whether biological or economic.

    “My understanding is that the majority of Barbados’ debt is domestic debt, so we are not as crippled as the headline numbers might suggest.”

    That might be all fine and good when the debt is held mostly by local lenders (bond holders). But it can only be sustained in the long run when you control the value of your own currency and can print money at will as with the case of the USA.

    If Barbados was earning forex at a much faster pace than spending it your argument would be a solid as your bottom dollar bill.
    It is precisely because the local debt is so large that a haircut is required. In the absence of a growing economy providing a wider transactional tax base to meet the serving of the local debt the only way to reduce that debt is to make an adjustment to the currency peg with a concomitant ‘adjustment’ in the real value of the local paper debt.

    The mounting pressures on the country’s sliding foreign reserves would offer the perfect opportunity to exercise that much needed haircut.

  48. chad99999 Avatar
    chad99999

    @David

    You are wrong. We do not need a balanced budget if borrowing is cheap (i.e., interest rates are low) and we have profitable projects to invest in. I borrowed money from my Mom to go to graduate school. That loan led to a better life. The problems arise from wasted funds and unprofitable projects. But if Barbados borrows to improve its human capital or certain parts of its infrastructure, that is good.

  49. millertheanunnaki Avatar
    millertheanunnaki

    @ millertheanunnaki March 21, 2016 at 8:20 PM

    “transactional tax base to meet the serving of the local debt ”

    That should be the ‘servicing’ of the local debt.

  50. David Avatar
    David

    @chad9999

    And you have not factored we a re a nation of imports supported by conspicuous consumption? How will deficit financing and high domestic borrowing pressure the peg?

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